Innovator's DNA

by Jeff Dyer

  To account for these surprises, Michael Tushman and Philip Anderson (1986) offered a unique, new categorization: competency-enhancing versus competency-destroying technological changes.b This resolved many anomalies, yet subsequent researchers continued to uncover new ones that the Tushman-Anderson scheme could not explain. Rebecca Henderson and Kim Clark’s (1990) categories of modular versus architectural innovations, Clayton Christensen’s (1997) categories of sustaining versus disruptive technologies, and Clark Gilbert’s (2005) threat-versus-opportunity framing each surfaced and resolved anomalies that prior scholars’ work could not account for. Understanding and explaining the anomalies yielded original insights for the researchers.c

  Kuhn’s bottom line: scientific researchers who seek to reveal and resolve anomalies tend to advance their fields more productively than those seeking to avoid them. Thus, observing anomalies in scientific endeavors is as valuable as observing surprises in commercial endeavors is. Identifying surprises or anomalies—what isn’t what you expected—may be the key to unlock the door to your innovation.

  a. Thomas S. Kuhn, The Structure of Scientific Revolutions (Chicago: University of Chicago Press, 1962).

  b. Michael L. Tushman and Philip Anderson, “Technological Discontinuities and Organizational Environments,” Administrative Science Quarterly 31, no. 3 (1986): 439.

  c. Rebecca M. Henderson and Kim B. Clark, “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms,” Administrative Science Quarterly 35, no. 1 (1990): 9; Clayton M. Christensen, The Innovator’s Dilemma (Boston: Harvard Business School Press, 1997); Clark G. Gilbert, “Unbundling the Structure of Inertia: Resource versus Routine Rigidity,” Academy of Management Journal 48, no. 5 (2005): 741.

  One evening, he met Julia Trentini, a young woman in her twenties who spoke better English than anyone he had met. He asked her how she had learned English so well. To his surprise, he learned that she had not attended any English school. Instead, she learned by watching American television shows and movies, and then practiced by imitating the phrases and pronunciation of the actors. She watched shows like Friends just for fun and was later surprised to find that she could understand and talk to a group of Americans that she met on the streets of São Paulo. She hadn’t formally studied English at all. Her newfound ability was a happy accident motivated by entertainment. Wride later observed that, like Trentini, other Brazilians with the best English skills also spent significant time watching and imitating American movies. (He learned that most Brazilians prefer to watch American movies in English even when Portuguese audio tracks are available. They prefer the authenticity of the actors’ real voices.) This led to another question: why don’t more Brazilians learn English by watching movies? The answer was that the actors spoke too fast, or used idioms or words that the Brazilians didn’t know or understand.

  So Wride, a software engineer by training, devised an ingenious program that would allow a Portuguese speaker to watch virtually any movie in English on her computer and then do four things: (1) slow down the speech of the speaker, (2) select words and hear them pronounced or defined, (3) identify idioms and their meaning in her native language, and (4) insert her own pronunciation into the mouth of the actor so she can hear whether she sounds the same as the actor (hence the website name, MovieMouth). Wride’s insight for his business emerged by observing that Brazilians who were supposed to be the best English speakers (those attending the best English training programs) were not the best speakers.

  How else can you look for surprises? Leon Segal (an innovation psychologist and former IDEO employee) rightly noted that “innovation begins with an eye,” but it certainly doesn’t have to end there. It’s critical to remember that observations frequently involve more than the eyes. Learning research repeatedly underscores the power of multisensory experience when it comes to seeing something new and making sense of the experience. The more senses we engage as we experience the world, the more we see and remember. As a result, looking for surprises can actually involve listening, tasting, touching, and smelling something surprising as well. You may have never heard of Trimpin, but he’s an accomplished musical innovator who has spent a lifetime asking the question, “How can we depart from the traditional orchestra?” He keeps his ears wide open in a constant hunt for new sounds. He says that “as soon as I see something, I hear it.”8 Trimpin sees the sounds of trolley-cable sparks, earthquake-driven timpani, and other surprising auditory phenomena to create award-winning innovations in the music world. Other innovators also engage a wide range of senses to uncover new business ideas. For example, Howard Schultz started down the path to founding Starbucks when first confronted with the intoxicating smell of Italian espresso bars, and Joe Morton, cofounder of XanGo, got the initial idea for a new health drink in part by tasting mangosteen fruit for the first time in Malaysia (more about this in chapter 5). In sum, remember to engage all your senses as you search the world for surprises.

  Change the Environment

  Think back to the first time you made a trip to a new country. Or reflect on the first few days that you started working for a new company. Do you remember noticing what was different from what you had seen or experienced before? When entering a new environment, we are far more likely to carefully observe what is going on around us because we automatically seek to understand what is new and different. People who put themselves in new environments and then intensely observe what is happening unearth new ideas.

  For example, Starbucks founder Schultz engaged his sensory organs—his eyes, ears, nose, and mouth—when he hit on the idea for his coffee stores. Walking to a trade show in Milan, Italy, Schultz randomly observed what happened in a number of Italian espresso bars. He could tell that the customers were regulars and that the espresso bar “offered comfort, community, and a sense of extended family.” As Schultz continued visiting Italian espresso bars, he had a revelation. “This is so powerful! I thought. What we had to do was unlock the romance and mystery of coffee, firsthand, in coffee bars. It was like an epiphany. It seemed so obvious,” recalled Schultz. “If we could recreate in America the authentic Italian coffee bar culture, it might resonate with other Americans the way it did with me.”9

  Schultz stayed in Milan for about a week, visiting espresso bars just to observe. He then visited Verona where, losing himself in the streets of the city, he tasted caffe latte for the first time (he observed a customer order a caffe latte and, having never before heard of the drink, imitated the customer to see what it was). “Of all the coffee experts I had met, none had ever mentioned this drink. No one in America knows about this, I thought. I’ve got to take it back with me,” he recalls.

  How many executives are willing, on a whim, to just take a week getting lost every day in an exploratory journey to observe something of interest and to see where the journey takes them? Without a willingness to actively observe in a new environment, Schultz would never have come up with the ideas that led to Starbucks’s innovative coffee-retailing experience.

  Not surprisingly, our research found that innovators were more likely to visit new environments, including traveling to new countries, visiting different companies, attending unusual conferences, or just visiting museums or other interesting places. A. G. Lafley, for example, told us what he learned from his regional assignment in Asia long before becoming CEO of P&G:

  Every time I traveled to China, I always went to stores to watch people purchasing our products. Then I went into homes. I always went in the evening because the woman almost always works outside the home. My routine was stores, homes, then the office. It gave me a current snapshot of what was going on. Of course, you can’t generalize from a single qualitative experience, but over five years of doing this regularly, those experiences add up, combined with reading whatever you have access to, as well as the “harder” data. You develop a feel. You become more of an anthropologist because you can’t understand the language. Your power is ob
servation, your listening skills; your ability to read nonverbal cues gets a lot better. Your ability to observe increases. There are so many subtle things to read, understand, react to in a foreign country.

  After returning to the US P&G headquarters, he noticed how easy it was to “get lazy because everyone speaks English—you know what they’re going to say and do next.”

  Innovators don’t have to go to foreign countries for an immersion experience in a new environment. There is much to be learned by exploring exhibits, museums, zoos, aquariums, and nature. At Daimler, Dieter Gürtler, one of the company’s top engineers, directed a team that focused on building a new aerodynamic concept car. To generate new ideas, he took the team members to a local museum of natural history to watch fish for a day. They were in search of insights that could break the automobile industry’s assumptions about aerodynamics and found a surprising solution in the boxfish. Through direct observation of the fish, as well as conversation with fish experts, his team worked on mimicking the proportions and skeletal structure of the boxfish. Ultimately, they produced a concept car that delivered unexpected reductions in weight as well as significant reductions in air drag. As Gürtler put it, “By looking at nature, you come up with ideas you could never have thought of on your own.”10

  Of course, it isn’t always possible to put yourself in a new environment. Fortunately, a rich source for new ideas often resides right around us in the familiar world of people and places that we think we know well. The problem is that we sometimes miss the obvious new idea in the most obvious of places because we take things for granted and, as a result, we miss opportunities for innovation. As book and New York Times writer Peter Leschak has lamented, “All of us are watchers—of television, of time clocks, of traffic on the freeway—but few are observers. Everyone is looking, not many are seeing.”11 Acting on autopilot in everyday life automatically starves the brain’s creative capacity.

  Observation has the power to transform companies and industries. As Cook told us, “Basic observation is the big game changer in our company.” Effective observation requires putting yourself in new environments. It involves watching customers to see what products and services they hire to help them do their jobs. It involves looking for workarounds—partial or incomplete solutions—that customers use to do those jobs. And it involves looking for surprises or anomalies that might provide surprising insights. As observers identify workarounds and anomalies, and dig deep to understand them, they increase their odds of uncovering an innovative solution to the problems they observe. We encourage you to develop and hone your observation skills and, in so doing, discover how they can be a game changer for you and your company.

  Tips for Developing Observation Skills

  Tip #1: Observe customers

  Hone your observing skills by scheduling regular observation excursions to carefully watch how certain customers experience your product or service. (This could be done in fifteen-to-thirty-minute increments.) Observe real people in real-life situations. Try to grasp what they like and hate. Search for things that make life easier or more difficult for them. What job are they trying to get done? Which of their functional, social, or emotional needs is your product or service not meeting? What is surprising about their behavior (i.e., different than expected)? Ask the ten questions we suggested earlier in the chapter. In short, become an anthropologist and intensely observe a customer or a potential customer to experience an entire product or service life cycle.

  Tip #2: Observe companies

  Pick a company to observe and follow. Maybe it is a company you admire, such as Apple, Google, or Virgin. It could be a startup with an innovative business model or disruptive technology. Or it could be a particularly tough, innovative competitor. Treat the company as you would a business-school case. Find out everything you can about what the company does and how it does it. If possible, figure out a way to schedule a visit to the company to examine firsthand its strategy, operations, and products and to look for cross-pollination opportunities. As you learn new things about it, ask: “Are there any ideas that could be transferred, with some adaptation, to our company or industry? How is this strategy, tactic, or activity relevant to my job, my company, my life? Are there ideas here for a new who, what, or how in my industry?”

  Tip #3: Observe whatever strikes your fancy

  Set aside ten minutes each day to simply observe something intensively. Take careful notes about your observations. Then try to figure out how what you are seeing might lead to a new strategy, product, service, or production process. When you are out and about watching the world, jot down your key observations and thoughts on a notepad, and review your notes later, after a little time has passed. Take pictures (or videos) of interesting things with your smartphone. Remind yourself to observe and note what is going on around you. (Amazon’s Bezos confided that he often takes pictures of “really bad innovations” to get ideas for things that might be done better.)

  Tip #4: Observe with all your senses

  As you observe customers, companies, or whatever, actively engage more than one sense (see, smell, hear, touch, taste). One structured way to do this is through Dialogue in the Dark (a practice developed by Andreas Heinecke) and Dialogue in Silence (a practice developed by Heinecke and his wife, Orna Cohen). In these tours by visually or hearing-impaired guides, guests experience darkened or silent environments (ranging from permanent exhibitions to restaurants located throughout the world) and enter a completely different world of either darkness or silence. A less structured approach to engaging your senses is to simply and intentionally become aware of your wider range of senses. For example, pay attention to what you smell next time you’re visiting with customers (as Schultz did in Italy) or eat your next dinner in slow motion, slowly savoring every bite and focusing only on the taste, texture, and smell of the food. Or notice how a product really feels as you touch it (when either using it or trying to understand how it works). As you learn how to observe, pay close attention to any creative insights the experience might trigger. Be sure to capture observations (sights, smells, sounds, touches, and tastes) in your idea journal and explore where the insights might lead you.

  5

  Discovery Skill #4

  Networking

  “What a person thinks on his own, without being stimulated by the thoughts and experiences of other people, is even in the best case rather paltry and monotonous.”

  —Albert Einstein

  THINKING OUTSIDE THE BOX often requires linking the ideas in your area of knowledge with those of others who play in different boxes, who are outside your sphere. Innovators gain a radically different perspective when they devote time and energy to finding and testing ideas through a network of diverse individuals. Unlike typical delivery-driven executives who network to access resources, sell themselves or their companies, or boost their careers, innovators go out of their way to meet people with different backgrounds and perspectives to extend their own knowledge. And they are constantly bouncing their ideas off of others to get feedback.

  Consider how the idea to launch Uber emerged in 2008 as the result of ongoing conversations between Garrett Camp and Travis Kalanick at the LeWeb conference in Paris. At the time, Camp was looking for his next startup opportunity after selling his first startup, StumbleUpon, for $75 million to eBay. One of the first things that Camp did after selling StumbleUpon was treat himself to a red Mercedes-Benz C-Class sports car. But he soon learned that having a beautiful, fast sports car in San Francisco was more frustration than joy. Traffic was horrific, and parking wasn’t much better. So Camp decided to hail taxis instead. But San Francisco had limited its taxi licenses to only 1,500, so getting a cab in the city was a nightmare.

  During this time, Camp began dating Melody McCloskey, who lived a few miles away from Camp in Pacific Heights. To avoid the hassle of driving, Camp typically traveled by taxi to their frequent evening meetings at restaurants or bars. After a number of frustrating taxi experiences (in which
they failed to show), Camp decided to experiment with San Francisco’s underground black-car service nicknamed the “gypsy cab fleet”—unmarked black sedans that would approach prospective passengers on the street and flash their headlights to solicit a fare. After utilizing the services of a number of black cars, Camp started texting his favorite drivers well in advance, asking them to pick him up at a certain location. This system, although more effective than hailing a cab, was expensive. Camp reportedly spent as much as $1,000 in one night of picking up and dropping off friends across the city. Getting around San Francisco was both difficult and expensive—Camp thought there had to be a better way. So he began brainstorming different ways to do an on-demand black-car service. He brainstormed with friends and advisors to StumbleUpon, like author and eventual Uber investor Tim Ferriss. “I bounced the idea off of everyone,” Camp says. “All these ideas kept building and building.”1