No better mousetraps, II

In thinking more about the mousetrap problem, it seems that the the most successful innovations actually draw their value not as stand-alone inventions but rather as products or processes that connect users to broader networks of existing products and services that were previously inaccessible or unassembled.Â

The Apple iPod is a great example. It has been called a better mousetrap–design and business critics have praised it clean lines and ease of use. But what I think gives the iPod its real value is the network behind it: the music software, the ability to buy new music online, the clean connections to computer hardware, even the music itself. Importantly, there’s nothing technically new about it.  I made this argument in an article in The Design Management Review (Winter, 2005):

…Behind its clean form and ease-of-use lies a network that connects hardware (Mac or PC), software (iTunes), music distributors, and even artists in ways that no other competitor has matched. Â
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The iPod’s truly inspired design lay in first seeing the value of this new network, and then creating a venture which brought it all together. While each piece of the overall system adds value, together they create an offering that defies replication, let alone commoditization. Companies will keep knocking off bits of the system—online music stores, digital players, jukebox software—but few can recreate the entire network Apple put together. Sony, with their own Walkman experience, PC group, music labels, and vast distribution had the best chance yet, to date, they’ve failed. And what did Sony learn from the process? That integrating the different resources of their own organization— from the design of the box to the software to the digital content management—was too difficult a task. In fact, Sony just created a new venture, Connect Co., dedicated solely to bridging their product and media businesses. Â
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Like the iPod, new products and services will increasingly have to draw their value from the networks that surround and support them. And the design process will have to address this entire venture, not just the box: what it looks like, what value it brings to each participant, and how it evolves.

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There was nothing new about each of the original pieces of the iPod network. Mp3 players were already on the market, as were the software programs for managing your digital music. And Napster provided free (albeit illegal) sharing of music. Apple’s innovation was creating the network that brought all those pieces together for the user. This much was apparent when the cover of Fortune showed Steve Jobs and Sheryl Crow yucking it up. That image was more telling of the value proposition that lay in the network than the thousands of product-porn shots of the little chrome and white iPod.  What’s the most beautiful design feature in the iPod? Ultimately, my money is on the digital rights management technology that made the music executives decide to join the network. It’s the same DRM that will, soon, entice the movie and television executives to join as well.

John Helferich brought up a great example–or challenge–in thinking about an innovation as a network (see his comment): RFID. Walmart made a heap of announcements about how their suppliers needed to begin using RFID, but almost immediately there was push back: the cost to Walmart for the tags and readers–relative to its revenues–was nothing compared to the costs to individual suppliers.  RIght now it’s a great technology and there are lots of hardware, software, and systems providers out there pushing their products. But the real solution will break through when someone figures out a design that benefits not just the Walmarts of the world but also the CPGs, distributors, smaller retail shops, and who knows who else (maybe the end users?). RFID looks still like a fragmented network in which all the gains have been designed to go to just a few of the nodes.Â

No Better Mousetraps

One thing I have learned in the last few years of traveling the country, talking to people in companies about their innovation process, is that there is no shortage of good ideas. The problem lies instead in their collective ability to know a good idea when they see one and execute on it.

When it comes to innovation, it seems, many people are obsessed with the idea of building the better mousetrap. This usually translates to the single, free-standing, IP-protected and revenue-generating product or service that will enable them to hit their promised growth targets for the coming year(s). Managers use this ideal when they search for blockbuster ideas and they use it again to evaluate any ideas that they have. And why not? We all remember Emerson’s famous line: “build a better mousetrap, and the world will beat a path to your door.”

What few know, however, is that this advice is wrong. Jack Hope wrote a great article (“A better mousetrap,” American Heritage, October, 1996) exploring the quote, and the facts, surrounding mousetraps and inventions. Emerson’s advice, it turns out, is wrong because since the US patent and trademark office opened in 1828 it has issued over 4,400 new mousetrap patents. Out of some 400 new patent applications each year, it awards out roughly 40 new ones. And yet only two dozen have made any money and only two designs have ever dominated the market. The most common mousetrap design is the snap trap, which was patented in 1897. The second is the glue trap, which hit the market in the 1970’s (Incidentally, the second reason this advice is wrong is that Emerson never said it. He said, “If you sell better wood, better grain, …” Nothing about innovation. A journalist rewrote those relatively unremarkable lines 7 years after his death, and that’s when they took off). As the numbers show, better mousetraps apparently don’t amount to much.

And yet, despite this history, managers dream of developing better mousetraps–the innovations that will take the world by storm. Innovations to which the world will beat a path. How big a problem is this? I would postulate three major mousetrap traps:

Mousetrap #1: Believing an innovation will, if good enough, create its own market.
In fact, the more revolutionary a new product or process, the more unlikely it will take the world by storm. Consider the Segway personal transporter. It cost over $100M to develop. It was built from scratch and its “inventor,” Dean Kamen, promised it would do to the automobile what the automobile did to the horse and buggy. It was designed, in other words, to be a better mousetrap. Kamen and his crack team of engineers labored magnificently in their laboratories to develop the Segway (first code named “It” and the “Ginger”) but to what end? When this glorious piece of engineering was released to the public amid great fanfare, there was no effective distribution, no complementary products or services, no dedicated sales force. It wasn’t even clear that cities would allow their use on sidewalks. Kamen had promised sales in the hundreds of thousands of units. After two years, a software glitch forced them to recall all of the Segways in use…all 6,000. The world, once again, was not in the path-beating mood. But at least the Segway team got their product out the door.

Mousetrap #2: Requiring that any single innovation support the growth projections for the next year.
Here the folly of rewarding for A while hoping for B shows itself. If the only projects that will get funded are those that promise overnight benefits, then companies will find themselves quickly pursuing a portfolio of projects that are either (a) based on necessarily unrealistic projections or (b) underwhelming imitations of existing the company’s existing brands and products. The Apple Newton is a great example of the former…CEO Sculley had pitched it as the next revolution in computing. In the first year, it sold around 60-80,000 units, not bad for a brand new product and category, but nothing like millions promised. And as examples of the latter, just consider what passes for innovation in the retail sector: the same brands dressed up with new colors or new flavors. This trap is much more insidious than the first because it is based on the belief that there is a new idea out there somewhere that can take the world by storm. As I and others have argued before, the ideas that tend to take the world by storm are not new ones, but rather old ones put together in just the right way. And yet the fact that an idea has already been tried, either internally or by the competition, is often seen as proof that it’s not a better mousetrap.

Mousetrap #3: Insisting that any innovation is perfect before it gets out the door.
The more “perfect” an innovation is before it’s released into the wild, the more likely that it will fail. In part, this is because the development team, with its intimate familiarity with the underlying possibilities, doesn’t want to compromise and as a result overshoots the market completely (the Newton team fell for this one as well, and probably the Segway team too). And this is because Pareto was a product designer too: the time and money it takes to perfect the remaining 20% probably comes out to about 80% (as they say, great is the enemy of good). And finally, perhaps most importantly, this is because the more a team of developers commits to making something perfect, the less able they are to respond quickly when the market reacts in unexpected ways. In psychology, its called escalation of commitment: the more effort you put into a project, the more likely you are to remain committed despite overwhelming evidence that you’re on the wrong course. In innovation, the sooner you can release a product (and the less sure you are that it’s perfect), the more likely you’ll be able to learn from customers what you got right and what you missed, and come out with rev 2.0.

So what can be done about these traps? That’s the million dollar question.

A bit of background…

This blog is about technology, design, and creativity…three big concepts which, if Webster’s provided Venn diagrams, would cover a lot of territory. My focus, in research, teaching, and this blog, is on exploring the intersection between the three. In particular,what is the creative process that leads to new technologies (and can that process be designed)? What is the role of design in gaining acceptance for new ideas and ventures? It’s enough territory to have occupied me for the last decade or so, and the more I learn, the curioser I get.

My approach to the subject exhibits all the classic symptoms of path dependence. It began with a 1994 ethnographic study of the product development firm IDEO. I had just begun my doctoral studies in Organizational Studies when my advisor, Bob Sutton, suggested we look at one of my old haunts, IDEO, where I had worked while getting my Master’s degree in Product Design. We spent 18 months hanging around the Palo Alto offices,watching the engineers and designers at work and engaging in longer interviews whenever something interesting was happening or big questions came up. The partnership and process worked well. In Bob’s words, we acted as each others’ seeing-eye dog–he knew the theories of organizational behaviors (why people do what they do in organizations) and I knew the engineering process (why the technology and design process were the way they were). Over countless conversations, we managed to make sense of why people were doing what they were doing–in this case, creating some incredibly innovative products in an atmosphere that seemed like a disneyland for engineers.

Long story short, we developed some interesting insights that became academic papers. For example, into the role of brainstorming: despite the widespread belief that brainstorming is an effective creativity tool, laboratory studies have consistently failed to find support for such beliefs. by measures of quantity and quality, in fact, there has been a consistent finding that brainstorming (as the purposeful generation of new ideas) comes better through “nominal” rather than “face-to-face” groups. This distinction is mostly methodological, and means you compare the output of 3 or 4 randomly selected people working alone (but called a group for the purposes of comparison) witih the output of 3 or 4 randomly selected people working together around the same table. Consistently, those working together come up with fewer ideas, and fewer good ideas, than if you gave everyone a pencil and paper and sent them back to their desks to think on their own. Obviously, there are countless quibbles you could have with the comparison, but the findings did hold over a range of studies. We took a different approach, arguing that brainstorming played a much more complex role in organizations than simply the generation of new ideas–including sharing a culture of creativity, fostering the transfer of knowledge across the organization, impressing clients, and providing an arena for status competitions around creativity (rather than big offices or backroom politics). And that research ended up as another academic article on IDEO which you can find (you can find it here.

But the paper that set me on my path was the one that explored how IDEO engineers were able to so routinely generate innovative new products and features for their clients. Most studies of the process of creativity and innovation begin with the recognition that something is new–and look to see how people came up with something so new. But in watching and talking with the designers at IDEO, it became apparent that novelty–in the true sense of the word–played the bit part. The lead role in their creative process was their ability to take existing ideas they had seen in other uses and other places and put them together in ways that generated very innovation solutions.

In other words, if you studied the creative process as if it were about coming up with new ideas–you find one set of interesting things going on (like what makes people break the rules, think out of the box, try new things), But if you study the creative process as if it were about moving ideas from where they’re known to where they’re not–you find a whole other set of interesting things. To begin with, you see that creativity is not really an individual and internal process of thinking new thoughts. People, in fact, become the nexus–the link–between old ideas and the thought processes that put those old ideas into new combinations for use somewhere else.

If you study IDEO from this perspective, you can easily see how the creativity of their engineers and designers comes from their exposure to 100s of clients in dozens of different industries. When a project team there is faced with a challenging problem, the chances are quite good that someone else in the organization has seen how that problem was solved in another industry or market. Trouble designing a new hinge to attach the display on a portable computer? Find 4 or 5 designers who have worked in the toy industry, in robotics, in medical devices, and in sporting goods and bring them together for a brainstorm. You can pretty easily come up with a lot of good ideas for hinges that have been developed elsewhere (and the process does looks nothing like the laboratory study). So the critical elements of creativity become what Herb Simon once callled “your network of possible wanderings” and the internal organizational processes (and culture) that enables you to quickly and easily tap into the ideas and experiences of 300+ people working around the globe. Creativity becomes a networking exercise–both outside and inside the firm.

We called this process technology brokering, and IDEO a technology broker, because IDEO and its designers were brokering between the many different worlds in which they worked. Like real estate, stock, or mortgage brokers who connect buyers and sellers, IDEO was able to move ideas across otherwise disconnected networks. We published this finding here here. And at this point, I chose to continue exploring this perspective on the innovation process as my doctoral dissertation. Rather than look at companies that managed to come up with a single big idea, I looked at companies that were routinely creative. The results produced yet more academic articles, many posted on my research page.

Since then, as I mentioned, path dependence has led me to view the world of creativity and innovation, of technology and design, through a lens that is perpetually looking for the networks that either bring new people, idea, and objects together in new ways–or prevent the same from happening. Networks have gotten a lot of attention lately–thanks to the internet, which has provided our culture with a handy schematic, a convenient handle, for seeing the world (myself included). In my case, the networks are less physical than cognitive. Not just the networks that physically connect people (or things), but also the networks that people carry around in their heads. Like maps, these cognitive networks do a better or worse job guiding people as they navigate the external networks. For example, when Stanley Milgram made his famous claim that we are all only 6 degrees away from everyone else (and hence it really is a small world), he based it on how people sent a letter to someone they didn’t know by way of people they thought would. Turns out he was quite a ways off. By studies of databases of large networks, we are apparently more like 3-4 degrees away–we just don’t have the kind of perfect, unbiased network maps that lets us see the more direct routes.

Returning to the networks that lie behind the creative process, I’ve spent the last decade now studying those networks (real and imagined), how they make some people more creative–and firms more innovative–than others. A few years ago, I wrote up this research as a book, How Breakthroughs Happen (2003, HBS Press) that highlighted three major findings:

1. Recombinant Innovation… Most innovations, and especially the ones that spark revolutions, are new combinations of old ideas. From Edison’s light bulb to Apple’s iPod, and from Ford’s Mass Production to Cary Mullis’ genetic equivalent, PCR, the innovations that change the world overnight do so because they combine technologies and ideas that already exist and are well-developed elsewhere. If Edison needed to invent the light bulb (he didn’t) at the same time as he wass perfecting the filament, the network, and the business model, he would have faced insurmountable challenges.

2. Technology Brokering… Creativity and innovation are the result of two focused activities that exploit the networks that surround us: bridging different and otherwise disconnected worlds (in order to see how ideas in one can be used somewhere else) and building new worlds around the creative opportunities (in order to ensure their adoption and success). The more worlds we have experienced, the broader the diversity of people, ideas, and things that serve as raw materials to use when we face new problems. The better we are at building new networks around a new idea, the more likely it will flourish. Edison did not invent the light bulb, but he brought together ideas from the emerging electric lighting industry (arc lamps were already in common use in public streets and parks), the telegraph industry (where he found his wiring and network ideas, and his technicians), and the gas industry (where he found his successful business model: the utility). And he was a master at building these pieces into thriving technical and business networks that would grow on their own.

3, Creativity Networks… The people responsible for these innovations were no more creative (no smarter, no whackier, no more inherently predestined) than the rest of us–they were better connected and better at connecting. If we want to be more creative, we need to stop worrying about thinking out of the box, and start managing our networks to their best effect. Locking yourself in your garage, starting with a blank sheet of paper, or whacking yourself on the head won’t provide you with the raw materials you need to have a good ideas. And waiting to present a beautiful finished product will not bring the world to your door. Further, if we want our organizations to be more effective at innovating, we need to make them better connected to the outside world, and better at connecting internally.

So these are the starting points from which this blog departs. The book dramatically changed my own social network, connecting me to a wide range of like-minded others in academia and in industry. This blog is my way of continuing the conversation with that network as I try to make new sense of everything I’m learning. A real-time reality check, as it were.

Opening the conversation…

A bit of an introduction seems appropriate here, if only for the sake of etiquette. I’ve started this blog with the desire to continue an offline conversation that has emerged with others in seminars, conference rooms, auditoriums, and hallways; over breakfast, lunch, dinner, and wine; and in earnest, in angst, in curiousity, and inebriation.

The conversation has revolved around a set of loosely coupled ideas having to do with technological evolution, organizational innovation, design, and creativity. The language is one of networks. Whether talking with academics, corporate executives, non-profit (social) entrepreneurs, venture capitalists, and just about anyone who happens by, it’s pretty easy to grock the basic concept of networks. But like chess, a network perspective takes a minute to learn, and a lifetime to master. So here we are.

About me, you can learn more here. And I apologize in advance for any blogging errors, technical or social.

Old-style innovation

I had a nice read this weekend of the California and National Energy Efficiency action plans (links here). An interesting question lurks beneath the surface of these two documents.

The approach to increasing energy efficiency these two documents reveal seems directed towards either (1) state and national regulations (building codes, appliance standards, etc…) or (2) utility-driven efficiency programs.

I agree with the power of the former–codes and regulations are responsible for much of California’s leadership in per-capita energy consumption, having held relatively constant since 1974 while the rest of the country has practically doubled.

But energy efficiency programs face a difficult challenge. The diffusion of energy efficiency practices aimed at changing behaviors (ie adopting new technologies or practices) are primarily marketing strategies born in the 1940s and 50s. These are the same approaches that brought hybrid corn seeds to farmers in the 1940s, tetracycline to doctors in the 1950s, axes to Amazonian indians in the 1960s, tractors in Thailand, etc.–textbook “diffusion of innovation” recommendations. Essentially, a larger, wiser organization decides what’s best and pursues the diffusion of these policies to rural populations. And we’re living with the consequences today.

What’s changed in the meantime is a much better understanding that not all emerging technologies are best understood, let alone supported, through this centrally-driven diffusion model–no matter how smart the change agents are (and these folks are smart…I’ve met many of them). There are a great deal more grass-roots and entrepreneurial opportunities to promote innovation than fit within the traditional diffusion model.

In pursuing the broader penetration of energy efficient technologies into the market, some of these findings from the innovation literature come to mind:

1.Technologies evolve in use. This means early adopters get the first solutions, not the best ones…and sometimes this kills the potential for growth. Think how pushing early solar water heating, with it leaking plastic pipes, set the technology back decades. Pushing a technology before its time can do more harm than good.

2. The best technologies are not readily identifiable by single actors–even when those actors have lots of experience. If venture capitalists fail 9 times out of 10, what makes a utility or government bureaucrat (who allocates millions towards emerging technologies) any better at picking winners? Letting the market find and reward the right products and services may seem slower and less efficient, but don’t forget the tortoise and the hare.

3. Technologies live or die by their integration within (local) economic and political systems. This means supporting technological initiatives without supporting their local integration is like throwing seeds on a parking lot and expecting them to grow.

4. Successful ventures depend more on the team than the technology. For those technologies that need to be self-sustaining as business ventures (and most do), the team has more to do with the success than the original technical vision or market plans.

Simply put, any system that focuses too much on “technology” in the abstract and not on the particular details of any one implementation (from the technical details to the market to the team behind it) will most likely fail.