Thursday, May 29, 2014

3 tools I find useful as an innovation catalyst

Over the last seven years, I have been doing my bit in helping my clients innovate more effectively. Their business domains varied from apparel design to aircraft design and from software product development to educational services in social sector. During this journey I ended up using a number of tools – perhaps over fifty. However, I have developed special friendship with some of the tools – primarily due to their usefulness under varied contexts. Here I would like to present 3 such tools which I find very useful in almost any context.

Weighing scale: I am a big fan of weighing scale as a metaphor. It is simple, easily accessible and provides emotion-proof feedback. You weigh the same no matter how angry you are. In contrast, a report based on an annual survey is typically neither simple, nor that easy to re-create and incorporates emotional biases. I suggest innovation dashboards and also get my clients into a dialogue on 5-levels of innovation maturity which are more like weighing scales. Not everybody in the room may agree on whether they are at level 2 or 3 on innovation maturity. However, it creates a useful discussion on what they can do next. For example, if the key challenge is that the average response time for an idea is more than a month, a discussion happens around what can be done to reduce it.

Bright-spot torch: A torch is useful in focusing the attention to a specific area. I use a special type of torch which helps me focus on bright-spots in the organization. Bright spots are things that are already working well in some corner (e.g. see how bright spot led Steve Jobs to iPod). A few weeks back I facilitated a session on writing technical white papers in a client organization. As part of the preparation I tried to gather the technical papers written by the employees in the organization in recent past. None was identified. However, when I asked the same question during the session, one hand got raised. In fact, he told us the story of how he went about preparing for the paper which everybody found useful.

Bright spots are useful because they can tell us a lot about how things work in the same cultural context. They inspire and also give direction. Bright spots are not easy to find because they typically don’t bubble up through status reports. Whether it is interesting prototypes or big bets related to specific technology trends (like cloud or humanoids), chances are high somebody in some corner is working on it or at least thinking about it. Can we zoom in there and find more about it? Perhaps the situation is scalable.

Checklist: Intuition works great when we are doing things we are familiar with. However, when we are trying to change mindset, intuition is not very helpful. Sometimes people are not used to submitting ideas, managers are not used to listening to ideas with an open mind, and senior managers are not used to participating in innovation reviews. In such situations I find checklists very helpful. I propose a checklist whether it is a challenge campaign or an innovation review or even a white paper to be written. For example, here is a sample checklist for running a challenge campaign and here is an author’s checklist for writing a white paper. My customers find it useful. In fact, I have earned some brownie points by creating a checklist for groceries which we use at home. A checklist is more helpful when intent to improve things exists. You need different set of tools to generate intent (e.g. a challenge book). It is not surprising that each chapter in our book “8 steps to innovation” has a checklist at the end.

Monday, May 26, 2014

Mouse charmers by Anuradha Goyal: A book review

If you live in India, chances are high you are familiar with companies like Flipkart,, Like me, you might have bought books from flipkart and booked tickets from Makemytrip. You might have paid using cash-on-delivery. And that may give you a feeling, “Oh, I know how this business works”. But, do you really know how these businesses really work? Anuradha Goyal points out in her debut book “The mouse charmers: Digital pioneers of India” – The devil lies in the details. Do you know how Flipkart uses A/B testing framework to perform dozens of experiments at a time? How Zomato manages to keep its menu updated? On an average, how much does it cost Games2win to develop a new online game? Anuradha brings out such details and much more through the stories of 12 digital pioneers of India. Here are 3 things that I liked about Anuradha’s book: (Note: Anu is a friend of mine and hence this review will carry a natural bias).

Broad canvass: Amazon, Google and Yahoo are all Internet players. However, they are fundamentally different businesses. Amazon is an e-commerce player, Google is primarily a connector and Yahoo a content provider. Anu uses this categorization (commerce, content and connectors) to cover a broad canvass of Internet players from India in this book. Apart from the big daddies like flipkart, it also has smaller players like ImagesBazaar, Games2win, Chai with Lakshmi. It covers commodity players like BigBasket (online grocery) and it also has luxury players like CaratLane. Two sectors which are conspicuously missing are healthcare and education. Reason is obvious – these are still in a nascent form. If we go by the buzz around where Venture Capitalists (VCs) are investing today, picture is likely to be different a few years from now.

Business model emphasis: The part of the book which I found most interesting is Anu’s abstraction of the business model for each player and emphasizing the components that are most crucial in that business. A content player like Zomato has a very different business model than a Flipkart or Makemytrip. For example, for Zomato, keeping the menu card updated is most important. It means visiting its 1,00,000 restaurants every 90 days. That’s a significant investment! For which delivers perishable items within hours of order, logistics management is one of the most crucial elements. Given the chaos on the roads of the Indian metros, how do you do it? Currently, BigBasket delivers in 4 slots during the day, 2 in the morning and 2 in the evening. Anu highlights various business model templates like Freemium, Media model (Zomato), SNAP (Studio, Network, Application and Portal – Games2win) used by the players.

What are they doing differently? Each player is trying to do various things to differentiate itself. Flipkart is using analytics in presenting live statistics, identifying sudden spikes in orders and taking policy decisions such as the minimum purchase price for free shipping. For Makemytrip it is the route planner, CaratLane’s emphasis on educating customer on how to judge a diamond etc. For many players technology platform is a differentiator and some cases Anu’s goes into more details to present the broad architecture of the platforms.

Here are two perspectives I feel the book could have done better on:

Financial perspective: For any budding entrepreneur, it is important to know how much investment is needed, how did these guys source the capital, how much did they put from their pocket, how long did it take to become profitable, how much is the typical margin etc. An important dimension is to provide VC perspective – Who all are the players who invested in these companies? At what point of time in their journey? How much? Etc. Not much is available in the stories.

Failed experiments: What did work is indeed useful. However, what didn’t work is equally if not more useful. Unfortunately, such information is not easily available especially in Indian context. Anu has tried to present this data wherever she was able to get it. In fact, Games2win has explicitly listed failed experiments in its website. However, not much of this is present.

Overall, Mouse Charmers presents an excellent overview of the digital landscape of India. I am sure budding entrepreneurs will find this book useful. The scene is changing fast but business models are re-usable. I admire Anu for wearing multiple hats at the same time – travel blogger, book reviewer, innovation consultant. With this book she adds another feather in her cap. I wish the book success.

Thursday, May 1, 2014

1996 Everest disaster and a lesson in “design as if implementation matters”

When I finished reading “Into thin air: A personal account of the Mt. Everest disaster” by Jon Krakauer a couple of weeks ago, it was still considered the worst Everest tragedy. It is a story of a disaster that happened on May 10 and 11, 1996 on Mt. Everest in which eight people died in a single storm including two expedition leaders: Rob Hall and Scott Fischer. However, as I am writing this blog, it is no longer the worst tragedy. Friday before last, on April 18, sixteen Sherpas got killed in an avalanche. Climbing Mount Everest continues to be a risky affair and no amount of learning is likely to completely eliminate the risk. In the words of Krakauer - On Everest, it is a nature of systems to break down with a vengeance. That doesn’t prevent people like me in deriving learnings from the 1996 disaster story. Here is my key take-away from “Into thin air”.

Rob Hall was world’s leading Everest guide running a company “Adventure Consultants”. By 1995 Rob had assisted thirty nine clients reach the top of the mountain and return back safely. In 1996 May expedition his team had clients some of whom had paid as much as sixty five thousand dollars in order to get to the world’s tallest peak.

Rob was disciplined and meticulous. He had fine-tuned an effective acclimatization plan that would enable the team to adapt to the paucity of oxygen as you go up. Rob knew that timing is crucial in Everest expeditions. He lectured the team repeatedly about the importance of having a pre-determined turnaround time on the summit day. It would be 1pm or worst case 2pm. Everybody was to abide by it no matter how close one was to the peak. “With enough determination, any bloody idiot can get up the hill,” Rob would say, “The trick is to get back down alive.”

On the summit day, Rob reached the summit after 2pm and waited for his team member Doug Hansen to reach the summit till 4pm before they began their descent. Doug was so tired by the time he reached the top, he didn’t have much energy left to come down. As luck would have it, he ran out of his oxygen too. Both Rob and Doug got caught in the storm that followed and didn’t make it down. How could a disciplined expedition leader like Rob Hall make such a mistake of not adhering to a predetermined turnaround time?

As Krakauer writes in the book: Lucid thought is all but impossible at 29,000 ft. In addition, the intensity of the desire of achieving the goal – for you and for your clients - is much higher than the cold-blooded process adherence and turning back at 2pm. In short, your thinking is heavily biased. But equally importantly, it is known apriori that your thinking is going to be crooked as you climb up. Then why not plan taking into account such a possibility? Is it possible to create a plan that accounts for the distorted thinking during its implementation? This is the central question when you want to “design as if implementation matters”. To use the Elephant-Rider metaphor of the mind, it is like the Rider planning for a situation when the Elephant has taken over. How do we do it?

Here are a few options none of which is fool-proof: One, responsibility of the turnaround decision can be delegated to a place where the mind is less emotionally charged and has more oxygen e.g. the base-camp or camp-one. Two, after the predetermined turnaround time, everybody coming back takes the responsibility of requesting the up-going climber to turn around, despite your position in the pecking order.

Three, each expedition team performs pre-mortem before the expedition begins.  In this exercise everybody in the team imagines a situation in the future when the project has been a massive disaster. In Everest expedition, it means imagining your own body lying around 28,000 ft and several other casualties. And then listing down what all went wrong. That leads to various precautionary measures and a common understanding of the importance of a protocol such as turnaround time.

“Design as if implementation matters” has significant implications for the design of business strategy.  A strategy which gets finalized in an offsite in cosy settings may fail to take into account the emotional biases of the team during its execution – just like Hall’s Everest team.

No amount of planning can eliminate the risk in Everest expeditions or in business. However, techniques such as pre-mortem may help increase the “Margin of safety”.

A related video
Mt. Everest - The storm (1996) - A PBS  documentary on the 1996 disaster directed by David Breashears, one of the members of the IMAX team who climbed Everest during the same season and also helped the teams caught in the storm.