Innovator's DNA

by Jeff Dyer

  Innovators are likely to frequent idea conferences such as TED, Davos (or other World Economic Forum events), and the Aspen Ideas Festival. Many innovators we interviewed are regular faces at these events (for example, Jeff Bezos regularly attends TED). Such conferences draw together entrepreneurs, academics, politicians, adventurers, scientists, artists, and thinkers from all over the world, who come to present their newest ideas, passions, and projects. Attending a conference that is designed for the exchanging and debating of ideas from a variety of fields is likely to create a collision of concepts that can turbocharge your associating skill.

  A conference on a topic outside your direct industry and field of expertise can also spark new ideas. One European transportation-industry executive we interviewed happened to live next to a conference center in a large city. Even though he walked by the center each day on his way to work, he never ventured in. One day, he noticed a sign for a conference in a completely different industry: beekeeping. For some reason, this theme caught his attention and he wandered in. Much to his surprise, the experience proved invaluable as he applied an idea from beekeeping to come up with an innovative solution to one of his current work challenges. After that, he frequently dropped in on other conferences out of his field just to learn something entirely new.

  David Neeleman, founder of both JetBlue and Azul airlines, detected and developed key ideas for JetBlue, such as satellite-TV technology at every seat, at-home reservationists, and the hundred-seat JetBlue Embraer jet, through networking at conferences and elsewhere. Says Neeleman: “I always had this gnawing thought in my mind that ‘I’ve got to do something in the seat-back pocket of each plane seat.’ So I talked to a lot of people at a lot of companies about different entertainment options. Then one day, in the early days of JetBlue, I talked to someone who said, ‘Look at this brochure on a company that can do live television on airplanes,’ and I said, ‘That’s it. That’s exactly what we want to do.’”

  Not only did Neeleman follow up on the suggestion, he bought LiveTV, the company with the technology to provide satellite TV on airplanes. By purchasing the only company with such technology, he prevented competitors from offering satellite television to their passengers, thereby creating a competitive advantage for JetBlue. Until recently, any competitor who wanted to offer satellite TV to passengers had to purchase it from JetBlue.

  When Neeleman was attending a small-airline industry conference, someone alerted him to the capabilities of Embraer, an emerging, small-plane manufacturer in Brazil. Neeleman immediately scheduled a trip to Brazil to visit Embraer and explore opportunities for JetBlue. During the visit, Neeleman saw the possibility of serving midsize cities with a new hundred-seat Embraer jet, one designed specifically for JetBlue. By offering satellite TV and large comfortable seats, the hundred-seat JetBlue plane would be far more desirable to passengers than the fifty-seat regional jets, and more economical than the larger Boeing and Airbus jets. As part of the deal, JetBlue purchased the Brazilian aircraft maker’s hundred-seat plane-manufacturing capacity for two years. Later, the airline signed a contract with Embraer that prevented it from selling the jet at a price lower than JetBlue had paid.

  In addition to attending conferences, some innovators create networking opportunities within their companies. For example, Richard Branson created an idea-networking process when founding Virgin Music. He bought an old castle and transformed it into a conversation hub for diverse people from the entertainment industry, including musicians, artists, producers, filmmakers, and others. Branson understands that creating networking opportunities within Virgin produces conversations between people that just might trigger innovative ideas.

  Form a Personal Networking Group

  We found that many innovators build a small network of people who are their “go to” folks when they want to find or test new ideas. For example, innovative entrepreneurs Jeff Jones (founder of Campus Pipeline and NxLight) and Eliot Jacobsen (RocketFuel Ventures) described how they liked to get together to jam (to use a music or jazz metaphor) to get new ideas. “I have a few people I like to get together with when I’m in need of a boost to my creative juices,” Jones told us. “Eliot Jacobsen is one of my friends that I love to talk to because we just energize each other and build on each other’s ideas.” Jacobsen agreed, saying, “Jeff Jones is one of those people I like to talk to on a regular basis, because we just connect in a creative way.”

  In similar fashion, we found that many innovators have a small group of creative confidants that they converse with whenever they need some fresh ideas—or someone to challenge their current ideas. Usually this network is relatively small (e.g., fewer than five people), but some innovators have actively created larger networks. One innovative executive told us that over the years he has cultivated a kitchen cabinet of twenty to thirty people from different industries who are his innovation advisers. At least once a year, he picks up the phone and asks his kitchen cabinet, “What’s keeping you up at night?” He says, “Most of them either run companies or are involved in industries in a fairly senior way, and they have very specific things to talk about . . . From these diverse conversations I try to piece together trends or directions. There are moments when the pieces just come together and new ideas form with amazing clarity.”

  As important as networking is, many senior executives face unique challenges when trying to talk candidly with others about new ideas. After all, intellectual property is at stake, and senior executives often have difficulty challenging the status quo in their organizations because they often created it. “As a CEO, you find there are few places where you can really publicly talk about fundamental concerns,” one innovative CEO told us. “As a result, I’ve created an unofficial group. It’s fairly senior, fairly seasoned people who are comfortable throwing out ideas and then forgetting about them if these hunches or speculations aren’t right. One thing about being a CEO is that you’ve got to be very careful about what you say in public and whom you involve in these conversations. That’s why networking for ideas, for me at least, is unofficial.” For this reason, it’s important to form a trusted network of confidants, since the issues under discussion are of critical and sensitive strategic value. Building a trusted and diverse idea network is often best accomplished throughout your career, because forming relationships with a diverse set of people takes time and experience. However, if well cultivated, a small personal network of creative confidants can pay significant dividends.

  Effective idea networking helps innovators create new processes, products, services, and even business models that deliver positive results. When multiple conversations abound in these networks, a new idea frequently emerges from the insights and refinements gained. Michael Dell put it this way: “I often have a hard time explaining how we innovate at Dell because we do it quite collaboratively, building on each other. Someone will say, ‘Hey, what about this, how about that?’ And by the time you’re done, it’s impossible to say, ‘That’s so-and-so’s idea,’ because you’ve got twenty-seven fingerprints all over the thing.” In the end, idea ownership matters far less than development through the idea-networking process.

  Networking: How Well Do You Take Rejection?

  OK, so you’ve already heard about the importance of networking. But if you are like most people, you probably still don’t have any sort of a plan to do it on a regular basis. Meeting new people is easier said than done. So what stops you? To be brutally honest, it may be a lack of confidence that prevents you from reaching out to people you don’t know. You might get rejected. In fact, you will get rejected, sometimes when making the pitch for a meeting or conversation, and sometimes after making the pitch. So what can you do to minimize the probability of rejection when making the pitch? Tell the person you want to engage that “I’m interested in your ideas. I’m interested in your perspective.” This taps into his or her desire to help or be viewed as an expert. Most people derive satisfaction from being asked for their opinion and ideas. It’s
important to make sure they know you are only interested in their ideas, not their resources.

  Once you get the opportunity to exchange ideas with someone, and if you want to keep the door open to future conversations, you have one goal: be interesting. What makes someone interesting? Two things seem to help. First, breadth of experience matters in a big way. If you’ve traveled widely (China, Australia, Italy), experienced widely (Broadway shows, scuba diving), read widely (novels, history, different subjects), or networked widely (“Yes, I know so and so; we met when . . .”), then you increase your chances of being interesting to someone. Second, make sure you perfect your elevator speech on the topic you want ideas about. If you can tell interesting stories about the problem or challenge you are trying to solve, that will spark an interest. Being able to tell short, interesting stories on a variety of topics increases your interesting quotient. Of course, it doesn’t hurt to be funny or witty, but that really takes some practice.

  Networking is most likely to spark innovative ideas when you initiate conversations with folks in different social networks. This means talking to people from different business functions, companies, industries, countries, ethnic groups, socioeconomic groups, age groups (eighteen-year-olds and eighty-year-olds), political groups, and religions. Diversity of network breeds diversity of ideas. Attending idea conferences such as TED can be a way to jump-start the diversity of your network. Moreover, when facing a particular problem, ask yourself, “Who else has faced a problem like this before?” and try to talk to those folks.

  Tips for Developing Idea-Networking Skills

  We recommend the following activities to help you practice and strengthen your idea-networking skills.

  Tip #1: Expand the diversity of your network

  List the top-ten people you would typically talk with if you were trying to get or refine a new idea. Go ahead. Make the list right now. How many of those people have a background or perspective that is likely to be very different from yours? For example, how many are teenagers, or how many are older than seventy-five? How many were born and grew up in a different country? How many are from a very different socioeconomic group than yours? If your current idea network either isn’t very large or isn’t very diverse, expand your idea pool by identifying and visiting with people who are the most different from you along some or all of the dimensions shown in table 5-1.

  TABLE 5-1

  Diversify your idea network

  Identify and have a dialogue with people most different from you.

  Tip #2: Start a “mealtime networking” plan

  Plan to have a meal with someone from a different background at least once each week. Jacobsen, of RocketFuel Ventures, tries to schedule breakfast, lunch, or dinner with someone new every week. “I also frequently meet with people I know who are creative and who I’ve found are helpful in offering a different perspective,” he says. “Networking is important to my success in coming up with new business ideas, and mealtime is for networking.” For ideas on mealtime networking, see Keith Ferrazzi’s book Never Eat Alone.

  Tip #3: Plan to attend at least two conferences in the next year

  Select one conference that is on a topic related to your area of expertise and one conference on a topic that isn’t. Make an effort to meet new people and get to know what problems and issues they are facing; ask for their ideas and perspectives on problems and issues you are wrestling with. Remember what Galileo once said: “I have never met a man so ignorant that I couldn’t learn something from him.” See what you can learn from everyone you meet.

  Tip #4: Start a creative community

  Identify a few founding members who you believe are open to discussing new ideas and who you think will stimulate your creative thinking. Decide on a creative place to meet where you can exchange ideas and develop new ones. Meet regularly (at least monthly) to discuss trends and new ideas.

  Tip #5: Invite an outsider

  Bring in a smart person with a different background (someone from a different function, profession, company, industry, country, age, ethnic group, socioeconomic group) to have lunch with you and your team once each week. Ask the person about your innovation challenges and get his or her perspective on your ideas. Or hold an open house for ideas, inviting two to four people from a variety of perspectives, including nonexperts who are new to a situation, to present their ideas and viewpoints.

  Tip #6: Cross-train with experts

  Find experts in different functions, industries, or geographic regions, and sit in on their training sessions and meetings to experience their work and world. (For example, marketing managers from Google and P&G traded jobs for a month to gain rich insights into each other’s worlds as well as new ways to challenge fundamental assumptions in the other industry.)

  6

  Discovery Skill #5

  Experimenting

  “I haven’t failed . . . I’ve just found 10,000 ways that will not work.”

  —Thomas Edison

  WHEN MOST PEOPLE hear the word experiment, they think of scientists in white coats running experiments in a lab, or of great inventors such as Thomas Edison. Like Edison, business innovators actively try out new ideas by creating prototypes and launching pilot tests. But unlike scientists, they don’t work in laboratories; the world is their laboratory. And beyond just creating prototypes, they try out new experiences and take apart products and processes in search of new data that may spark an innovative new idea. Good experimenters understand that although questioning, observing, and networking provide data about the past (what was) and the present (what is), experimenting is best suited for generating data on what might work in the future. In other words, it’s the best way to answer our “what if” questions as we search for new solutions. Often, the only way to get the necessary data to move forward is to run the experiment. George Box, former president of the American Statistical Association, reinforced the power of experimentation in framing the future by noticing that, “the only way to know how a complex system will behave—after you modify it—is to modify it and see how it behaves.” This is precisely what experimentation does for disruptive innovators. It provides key data on how well their ideas work in practice and helps them shape revolutionary business models piece by piece.

  Experimenting with new business opportunities was, in fact, part of what Amazon founder, Jeff Bezos, did at D. E. Shaw, a Wall Street investment firm. In May 1994, Bezos was exploring the still-immature internet in his thirty-ninth-floor office in midtown Manhattan. As Bezos was browsing, he came across a website that claimed to measure growth in internet usage. Bezos couldn’t believe his eyes. According to this site, the internet was growing at a rate of 2,300 percent a year. “It was a wake-up call,” he says. “You have to keep in mind that human beings aren’t good at understanding exponential growth. It’s just not something we see in our everyday life.” What kind of business opportunity might this newfangled thing called the internet represent?

  Bezos began asking a series of questions: What would people buy remotely? What do they prefer to purchase by mail order rather than in a store? After researching the top-twenty mail-order products, Bezos decided that people would buy standard products via the web—ones that people knew exactly what they were getting. Bezos didn’t see books on the top-twenty list, which was a surprise because books seemed to meet the criteria of a standard product. After a bit of research, he discovered that there are so many books in print that it’s impossible for one book catalog to contain information about them all. Such a catalogue would be far too large and expensive to mail. As Bezos saw it, the internet was the ideal vehicle for offering such a catalog. He felt he had enough data to run the experiment to see if books could be successfully sold over the internet.

  Within the year, Bezos launched Amazon and dubbed it “Earth’s Biggest Bookstore.” Using book wholesaler Ingram to warehouse and ship books, Amazon offered the largest selection of books anywhere, without having made any investment in stores, warehouses,
or inventory. But Bezos had bigger dreams than simply selling books. Even before Amazon became profitable, Bezos saw an opportunity for the company to become an online discount retailer, selling a full line of products, from toys to TVs. So he made an incredibly risky bet. He decided to build a number of 850,000-square-foot warehouses around the country. The warehouses originally ran at 10 percent capacity. On the announcement, Amazon’s stock tanked; analysts could not understand why the company was abandoning the original “no bricks and mortar” business model.

  Today, of course, Amazon is positioned as the leading online discount store, with multiple product lines and efficient warehouse and fulfillment capabilities. More than anything else, Amazon is now a distribution company and virtual mall open to other vendors’ products, a far cry from Bezos’s original business idea. But Bezos isn’t done experimenting with business models. In 2007, Amazon launched the electronic reader Kindle, an experiment that has successfully changed the company again. In addition to being a retailer of other companies’ products, Amazon became the maker of a hot new electronic device (cornering 90 percent of the market until iPad’s launch in 2010) and later introduced Alexa, the virtual personal assistant. Bezos has also reinvented Amazon with its cloud-computing services (Amazon Web Services). Amazon rents data storage and computing power to businesses at extremely low prices by leveraging its huge investment in servers and computing equipment to run its online retailing business. By one estimate, 25 percent of small to medium-sized companies in Silicon Valley are now using Amazon’s cloud-computing services.