Amazon, Apple, Disney, Google and Hewlett Packard all started in one.  The garage is a uniquely American icon, and metaphor – and it has happened too many times to ignore.

Some of my earliest experiences in design, innovation, materials and fabrication occurred in the family garage under the mentorship of my father and uncles.  Between them, they were skilled in  tool and die making, carpentry and heavy vehicle mechanics.  It turns out in addition to being a place to teach, the garage is also a great place to start a company

For the next few posts we are going to explore the idea of the garage, both metaphorically and practically for their role in modern day organizational innovation and growth.  We’ll talk about  how to create one in your own organization, how to know if its performing, when to scale it up or down, source leadership for it and keep the sponsors excited about funding it.  Perhaps most importantly, we’ll talk about how these garages are a key to unlocking the next growth wave for the US market.

There is a lot to be learned by looking at the essential attributes of the garage and connecting the dots to present day research and observation.  For today’s post, let’s discuss six attributes that make these structures such a hotbed of innovation.

Focus

When people take on a challenge in a garage environment, the problem they take on tends to be very specific.  It is being addressed in a bounded space with bounded resources, so the problem is reduced to it essentials.  These tend to be reach out areas that usually start with “what if” questions with specific, tangible outcomes.

Apple was building 50 computers, HP was building an audio oscillator (that was later purchased by Disney).  Amazon sold books, and Google worked on the algorithm and Disney some of their first movie shorts.

Proximity

Research has shown over and over again that tightly aligned, physically close teams outperform those which are widely dispersed.  When you want to have a quick problem solving session, you make a circle of chairs or stand around the item that needs attention.  Everyone is nearby and supports one another.

Being able to quickly reduce ideas to practice in person has its own accelerating effect.  The idea of calling a formal review is ludicrous – everyone of importance is already there and aware of the successes and failures.

Fun

People who work together in garages usually have an affinity for one another.  They self select each other as volunteers.  They shoot baskets when they need a break, barbecue burgers when the need food.  They customize their work spaces with drawings, jokes, and artifacts of ideas that may or may not have worked.  A high functioning garage has practical jokes and laughter.

Cultures are born in this environment.  People at HP challenged themselves to behave like “Bob and Dave” for decades after their initial garage time.  Steve and Woz laid a  foundation for their (sometimes challenging)  relationship while working side by side.

Low Overhead

Small, multipurpose spaces allow the seeds of a company to be experimented with and restarted in numerous ways until air fills the sails.  In the meantime, low overhead drives maximum creativity for small investments.  All of the famous garages started as spare time endeavors, funded by day jobs or bootstrapped from the beginning.  An internal garage for your company has the same minimal overhead – just the time and space for your team to run with the ideas.

An interesting thing about garage endeavors – they bring the best out of partners when you ask for support or the latest device.  Steve Jobs was famous for making audacious requests of large organizations to keep the project moving forward.

Dedication

A garage environment allows a degree of focus and off the grid dedication that is hard to repeat in the “real world”.  When you are working in a garage environment, it’s hard to keep it from creeping into the rest of your life.  The projects are fun and challenging, and you’re working with people who become close friends.  A conversation with a loved one might spark a new idea for your current garage challenge, and you may well jeopardize your relationship by cutting date night short to go back to the garage and test it out!

Myths and legends are created in this environment.  Solving the insurmountable problem, working all night to get the units shipped, experimenting with a new product line for the online store only to sell many more than you thought – the garage accomplishments have their own mythos that doesn’t appear in larger environments.

Loose / Agile Structure

By necessity, the team in a garage must be both talented and versatile.  This is a resource-poor environment, so you need the software guy to be willing to solder boards for a while, or the machinist to develop some skills in electronics and measure circuits if needed.  But that scarcity in resources is also key to the success of the environment.

The flexibility and natural cross training is key to what makes these innovation hubs so potent.  It has been observed frequently that break out ideas rarely come from experts in the field, but from polymaths who cross over academic and trade boundaries and bring expertise from another field to bear on the current issue.  Velcro, expandable heart stents and post its are all example of boundary crossing insights.

What memory comes to mind when you think about the word “Garage”?  Did you or do you still build interesting things there?  Have any of those experiences changed the way you see innovation?

Please drop me a line or leave a comment below.

“If you don’t know where you are going, any road will take you there.” Lewis Carroll, Alice’s Adventures in Wonderland

When I’m working with clients on how to find the growth plan for their business, I first help them step outside of their organization to see the entire landscape that’s available to and pick the most powerful place to invest. The second phase is to help them describe the growth business model in three dimensions: visual, narrative and financial.

These three dimensions are critical because together they turn an idea into a prototype. These dimensions are key to the magic ingredient in any growth plan: clarity. Only then can we move to the third and final phase of action.

When you make your vision of the future clear, one of two things will happen. Your stakeholders will either have an immediate contribution to make in support, or they will offer a question or change that will prove equally helpful.

Clarity is a Growth Magnet

Clarity draws people into the conversation. When you are crystal clear in your descriptions — visual, narrative and financial — they can engage with the facet that is most relevant for them.

Other ways that clarity is magnet-like in its power:

1. It creates alignment. Those organizations, both internal and external, that join your program don’t have to spend time and energy figuring out what they were really hired to do. They can immediately find their place and start contributing.
2. It draws great talent. There is an axiom that goes something like this: great challenges attract great leadership. In any environment, the best talent has more opportunities than they can take advantage of. If yours is well defined, it will stand out as the place they will want to be.
3. It attracts partners. Clarity and momentum are like catnip for partners — everyone wants to be part of something that is going somewhere. The best partners have more inquiries than they can handle, and when you show up with a well thought out opportunity, you will get to the top of the stack.

Getting Clear to avoid the Big Miss

In her book, Discovery Driven Growth, Rita McGrath suggests that you start with a very clear financial frame for a project that includes these elements:

• A profit plan
• A revenue plan
• The expected returns either in ROI or ROA
• A scope
• A rough NPV

I have found that this kind of planning avoids confusion downstream, and avoids what I call the Big Miss. By doing the thorough planning work, you can pre-sell the scope, intent and delivery of the project to your executive team and avoid having to constantly negotiate your charter at every operational review.

This kind of planning gives you agility. You can form a planning team, set the plan, and build the asset base using either internal central service organizations or external organizations that sell access to assets as a service.

Clarity is a gift.

Finally, in these days of incredible distraction, clarity is a gift to those who are stakeholders on your team, and who want to help you. It takes a lot of energy to sort things out and reframe questions, so by doing this pre-work, you will pass right through many peoples distraction filters and get to the good stuff.

Remember, if you can’t see, smell and taste it — no one else will, either.

The funding model of our roads and other transit infrastructure is broken — what happens now?

Background: An unexpected side-effect of increased fuel efficiency and fewer miles driven in personal vehicles is that government is collecting (much!) less fuel tax revenue — withering the coffers at state and federal levels. This means that our government is increasingly incapable of giving us the roads and transit we need.

I recently chaired a panel discussion at the Intelligent Transportation Society of America (ITSA), and myself, the three panel members, and 30 very active leaders from the transportation community had a lively discussion on this very topic.  Here are some of the takeaways from our conversation.

New funding models, new opportunities

Funding models from one generation rarely repeat themselves the next. The model that funded railroads was useless when it came to building the interstate. The model that built the internet is the not the model that sustains it.

The disruption of traditional funding — a move to increased tolling, mileage based fees and other revenue streams — is actually potential a boon to private sector providers, if you know where to look.

Business model thinking is already shifting in response to this funding pressure. Consumers still need roads, even if the government funding model that previously paid for them isn’t functional. And when there is an unmet need, there is an opportunity for private sector innovation and profit.

Three projects in particular caught my attention, each at the intersection of of policy, technology and economic opportunities. Each of these requires public and private sector cooperation, and each could break open large scale revenue opportunity.

Trading Pavement for Data

Imagine the internet in physical space, with packets of data becoming people moving through their daily routines.  The profusion of location enabled devices create enormous databases of information, a physical internet, if you will.  Imagine the potential of having real time information about who passes your business everyday – perhaps sending a coupon for pizza to someone you know is rushing home to pick up the kids for a soccer match and won’t have time to cook dinner.

Since it wouldn’t be possible to collect most of this data without sensors and other assets created through public investment, the public sector has many of the chairs at this table. The private sector (think Big Data) brings the enormous capability to decode and provide business models for this information.

There are several possibilities for how this partnership could play out.  In Chicago, for instance, the skyway is now owned and maintained privately with an annuity going to the government.  Several cities already charge for access to HOV lanes on a per mile basis – what if your driving habits and travel data could be mined to offer you a cost per mile discount or access to direct rerouting options when you were stuck in a traffic jam.

Going Driverless: Video as Radar

Driverless vehicles, while gaining significant ground in their ability to perform, have faced very high cost hurdles up to this point.  The radar units used in most of these vehicles are a very intricate electro-mechanical device that costs in the high five-figures per unit, sometimes requiring more than one per vehicle.

I was excited to see just how far research has come in using video as a tool for driverless intelligence.  Cameras with multiple processors and sophisticated software are being used as stand-ins for more traditional radar.  While far from ready for production, the transition from devices that have a hard time riding a cost curve to devices that will allow cost scale is huge.

The next step will be shifting some of the navigation load to upgraded infrastructure, via better road markers, RF bread crumbs or other techniques to augment vision alone to bring the costs into the affordable range.  Look for ‘supervised’ driverless experiences in the next decade.

A Smartphone with Wheels

Considering all the collected intelligence on the web, the next big thing is delivering just what you need, when you need it — and in a way that you can use it.  Our smartphones are the best tool for that right now. Unfortunately, the majority of our information (maps, calendars, music, audiobooks) is still largely developed for a large screen/keyboard interaction. Our current devices are nearly incapable of making it more consumable in the moment of need.

Think about the current issues of cell phone use while driving – we all know it isn’t safe to talk or text behind the wheel, but we still see it done.  And for the majority of the time, it’s fine because road conditions don’t require enough mental attention to make carrying on a conversation while driving dangerous.  Now, imagine you are waiting to turn left across two lanes of traffic with cross traffic in front of you.  Your car knows its position and your intent from the nav, and steering inputs.  Someone calls, but your integrated system pushes it to voicemail without notification, because it knows you are busy with complex driving tasks.  Or perhaps you’re in the middle of a conversation and your car senses an obstruction 200 yards ahead.  It could pause your call, notify your caller that your attention is needed elsewhere, and focus you on the evasive action needed to avoid the tree branch in the road.  This line of technology development has progressed significantly with automakers, wireless companies and regulatory agencies all talking about how to make a very big step forward.

Do you see an opportunity for your business?

Any of these trends could present a multitude of opportunities for the right company in the right market.   Let me know in the comments which look like fertile ground for your company.

Looking for the opportunity for growth in disruption is one of the things I do best, and I’d love to chat about the winds of change that are currently affecting your industry. Please feel free to drop me a line.

Last week we talked about how large, medium & small firms differed in their challenges and approaches to innovation.  This week I want to give you four key elements that must be present for success – regardless of what size firm you are in.

1) Line of Sight

In his book Great by Choice, Jim Collins talks about how it’s better to shoot bullets instead of lobbing cannon balls, and to shoot you need a very specific line of sight. For businesses, this is a specific use case and customer avatar. This cannot be overemphasized, because the innovation must do something specific for a specific customer, create real value and in an accessible way.  The notion of the customer asking us to do a specific job, as championed in the book “What Customers Want”, is right on track – what job do your customers hire you for?

The larger the organization, the easier it becomes to generalize your market needs and customers.  In the case of innovation, line of sight is key.  The classic analogy here is the duck hunter who shoots at the flock rather than a specific bird, and usually gets nothing.  Taking this to the product development world, think about how the Windows Intel platform evolved to fit everyone and anyone, while Apple built to specific user cases and market segments.

2) Business case

In any enterprise the best people are overcommitted, which makes them volunteers on any project.  If your project is better organized and easier to jump into, you will receive the best support.  Having a set of visuals that orients new team members is key to getting work done.

You need a business case that makes sense to everyone in the enterprise.  In working with clients, a great tool I use to start this process is the business model canvas by Alex Osterwalder.  Working through the visual map, from key partners to customers, and then putting ascribing numbers to a spreadsheet is a great way to get a team to pull together and win support.

3) Validation before scaling (make it good before making it big)

The number one way innovation goes off the rails is to scale before validation.  Regardless of the size of the organization, take your business model map to your proposed customer base and share it (under NDA if need be).  Steve Blank has documented up to 30 passes before his start up teams get it right.

The best validation is to find a customer willing to co-invest in solution development – and this is more common than you think.  The key is not the monetary investment, but the intellectual investment that a monetary investment brings.  When an organization chooses to co-invest it raises the visibility and structure of its participation.

In the open source world, the currency of participation is to share your contribution to the core back into the “commons”.  This model has seen application in many spaces, including servers, big data tools and design.  When you use co-development as a tool, you and your partner are in sense creating a new “private”commons.

4) Plan for Implementation

Innovation doesn’t just happen spontaneously – ideas need plans and support to become reality.  In medium to large organizations it takes a cross functional team of people to make sure the innovation is truly integrated.  When structuring the implementation team, you need to think about steering groups, operational teams and communications efforts – just as you would a major product launch.

Visionary leaders need to be surrounded by operationally minded team members who know how to capture their wisdom and turn it into a workable plan.  Specifically, there need to be people on board who relish the detailed planning and follow up required to make progress with a complex team of participants across disciplines and departments.  For the visionary leader, this level of detail is mind numbing.  If you need help with effective  team structure you would do well to take a look at Les McKeown’s books, paying particular attention to the VOP model.

Making sure these elements are present and grounded go a long way towards getting an innovation into the customers hands.

Based on your experience, what would you add or contribute to this list?

Please share your comments and perspectives below (or drop me a line if you prefer to share in private).

When I began consulting, my clients were primarily innovators within mid-size organizations. Lately I’ve been drawn into discussions with small and large firms as well.  These consultations have been fascinating lessons in the different approaches to innovation and which approach best fits with which size and stage of business.

One goal, three different paths.

Investable organizations are the new scarce resource, and so you need a good, solid innovation plan to become or stay investable. But where you start has a lot to do with how large or small your organization is. To give you a good jumping off point, I’m going to lay out the different processes that fuel innovation in small, medium and large organizations. (For this post, I’m considering small firms to be less than 100 people, medium firms to be around 1000, and large firms to be 2000 people and up.)  I especially want to show you the typical sticking points so that you can approach innovation from the right starting context.

Small Firm Innovation: Targeted, Doable and Under Budget

In small firms the innovation process is personal. The firm typically enjoys high agility, good communication and solid customer intimacy.  There is usually a core of three teams — sales/marketing, operations and finance — each with flat management structures.

Firms of this size are built around a founder’s vision and shadow. If someone like me is brought in, it usually means that the founder wants to make a direction change. They either need help navigating resistance or developing a surgically targeted next step that leads to results within a clear budget.

 A typical problem may be that the firm has a thriving product that is under commoditization pressure, and wants to develop a signature service that will allow higher service levels and margins. The innovation effort in this size firm is usually led by the founder and close partners, with a small number of part time team members and possibly some outside resources.

Critical issues:

• Because resources are scarce, efficient planning and execution key.

• It is easy for reach to exceed grasp in this size group, so making sure the project is grounded in “the doable” is very important.

• Projects will stretch a team like this, so care must be taken to plan incremental wins to maintain momentum.

 Mid Size Innovation: Branching Out

In medium-sized firms, there’s usually a cross over into multiple profit centers of products and services. These firms have roots around a core business and have either added new businesses organically or through acquisition. For example, Tom’s of Maine has a great founders’ story, and has since added many lines of business to their original core.

The advantages of these firms are that they are still small enough to have reasonable agility, but have considerably more resources to apply to the process.  The challenge in this size of a firm is that the process work that has been done to get to scale have been about consistency and risk removal.  Taking a significant growth step involves designing a process that allows change to be embraced without taking on risk before the new innovation is validated.  An innovation effort in these organizations usually starts with a thought leader who has access to both the customer and the middle management, and who gets the ear of a senior leader.

 In many firms of this size incrementalism has crept in and the returns on the investment for each product are declining.  It takes a significant act of leadership to address these changes.  In my role, I help companies in this position reframe, plan and execute a bigger step to rejoin the growth edge of the market demand.

Critical issues:

• To make innovation happen takes a senior sponsor and a small core team of players to make sure the progress and pace is established.

• Innovation efforts need to be of a scale that they make it to the C-level governance process, just as an investment in new plant or equipment.

• Since businesses of this size are forming their cross connected DNA, completing a few key breakout programs establishes a sustainable positive culture for the future.

 Large Firm Innovation: Silos

Large firms have divisions that are medium-sized firms in and of themselves. There are operational leaders who have responsibility for large geographic areas, market clusters or products. The senior executive team is usually around 10 people, the extended senior team comprises around 20, and the mid senior team may number in the 100s.  The matrices of functional and operational leadership have evolved through a combination of organic growth, acquisition and adaptation.

 Most firms of this size have entre divisions focused on change and innovation, and managing the investment and integration of these innovation efforts is done through an analytical and political selection process. Innovation champions can emerge from a variety of functions, often the marketing or product teams.

A typical problem in this size firm is that the R&D or sales team has developed what they believe to be a game changer, but is having trouble getting the required senior leader support and investment to put it into practice.  More often than not, when I am called in, the various functional leaders are speaking different languages. It’s like a UN meeting without translators. I work to translate the R&D vision into the language and visuals that the rest of the company understands and can digest to get barriers down and real dialogue established.

Critical Issues:

• The change efforts here need to be carefully structured with governance processes that allow for executive air cover and overview, peer level communications, and day-to-day operations of the innovation team.

• These efforts tend to be large, dedicated, cross functional efforts with teams that may grow to 50 or more, so the need to have strong leadership with good program management processes

• It is particularly easy for this size firm to fall into a “mini me” trap, where rather than investing in validating the business model, they invest in a small copy of the parent organization – which tends to swamp innovation just as it need to occur.

 Innovation looks different at small, medium and large companies.

The path of innovation looks very different, depending on the context it occurs in.  Like the difference in process between coaching a tennis player, a basketball team or a pro football team, different size organizations require different techniques and approaches to encourage innovation.

In the next post, we’ll look at the commonalities across all these organizations, and some tips for you as an innovation leader to use regardless of where you find yourself.

Finding funding is supposed to be a huge challenge for startup ventures.  Entire courses are taught on the subject, and entrepreneurs are taught to believe that they need to impress a venture capitalist or angel investor to have a chance at getting their idea off the ground.

But I was just in Chicago with members of the private equity and venture capital community, and I noticed many were looking for places to put their money to work.  This is a community that has been undergoing radical change since 2008, with a net exit from the industry of 65% of the staff and more than 1400 firms.  Those remaining were talking about how hard it is to be “chosen” to source capital.

Investable organizations are the new scarce resource.

I’ve seen these ideas emerging in a variety of places lately. Respected business thought leaders like Clay Christensen and Bain Consulting have been beating the drum — bringing attention to the emerging need for effective innovation.

I’m going to look at each angle to break down their insights. I hope this will help you get an early start on a significant change wave.

Clayton Christensen and the “Capitalist’s Dilemma”

In the mid 80′s, Clayton Christensen founded a company that did everything right, and yet they still failed miserably.  The experience led him to a doctoral dissertation at Harvard, which eventually became the bestselling book, “The Innovator’s Dilemma.”  Now he’s expanding his theories into the capitalist economy and trying to understand why today’s economic indicators are pointing to a robust recovery when the job market is still stagnant.  The core of Christensen’s thesis is that the framework we use to solve business problems has led us into lower risk investments that create financial margin without real macro economic benefit (i.e. jobs). He calls these “sustaining” and “efficiency” innovation. (You can read an interview here, or see a video here and here.)

Christensen is challenging us to think about spending more resources on “empowering” innovation. Empowering innovation increases accessibility to many people who could put it to work, leading to a virtuous cycle that leads to employment.  Think about the famous model “T” from Ford.   Not only did Henry Ford create a car for the average man, he also built a cost/price/production  system where the average man could go to work and own one – opening an avenue of innovation for millions of people.   Mark Suster wrote a great piece about how every significant breakthrough deflates the cost of a product or service for the user.

Clay is calling attention to the dramatic shift in spending from empowering innovations to efficiency ones, which is not a new issue. Every businessman in the world will take the low risk, moderate payoff bets before taking the riskier growth bets.

But what happens after all the low-hanging fruit has been snapped up? I think that results will shrink and organizations will be forced to move up the risk chain when it comes to innovation spending.  This in turn will drive recognition and formation of what I call the innovative enterprise.

Bain’s “Awash in Capital” Report

A second thread here was picked up by Bain in a report called “A World Awash in Money: Capital Trends Through 2020” — a forecast of what the world of capital will look like over the next decade.

The most provocative idea in this report is that for the last 50 years, the defining feature of capital has been scarcity. Business processes have been set up around managing it — including carefully screening projects against investment hurdles, ever-improving forecasting models and quant methods.

What Bain is forecasting is that capital will no longer be scarce. One of the most important and interesting implications of this is that in a world of abundant capital -

the power will shift from the owners of capital to the owners of idea implementation engines.

Pause to think about this. What it means is that the gatekeeper for innovative projects going forward will not be not money, but talent. Specifically, talent that can integrate, build and deploy new growth.

The new world will be about sourcing and combining talent, not capital. (If this is ringing a bell for you, then you might want to learn more about what it takes to find and grow this competency).

The value of the innovation enterprise

My take on the above is that we are morphing from an older view of static, profit-centric organizations (HP) towards enterprises that manage innovation deployment as part of the core portfolio (Amazon).  This will force C-Suite leaders to be intimately involved in valuing their innovation pipeline, and treat decisions on it is as carefully as they would treat an investment in a new plant.

These are tougher decisions that are made with different decision tools than the product centric tools of the past.  Innovation will be a multifaceted dialogue between sales, operations and development.  Leaving innovation to the back room of the CTO’s organization will be a thing of the past.

Stakeholders will reward those firms that move from a product development pipeline to a business model development pipeline.

A few takeaways:

• For boards – is the organization acting as a whole when it comes to innovation?  Can it accurately describe and evaluate its innovation portfolio?  Can it do open an adaptive innovation?

• For leaders – are we investing in the people and training to adopt an enterprise-wide view of innovation. Are we attracting superior talent for this new era across all functions?  Is the “operating system” of our organization up to the task?

• For individuals – Are you building muscle that leads to better innovation and deployment?

What are your biggest challenges to getting your enterprise to move up the value creation chain? Please drop me a note or leave a comment below.

I have written a great deal about technology breakout programs here, but today I want to talk about breakout marketing.  Let’s take a look at how smart positioning is helping one automotive company gain on it’s competitors.

Automotive brands occupy some of the highest-priced brand real estate in the market. Billions are poured into strategy and positioning. The battle between Audi and Mercedes has been brewing for a long time, and Audi’s breakout marketing strategy may possibly be shifting the balance between the two competitors.  

Bravery and Brand Equity

In case you missed it, you can find the Super Bowl ad for Audi here. The gist: a young man is going to the high school prom by himself, and to bolster his self-esteem his dad gives him the key to the Audi. His confidence gets such a boost from driving it that he walks into the prom, walks up to the homecoming queen, and plants a passionate kiss. We see him driving home with an ear-to-ear grin and a black eye — clearly he has had the night of his life. Tagline: Bravery – It’s what defines us.

Business schools have long taught that position is key to building brand equity. Audi is taking on stalwart Mercedes — the favorite in the aspirational brand race — by positioning themselves as the brand for those breaking away from an older, stodgy type of luxury. This approach has been particularly effective because recessions tend to move more conservative buyers to the sidelines, and those buyers are Mercedes’ core constituency.

The results of the drum beat are beginning to take hold.  In 2012, Audi achieved new record totals in every region worldwide — this from an upstart position only a few years ago.  What is happening?  In short, a little tech plus a shrewd positioning strategy.

Audi added a swoopy little strip of LED running lights to the R8 in 2006.  This gave it a very distinctive look, and resonated quickly with younger buyers who were raised on a steady diet of fast and furious movies in their teen years.

In addition to little high tech touches like that, Audi has continued to distance themselves from Mercedes’ target demographic. Last year Audi ran another Super Bowl ad that positioned Mercedes as old  news— it was called Good Night.  Basically, Audi has cornered Mercedes in the positioning game — if they fight back, they risk alienating the white shoe crowd that brought them to the party in the first place.  When you are in the #1 spot, as Mercedes is, the strategy is to protect the core, and that tends to leave the flank wide open.

To be complete, Mercedes has some great options.  First, battles like this tend to increase the overall attention to the niche, and raise sales for everyone.  Market share leaders get more of that sales boost, even if they aren’t driving it.  Second, they too can use the positioning tool, perhaps with something like – we’ll be here when you’re ready for real luxury – playing off the brand equity they bring.  Lastly, when Mercedes chooses to bring it, they know how – the AMG group has some amazing tech, and marketing that effectively will put them back in the game.

4 Positioning Lessons from Audi

Here’s what we can learn from the positioning war that Audi is winning:

• Look out for #3. The number three contender in a tight market is always the biggest threat to number one and two.  In this position, number three can pick a truth about one of the top brands and amplify it until it is a negative.  In this case, Audi has pinpointed how Mercedes is your dad’s luxury brand.
• Differentiate with technology. A little tech can sweeten the pot.  It is remarkable how small the technical differentiators need to be to drive a wedge.  In the case of Audi, it was a visible exterior brand signature.
• Stay the course. Mature markets take a long time to see marketing arcs have an effect.  In this case these positions have been driven forward for more than half a decade, and while its now profitable, staying power is required.
• Timing is everything. A little luck can go a long way.  With European sales off the mark, attention turned to the US and China – two places where the upstart is well positioned.

How will this all turn out?  It’s anyones guess – and this is a long term game.  Recent press has BMW and Audi gaining on Mercedes worldwide.

Speaking of brand wars — did you catch the Samsung positioning against Apple on the latest iPhone 5 launch? It featured a young Samsung owner saving a place in line for his boomer parents…sound familiar?

Curious about how the right positioning strategy could help your brand break out? Please leave a comment below or drop me an email.

Imagine this: you’ve just left your boss’ office and you were given the ball on a major, new, cross-functional project. You are buzzing with ideas about who you need, what you need, and the time and effort it’s going to take.

The question running through your mind in those moments is what should I do first? When I get asked this question, this is my response: first, build the raft. The raft will be the tool that draws the resources you need to you, rather than you having to chase them down.

You’ve got the ball. Now you need a “raft.”

The “raft” in this case is that simple vessel that will carry you, your team, and your project through the rough, uncharted waters of the next few months to completion. To create it, you lash together sturdy lengths of strategy and understanding, and you use your new ideas as the sail.

The 3 Key Elements of Your Raft

Your raft is a container or framework for your project that you and your soon-to-be-formed team can use anywhere, anytime, to recruit support and contribution.

A good raft has three things:

• A narrative framework
• A financial framework
• A visual framework

Let’s look at each of these elements in turn.

The Narrative Framework

The best narratives are based on good storytelling technique, which means there’s a hero. In your breakthrough project’s story, the hero is your customer. Good story structure has been studied for years, and has been summarized in numerous ways. For your purposes — running a successful, breakthrough project — you just need a very concise narrative that that covers:

A compelling statement of the current problem you are solving for the customer

• What triggered our catalyst, driving the need for a project
• The key insight and solution you are pursuing
• The ultimate benefit for the end customer and the enterprise

Here’s an example of the narrative when I was working on a project for wirelessly-connected vehicle safety systems:

(1) The current transportation system results in 40,000 highway deaths per year.

(2) The addition of passive safety in vehicles and infrastructure has reached a zenith in its effectiveness.

(3) By actively having vehicles communicate with the infrastructure and with each other we believe we can mitigate damage in up to 76% of the collisions.

(4) This could lead to 25-30,000 lives saved per year.

The Financial Framework

The narrative will get people interested and will keep your team focused. But you’ll need to back up the narrative with clear, tangible financial benefits. This requires research, but there are a multitude of sources for this kind of information, such as government studies, industry white papers and academic studies. In the vehicle safety system example, Cisco created a public white paper that laid out the financials:

Vehicle connectivity has the potential to unlock more than $30 billion in crash-related value for passenger vehicle owners, insurance companies, and society every year.

What you, the program manager, need to do is take this macro analysis and build a relevant model for your organization. Think along the lines of finding your specific role in the solution, your product or service contribution to that role, and ultimately what financial flow will accrue to your organization based on your participation.This takes some work, but once quantified becomes a very valuable tool to set priorities at the enterprise and functional level.

The Visual Framework

Every relevant program needs to have an easily understood sketch or graphic that instantly appeals to those who are too busy to dig deep in the narrative or financials. There are many ways to do this, but one that I have found effective is the business model canvas made popular by Alex Osterwalder.

A good, high-level visual for the vehicle safety systems is this graphic created by the U.S. Department of Transportation.

(For a fuller visualization of the system in a recent article take a look here.)

Now, put the raft to the test.

In order to start building this raft, it’s a good idea to do the homework that we talked about in the last blog post.

Once you have a basic raft — your rough narrative, financial and visual frameworks — start using it in every discussion you have with management, team members, and (under NDA) your partners and suppliers. Listen carefully and refine your raft as you get feedback. Quickly, your raft will begin to resonate with all your stakeholders.

A strong raft will allow your project to keep your momentum as the inevitable challenges arise, and as you need to have the hard trade-off discussions. While building a raft can be done internally, it really helps to get some objective outside help to speed up the process.

Which pieces of your raft do you have in place, and which are you missing? Let me know in the comments below.

How many times have you seen a talented change leader and an equally bright team fail to move their innovative ideas from concept to market — despite being given a “mandate” from the C-Suite? Today I’m going to dissect how this process frequently breaks down and give you some tips on how to prevent your own ideas from going off the rails.

Here’s the scenario: An up-and-coming growth program manager, let’s call him “Rookie,” is chosen to lead a plum breakout growth project by his company’s CEO, “Mr. Big”. Rookie plans out the project, holds the kickoff meeting — complete with mission and vision slides, flavored coffee and great mini muffins. Mr. Big and all the functional teams pledge their support.

Rookie and his team hit the ground running. They meet the early deliverables. Now it’s time to have the COO, “Ms. Ops” do the first production run in the factory. Sensing that this is going to be a difficult discussion, the team draws straws and Rookie gets chosen to have the hard negotiation.  (This could be Ms. Gregarious who runs big account sales, or Mr. Channel who works with the distribution team – insert your own key core product resource team.)

Rookie gets on the phone to Ms. Ops’ office. He requests a run for his team’s new product in the large scale production environment and he’s skillfully rebuffed.  It turns out that they need to explain why the new device has not used materials from the world wide environmentally qualified parts list before the project can port into the production environment. Ms. Ops asks Rookie to go back and do the work. Rookie hangs up his headset and shakes his head.

The additional (and quite necessary – to avoid potentially putting unqualified materials in the core product by mistake) supply chain work causes schedules start to slip, and pressure mounts. So out of desperation Rookie calls back and uses the “Mr.-Big-wants-this-done-as-is” card.

Ms. Ops politely requests that he ask Mr. Big whether she should meet this month’s production quota or run the prototypes.

Rookie has found out the limits of his “mandate” for innovation.

How to Avoid Rookie’s Mistakes

New innovation means organizational change, and change leads to resistance — even in the best run groups.

The first mistake is to assume that everyone will have the same enthusiasm you do for your new product, service or way of doing business. To most members of the management staff, even a well-run innovation project looks like a freight train on a gravel road — unpredictable, noisy and carrying way too much momentum.

So here’s my advice for Rookie:

Listen & walk a mile in their shoes

Make a habit of identifying both the functional lead of organizations and their right-hand person. If you’re not sure who this is, ask who takes over for them when they are on vacation.

Grab breakfast, coffee or lunch with them before putting a pen to paper for your project. Ask them about their world, the current challenges and listen to what they have to say. Find out what their operating plans are challenging them to do for the year. Also listen for the key vocabulary they use – words have great meaning. If possible make a physical visit to their place of work – more than half of communication is nonverbal, and one visit can eliminate hours of conference calls.

Understand the operational limitations

Your “mandate” for innovation must operate within the practical constraints of the company, and the Mr. Big in your case probably won’t spell those out for you.  Use what you’ve learned from talking with organizational leads and visiting their work spaces to construct operating parameters for your project.  Reach back out to confirm your assumptions and take them into account when your team begins work.

Rookie could easily have learned about the preferred parts list and incorporated it into his team’s design work from the very beginning, thus making his request for a first production run much more likely to be approved.

Make the case for change in a language that’s relevant to them

Refine your business case for the innovation in terms that are meaningful for the function you are working with. I find that it needs to be short, and have three elements – visual, narrative and numerical. If you refine the benefits to the overall organization and make the effort to translate them for the groups you need help from you’ll start on much better footing.

Today’s organizations have been highly refined and optimized in all dimensions – people, process and equipment. It is very important to get a handle on exactly how your new innovation will affect the operation and make very efficient use of the scarce resources.

Over-communicate your progress, issues and outcomes

Once you have engaged your organization’s stakeholders and made the case for change in a language relevant to their function, it is very important to over communicate your status and timing for the resources of their function critical to your success.

While Rookie is working on this full time, the marketing, sourcing, sales and other functions only hear about this at quarterly functions and reviews. A concise weekly update that is in front of sent out to everyone keeps the air clean.

An Alternate Ending to Our Story

I’m not saying there will never be conflict – that’s just not real. By having conflict on top of well grounded planning and understanding it will be productive conflict – moving the ball for the enterprise.

So with these new strategies, we can see a rosier outcome to our scenario. Rookie is holding his quarterly review; Mr. Big and Ms. Ops as well as HR and CFO are there. Rookie goes over the gantt chart, and Mr. Big wants to know why he didn’t meet the prototype I date. Rookie swallows hard, and before he can answer Ms. Ops jumps in and says that Rookie did a great job of giving us a heads up, but due to Super Important Client Account’s needs, the factory couldn’t queue in the prototype.

Mr. Big smiles at the peer level teamwork and moves on. Rookie grabs a refill of flavored coffee.

Do you have other insights on running innovation teams. in cooperation with established operations?  Please send me a note or leave a comment below.

Photo Credit: kakissel via Compfight cc

Maker culture — the DIY, tinkerer ethos embodied by a young Jobs and Wozniak soldering components together — has been with us for decades now.  This community has always been fiercely independent, intelligent and creative, and many amazing companies and innovative products have emerged from its ranks.  The rise of the internet gave makers an additional way to collaborate, and an influx of innovative tools such as 3D printers is now fueling a new industrial revolution — removing barriers between idea and reality.
Last week I had the privilege to moderate an #innochat around the maker culture and innovation.  #Innochat is a real-time Twitter conversation that happens every Thursday at 10:00 AM EST using the hashtag #innochat.

If you are not a Wired magazine reader or Maker Faire attendee, you might enjoy Innochat’s post about maker culture that framed our discussion for last week. We’re talking about nothing short of a new industrial revolution driven by 3D printers — devices that can turn a digital file into a three-dimensional physical object.  This quickly-evolving technology has many ramifications for product design and all related processes of manufacture and fulfillment.

Every growth leader needs to be scanning the horizon for sea changes in technology, processes and practices that can impact their businesses.  With my background in materials, design and business development, I have been watching “maker culture” with great interest — it has big implications for business transformation, and we had real conversation about what this might look like during last week’s #innochat.

Here is a brief overview of the main themes that emerged from our discussion, organized around our framing questions for the conversation.

What are the design process implications of rapid 3D models?

• Design philosophy has to change. Less component assembly. Print the complete item in one go @fabianking
• I also think where services rely on physical objects, a better understanding of user experience can be developed earlier, too @drewcm
• for developers ‑ more prototype iteration; better integration of function and aesthetic @Innovationfixer
• for the customer ‑ easier customization; shorter buy cycles; modelling to try before you buy; hologram‑like 3D catalogues etc @Innovationfixer
• It’s time to think enough and do more. More experimentation, more refining @Jabaldaia

Chances are the coffee pot in your kitchen-started life as a 3D printed prototype.  What product categories will benefit most?

• What about customised items? Say goodbye to discrete sizes, why not continuously variable?! … as the shoes example @johnlewis
• Spare parts & catalogue fittings ‑ less inventory/logistics @fabianking
• Rapid 3D effects on toys, electronics, health care, dentistry, hardware, and many others. Why wait when you can print? @4byoung

Many are concerned with the disruptive possibility of “cloning” and loss of OEM control.  What is your view?

• Also a question of downstream liability for product designers ‑ if consumer is end manufacturer @scottpropp
• Given the rapidity of development, old school loss of control is a given. New value points will become evident / exploitable @drewcm
• Where there is a printer, there could be a copier. @Marcio_Saito

What business model changes do you see based on this innovation?

• Democratized 3D printing capability enables all consumers to be producers. Huge business model innovation opportunity @skap5
• Faster time to market. Faster in‑market response. More brought back in house, and brought back from e.g. China.@innovationfixer
• 3dp in craft sector offers opportunity for more then product disruption; example from Scotland http://t.co/8rSIZDsC @CreativeDynamix
• What about replicas/reproductions of “out of print” items? @johnlewis
• small local shops doing more business, just like mills and forges in 19th Century @innovationfixer
• Micro‑mass customization + small‑batch offerings. Could see interesting shifts in #luxury products market @drewcm

You can get a PDF copy of the entire chat by clicking on this link.

#Innochat gave me a lot of ideas for just how this emerging space will impact all of us — and I hope this post does the same for you.  In an upcoming post we’ll unpack how to plan for and make use of changes like this in your business model.

For those of you who would like to go deeper on these ideas, here are some links you might want to explore:

• A representative printer
• A contrarian’s view
• Specialty Manufacturing – Parts for Jet Engines
• IP Issues
• Sustainability

Please shoot me an email or leave a comment below if there is a specific application you’d like to explore.