Wednesday, January 19, 2005

War, Innovation, Gorillas, Relevance, & Strategic Incrementalism

From time to time in my email is one of my favorite newsletters, Corporate Warfare and today was one of those times. “The Risk of Normal Innovation” by Tal Newhart, ( ) was the topic in the Corporate War Newsletter ( )

Now I have to admit I am something of a hawk when it comes to defense and business. Or maybe you could say it is just intensity. Hawk or intense either description carries risks.

For those of you who resemble that remark you also need to be aware that intensity, motivation, speed, or a sense of urgency can easily be misinterpreted as arrogance, aggressiveness and ambition, which it may be unless you check your intent (see the December 31 post on Intent).

When that happens, your in for a war that is not about the innovation or change you are working on but about you, and you don’t want that kind of struggle, it will not change anything.

Mr. Newhart tells the story of Alexander the Great and the Gordian Knot. Alexander found a solution no one else had found, take out your sword and slice it in half. From that we are prodded to look at problem solving differently. Create innovation and usually you will need to slice it into bite size pieces so that your customers will accept it (internal innovations need the same approach).

In today’s business we need to provide solutions that are relevant to our customers. Not just good ideas or products but value creation that customers both want and are willing to pay for.

To find value that is wanted and willing to be paid for you need to be communicating with your customers regularly and testing innovations with them for relevance. Usually, those innovations will need to be sliced into very small bites as few customers will either swallow or pay for an elephant.

Of course all of that means nothing if once you design a solution and find its acceptance you don’t implement it, because a good idea is no better than a bad idea unless its implemented. But once implemented, you are not finished even if your solution is right. Because right is only determined in business by the outcomes. Did the implementation add measurable value to your customer AND your company?

Mr. Newhart mentions ‘disruptive technology’ as a pop term used to speak to innovation or change that is relevant but does not include all the scope (and perhaps complexity) that it can be. In other words creating the first small bite, knowing the innovation or solution will have improvements to come and value to add and price increases to pay for it. Offer the first bite and that bite only, after it is finished, move on to the second bite (See Strategic Incrementalism below).

It also speaks to your knowledge of the direction in which your customer(s) are going.

That reminds me of the gorilla story.

When a gorilla is in a glass walled room with Phd’s looking in and studying every move. While they believe that the animal is learning new things, all the gorilla really wants is the banana. Customers are the same. They want just what they want. You cannot sell them more even though it contains the bite they need. I like to call this: “Strategic Incrementalism”.

Give them what is relevant now, and up-sell them the steps toward the entire solution in pieces as they absorb and assimilate them. This helps you control costs and increase margins as the progress continues. It also keeps you from having to generate ‘point-solutions’ every time a customer rings up to say they want a change.

Know where they are going and you will stay relevant.

A great point is made that if you are not innovating, your customers are and they may decide to innovate with someone else. So what is your Gordian Knot? How are you going to think differently to untie it before your competition does?

Mr. Newhart says that “A company exists to create customers”. Agreeing completely with that statement (in my earlier post “Rules Part I”) rule number two says that the ONLY thing of value in your business is your customer’s order. So create orders and customers with innovations of bite sizes and up-sell them to grow margins and profits.

If you don’t see that easily, you are not focused on your customers. All the bells and whistles you have don’t mean a thing unless as we both are saying you are creating customers through their orders.

Now go out and be a Warrior Diplomat, starting with courtesy, creating value with innovations and delivering customer loyalty and profits with Strategic Incrementalism. Oh, and don't forget the sword.



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