by Jeff Dyer
This is one reason that individuals who grow up in societies that promote community over individualism and hierarchy over merit—such as Japan, China, Korea, and many Arab nations—are less likely to creatively challenge the status quo and turn out innovations (or win Nobel prizes). To be sure, many innovators in our study seemed genetically gifted. But, more important, they often described how they acquired innovation skills from role models who made it “safe” as well as exciting to discover new ways of doing things.
If innovators can be made and not just born, how then do they come up with great new ideas? Our research on roughly five hundred innovators compared with roughly five thousand executives led us to identify five discovery skills that distinguish innovators from typical executives (for detail on the research methods, see appendix B). First and foremost, innovators count on a cognitive skill that we call “associational thinking” or simply “associating.” Associating happens as the brain tries to synthesize and make sense of novel inputs. It helps innovators discover new directions by making connections across seemingly unrelated questions, problems, or ideas. Innovative breakthroughs often happen at the intersection of diverse disciplines and fields. Author Frans Johansson described this phenomenon as “the Medici effect,” referring to the creative explosion in Florence when the Medici family brought together creators from a wide range of disciplines—sculptors, scientist, poets, philosophers, painters, and architects.9 As these individuals connected, they created new ideas at the intersection of their respective fields, thereby spawning the Renaissance, one of the most innovative eras in history. Put simply, innovative thinkers connect fields, problems, or ideas that others find unrelated.
The other four discovery skills trigger associational thinking by helping innovators increase their stock of building-block ideas from which innovative ideas spring. Specifically, innovators engage the following behavioral skills more frequently:
Questioning. Innovators are consummate questioners who show a passion for inquiry. Their queries frequently challenge the status quo, just as Jobs did when he asked, “Why does a computer need a fan?” They love to ask, “If we tried this, what would happen?” Innovators, like Jobs, ask questions to understand how things really are today, why they are that way, and how they might be changed or disrupted. Collectively, their questions provoke new insights, connections, possibilities, and directions. We found that innovators consistently demonstrate a high Q/A ratio, where questions (Q) not only outnumber answers (A) in a typical conversation, but are valued at least as highly as good answers.
Observing. Innovators are also intense observers. They carefully watch the world around them—including customers, products, services, technologies, and companies—and the observations help them gain insights into and ideas for new ways of doing things. Jobs’s observation trip to Xerox PARC provided the germ of insight that was the catalyst for both the Macintosh’s innovative operating system and mouse, and Apple’s current OSX operating system.
Networking. Innovators spend a lot of time and energy finding and testing ideas through a diverse network of individuals who vary wildly in their backgrounds and perspectives. Rather than simply doing social networking or networking for resources, they actively search for new ideas by talking to people who may offer a radically different view of things. For example, Jobs talked with an Apple Fellow named Alan Kay, who told him to “go visit these crazy guys up in San Rafael, California.” The crazy guys were Ed Catmull and Alvy Ray Smith, who headed up a small computer-graphics operation called Industrial Light & Magic (the group created special effects for George Lucas’s movies). Fascinated by their operation, Jobs bought Industrial Light & Magic for $10 million, renamed it Pixar, and eventually took it public for $1 billion. Had he never chatted with Kay, he would never have wound up purchasing Pixar, and the world might never have thrilled to wonderful animated films like Toy Story, Up, and The Incredibles.
Experimenting. Finally, innovators are constantly trying out new experiences and piloting new ideas. Experimenters unceasingly explore the world intellectually and experientially, holding convictions at bay and testing hypotheses along the way. They visit new places, try new things, seek new information, and experiment to learn new things. Jobs, for example, tried new experiences all his life—from meditation and living in an ashram in India to dropping in on a calligraphy class at Reed College. All these varied experiences would later trigger ideas for innovations at Apple.
Collectively, these discovery skills—the cognitive skill of associating and the behavioral skills of questioning, observing, networking, and experimenting—constitute what we call the innovator’s DNA, or the code for generating innovative business ideas.
The Courage to Innovate
Why do innovators question, observe, network, and experiment more than typical executives? As we examined what motivates them, we discovered two common themes. First, they actively desire to change the status quo. Second, they regularly take smart risks to make that change happen. Consider the consistency of language that innovators use to describe their motives. Jeff Bezos has said he wants to “have fun” and “make history.” Google cofounder Larry Page has said he’s out to “change the world.” Elon Musk has said: “There have to be reasons that you get up in the morning and you want to live. What inspires you? What do you love about the future?”10 These innovators think big and steer entirely clear of a common cognitive trap called the status quo bias—the tendency to prefer an existing state of affairs to alternative ones. Most of us simply accept the status quo. We may even like routine and prefer not to rock the boat. We adhere to the saying that “if it ain’t broke, don’t fix it,” while not really questioning whether “it” is “broke.” In contrast, innovators see many things as “broke.” And they want to fix them.
How do innovators break the status quo? One way is to refuse to be dictated by other people’s schedules. Just glance at an innovative executive’s typical calendar and you will find a radically different schedule compared with those of less inventive executives. We found that innovative entrepreneurs (who are also CEOs) spend 50 percent more time on discovery activities (questioning, observing, experimenting, and networking) than CEOs with no innovation track record. That translated into spending almost one more day each week on discovery activities. When we asked Jeff Bezos what percent of his time he spends “forward thinking”—looking for ways that Amazon can innovate to change the world—he replied, “Pretty much all of it.” Somewhat skeptical, we followed up. Did he really spend pretty much all of his time? Bezos thought for a moment and said, “Yeah. I mean . . . yeah.” (For more on how to be a forward thinker, see chapter 2 of Innovation Capital: How to Compete—and Win—Like the World’s Most Innovative Leaders, by Jeff Dyer, Nathan Furr, and Curtis Lefrandt.) Innovative leaders understand that fulfilling their dreams to change the world means they’ve got to spend a significant amount of time trying to discover how to change the world. And having the courage to innovate means that they are actively looking for opportunities to change the world.
Embracing a mission for change makes it much easier to take smart risks, make mistakes, and most of all, learn quickly from them. Most innovative entrepreneurs we studied felt that mistakes are nothing to be ashamed of. In fact, they are an expected cost of doing business. “If the people running Amazon don’t make some significant mistakes,” Jeff Bezos told us, “then we won’t be doing a good job for our shareholders because we won’t be swinging for the fences.” In short, innovators rely on their “courage to innovate”—an active bias against the status quo and an unflinching willingness to take smart risks—to transform ideas into powerful impact.
In summary, the DNA of innovators—or the code for generating innovative ideas—is expressed in the model shown in figure 1-1. The key skill for generating innovative ideas is the cognitive skill of associational thinking. The reason that some people generate more associations than others is partly because their brains are just wired that way. But a more
critical reason is that they more frequently engage in the behavioral skills of questioning, observing, networking, and experimenting. These are the catalysts for associational thinking. Of course, the next question is, why do some people engage these four skills more than others? The answer is that they have the courage to innovate. They are willing to embrace a mission for change and take risks to make change happen. The bottom line is that to improve your ability to generate innovative ideas, you need to practice associational thinking and more frequently engage in questioning, observing, networking, and experimenting. That will likely only happen if you can somehow cultivate the courage to innovate.
FIGURE 1-1
The innovator’s DNA model for generating innovative ideas
As innovators actively engage in their discovery skills over a lifetime, they build discovery habits, and they become defined by them. They grow increasingly confident in their ability to discover what’s next, and they believe deeply that generating creative insights is their job. It is not something to delegate to someone else. As A. G. Lafley, two-time CEO at Procter & Gamble, declared, “innovation is the central job of every leader—business unit managers, functional leaders, and the CEO.”11
The Innovator’s DNA
We’ve just told you that the ability to be innovative is not based primarily on genetics. At the same time, we’re using the DNA metaphor to describe the inner workings of innovators, which suggests that it is. Bear with us for a moment. (And welcome to the world of innovation, where the ability to synthesize two seemingly opposing ideas is the type of associating that produces novel insights.) Recent developments in the field of gene therapy show that it is possible to modify and strengthen your physical DNA, for example, to help ward off diseases.12 Likewise, it is metaphorically possible to strengthen your personal innovator’s DNA. Let us provide an illustration.
Imagine that you have an identical twin, endowed with the same brains and natural talents that you have. You’re both given one week to come up with a creative new business idea. During that week, you yourself come up with ideas alone, just thinking in your room. By contrast, your twin (1) talks with ten people—including an engineer, a musician, a stay-at-home dad, and a designer—about the venture; (2) visits three innovative startups to observe what they do; (3) samples five “new to the market” products and takes them apart; (4) shows a prototype he’s built to five people, and (5) asks “What if I tried this?” and “What would make this not work?” at least ten times each day during these networking, observing, and experimenting activities. Who do you bet will come up with the more innovative (and usable) idea? My guess is that you’d bet on your twin, and not because he has better natural (genetic) creative abilities. Of course, the anchor weight of genetics is still there, but it is not the dominant predictor. People can learn to more capably come up with innovative solutions to problems by acting in the way that your twin did.
Discovery-Skill Strengths Differ for Disruptive Innovators
To understand that innovative entrepreneurs develop and use different skills, look at figure 1-2. It shows the percentile rank scores on each of the five discovery skills for four well-known founders and innovators: Pierre Omidyar (eBay), Michael Dell (Dell), Michael Lazaridis (Research In Motion), and Scott Cook (Intuit). The “noninnovators” percentile rank indicates the average of over five thousand executives in our database who scored lower on that particular skill. A particular skill is measured by the frequency and intensity with which these individuals engage in activities that compose the skill.
FIGURE 1-2
High-profile innovators’ discovery-skills profile
As you can see, the pattern for each innovative entrepreneur is different. For example, Omidyar is much more likely to acquire his ideas through questioning (ninety-fifth percentile) and observing (eighty-seventh percentile), Dell through experimenting (ninetieth percentile) and networking (ninety-eighth percentile), Cook through questioning (eighty-third percentile) and observing (eighty-eighth percentile), and Lazaridis through questioning (ninety-sixth percentile) and networking (ninety-eighth percentile). The point is that each of these innovative entrepreneurs did not score high on all five of the discovery skills. They each combined the discovery skills uniquely to forge new insights. Just as each person’s physical DNA is unique, an innovator’s DNA comprises a unique combination of skills and behaviors.
As figure 1-2 shows, innovative entrepreneurs rarely display across-the-board strength in observing, experimenting, and networking, and actually don’t need to. All of the high-profile innovative entrepreneurs in our study scored above the seventieth percentile in associating and questioning. The innovators seemed to hold these two discovery skills more universally. But the innovators we studied didn’t need world-class strength in the other behaviors. It certainly helped if they excelled at one of the five skills and were strong in at least two. If you hope to be a better innovator, you will need to figure out which of these skills are more natural and comfortable for you—more baked into your DNA. These are the skills you want to improve, because they can be distinguishing skills to help you generate innovative ideas.
Delivery Skills: Why Most Senior Executives Don’t Think Differently
We’ve spent the past eight years interviewing scores of senior executives—mostly at large companies—asking them to describe the most novel and valuable strategic insights that they had generated during their careers. Somewhat surprisingly, we found that top executives rarely mentioned an innovative business idea that they had personally generated. They were extremely intelligent and talented individuals who were accomplished at delivering results, but they didn’t have much direct, personal experience with generating innovative business ideas.
In contrast to innovators who seek to fundamentally change existing business models, products, or processes, most senior executives work hard to efficiently deliver the next thing that should be done given the existing business model. That is, they work inside the box. They shine at converting a vision or goal into the specific tasks to achieve the defined goal. They organize work and conscientiously execute logical, detailed, data-driven plans of action. In short, most executives excel at execution, including the following four delivery skills: analyzing, planning, detail-oriented implementing, and disciplined executing. (We’ll say more about these skills later in the chapter and in chapter 8, but for now we need only note that they are critical for delivering results and translating an innovative idea into reality.)
Many innovators realize that they are deficient in these critical skills and, consequently, try to team up with others who possess them. For example, eBay founder Pierre Omidyar quickly recognized the need for execution skills, so he invited Jeff Skoll, a Stanford MBA, and Meg Whitman, a Harvard MBA, to join him. “Jeff Skoll and I had very complementary skills,” Omidyar told us. “I’d say I did more of the creative work developing the product and solving problems around the product, while Jeff was involved in the more analytical and practical side of things. He was the one who would listen to an idea of mine and then say, ‘OK, let’s figure out how to get this done.’” Skoll and Whitman professionalized the eBay website, added fixed-price auctions, drove international expansion, developed new categories such as autos, and integrated important capabilities such as PayPal.
I’m Not Jeff Bezos . . . Is This Relevant?
OK, so you’re not Jeff Bezos. Or Elon Musk. Or any other famous business innovator. But that doesn’t mean you can’t learn from these innovators. You can get better at innovating, even if most of your innovations are somewhat incremental in nature. We’ve seen it happen, and we’ve seen that it can make a difference. We’ve seen a pharmaceutical executive practice a questioning technique (see chapter 3) each day to identify key strategic issues facing his division. After three months, his boss told him that he’d become the most effective strategic thinker on his team. Within six months, he was promoted to a corporate strategic planning job. “I just improved my ability to ask quest
ions,” he told us. We’ve seen MBA students in our classes use the observing, networking, and experimenting techniques to generate entrepreneurial business ideas. One got the idea for launching a company that uses bacteria to eat pollution from networking with someone he met at a neighborhood barbecue. Another observed that the best English speakers in Brazil were people who watched American movies and television. So he launched a company that sells software that helps people learn English by watching movies. Many innovative ideas may seem small, such as a new process for effectively screening job recruits or a better way to build customer loyalty, but they are valuable new ideas nonetheless. And if you come up with enough of them, they will definitely help you advance in your career. The point is this: you don’t have to be Jeff Bezos to generate innovative ideas for your business.
Why do most senior executives excel in the delivery skills, but are only above average in discovery skills? It is vital to understand that the skills critical to an organization’s success vary systematically throughout the business life cycle. (See figure 1-3). For example, in the startup phase of an innovative venture, the founders are obviously more discovery-driven and entrepreneurial. Discovery skills are crucial early in the business life cycle because the company’s key task is to generate new business ideas worth pursuing. Thus, discovery (exploration) skills are highly valued at this stage and delivery (execution) skills are secondary. However, once innovative entrepreneurs come up with a promising new business idea and then shape that idea into a bona fide business opportunity, the company begins to grow and then must pay attention to building the processes necessary to scale the idea.