3 lessons innovation leaders can learn from the iPod story

Walter Isaacson begins chapter 30 of the biography Steve Jobs titled “The Digital Hub” with a “What next?” workshop Jobs facilitated in 2001 where iPod idea got a push. However, as we read further into the chapter, we come across various events that influenced the decision making, shaped the idea and took it forward. Here are 3 lessons I feel innovation leaders (CXO, product managers, Biz heads, VCs) can learn from iPod story:

     1.     Strategic theme (“Digital Hub”): Apple introduced FireWire technology in 1999 that would help transfer video from cameras into iMac fast. The video could then be edited, mixed with music and distributed further. Seeing this Steve Jobs realized, “Using iMovie makes your camcorder ten times more valuable. That’s when it hit me that the personal computer was going to morph into something else.” Jobs would call that “something else” – “Digital Hub”. A side effect of PC becoming a hub was that it would create opportunity for personal devices to become simpler. Note that the source of the insight was an internal "bright spot" (i.e. iMovie-camcorder joint value creation) not a trend discussed externally. Digital hub would soon become the dominant theme during the brainstorms like the one mentioned above. I have facilitated “What next?” workshops for the past several years. Rarely do I come across a team or its leadership with clarity on strategic theme such as “Digital Hub”.

2.     Investment confidence ($10 million check): iTunes software was launched in January 2001. However, Jobs had started pushing for the portal music player idea a few months earlier – in the fall of 2000. At that time, Rubinstein responsible for hardware engineering, told Jobs that the right components were not available yet. During one of his regular supplier visits to Japan in February 2001, Rubinstein came across a tiny 1.8-inch Toshiba hard-drive with 5GB space. Toshiba engineers were not sure what it could be used for. Rubinstein realized its potential use in the portal music player. Fortunately, Jobs was also in Japan giving a keynote at the Tokyo MacWorld conference. That night he met Jobs at the Hotel Okura where Jobs was staying and said, “I know how to do it. All I need is $10 million check.” Jobs immediately authorized it. That was roughly 2.5% of the R&D spend at that time and R&D budget was around 5% of revenue. This demonstrates Steve’s investment confidence – not that easy to find at least in India.

3.     Business plan review (Experimentation focus): “There are certain meetings that are memorable both because they make a historic moment and because they illuminate the way a leader operates.” This is how Isaacson describes the iPod’s proposal review meeting in April 2001. Tony Fadell, a new joinee and a key brain behind iPod was the presenter and in the audience were Jobs, Rubinstein, Schiller (designer), Jonathan Ive (Head of design), Jeff Robbin and marketing director Stan Ng. It was Fadell’s first presentation to Jobs.

Fadell began his presentation with a slide deck on the potential market and existing players and soon realized Steve doesn’t like slides. Steve later told Isaacson, “If you need slides, it shows you don’t know what you’re talking about.” Fadell quit showing the slides and showed the three different models he had brought in to the conference room. Rubinstein had coached him on what order to reveal them so that his preferred choice is shown last and with a bit of suspense. The last mockup option was hidden under a wooden bowl at the center of the table.

Fadell took various parts out of a box and spread them on the table. These includes 1.8-inch drive, LCD screen, boards and batteries all labelled with their cost and weight. This was followed by a discussion around how the prices might come down in the coming year. Some pieces could be put together, like Lego blocks, to show options.

The models were made up of Styrofoam. The first one had a slot for removable memory card, the second one had DRAM memory which was cheap but user could potential lose all songs if battery ran out. Jobs didn’t like both of these models. The final model was shown by lifting the bowl and revealing the fully assembled model of 1.8-inch drive. Next Schiller demonstrated the trackwheel through a few models. Jobs shouted, “That’s it!” The decision was made and Fadell & co got working on the project immediately.

Fadell recalls, “I was used to being at Philips, where decision like this would take meeting after meeting with a lot of PowerPoint presentations and going back for more study.”

As an innovation leader ask yourself: (1) Do I have any strategic insight like the “PC as a Digital Hub”? (2) Am I willing to write a “$10 million check” for the strategic initiative when a “Rubinstein” shows up? (3) Can we emphasize experimentation (prototyping) in the business plan review over PowerPoint projections?

Source: Primary source of the story is chapter 30 of Walter Isaasson's biography Steve Jobs. Image source: en.wikipedia.org.
“Apple’s R&D spending hits bottom as percentage of revenue” by Larry Dignan, ZDNet.com, October 17, 2011. (has a table that gives Apple’s R&D as a percentage of revenue since 2000).

Is Google 20 percent time same as "Right to experiment"?

A few months back I presented following argument to PGSEM students at IIM Bangalore: Google “20 percent time” practice is same as “Right to experiment (RTE)”. I thought I had made a good case. However, a number of hands were raised and they all argued against the statement. And soon I realized that I was indeed wrong. How exactly is Google 20% time different from RTE? Let’s explore in this article.

What does Google “20 percent time” say? It says that a Google engineer can spend up to 20 percent of his time experimenting with his own ideas. Google wasn’t the first company to implement such a practice. 3M introduced 15 percent rule in 1940s. I asked following 2 questions to the students in the class (all of them had their day-jobs as managers in software companies):

1. Do you need to take permission from your manager if you have to do an experiment – assuming no impact on your deliveries?
2. Does your team member need to take your permission for performing an experiment – assuming no impact on deliveries?

Most of the students answered both the questions as “No”. That is, in many of the companies nobody questioned experimentation so long as it did not affect the deliveries. Even for the Google employees, most of them have to work on their deliveries anyway and find additional time for the 20 percent project. This is equivalent to the practice being more of 100-and-20 percent instead of 80-20. If that is indeed the case then how different is it from their situation? Isn’t their situation equivalent to having a 20 percent time? When I raised this question, I expected a mixed response. What I got was a vehement “No”. Here is a gist of what students said:

• Legitimacy: When an organization formally or informally approves a “20% time”, it makes “right to experiment” legitimate. The legitimacy makes a difference to many employees who don’t have to worry about whether what they are doing is “right” or “wrong”. Even if it is not a formal policy, it still sends a message that management values experimentation.
• Infrastructure: If you want to run a 20% project, you may need additional help. How do you communicate your intent to other engineers? Google-like organizations create bulletin boards where such projects can be announced where people can enrol etc. It makes it easy to implement such a policy.
• Senior management attention: Perhaps the most important aspect of 20 percent time is that somebody from senior management is watching the progress of at least the interesting 20 percent projects. As in Paul Buchheit’s story of AdSense, when a project shows significant promise, resources are put behind the project and it is incubated. If such a mechanism is absent, the motivation to work on the project inside the company is low.

Last year we saw a debate as to whether Google has killed 20 percent time. Ryan Tate has argued nicely that Google couldn’t kill 20 percent time even if it wanted to.

Why does Einstein say that “One Max” person reading his theory will suffice?

A couple of years ago, I got an opportunity to watch Steve Martin’s play “Picasso at the Lapin Agile” in Bangalore (directed by Vaisakh Shankar and produced by Bangalore theatre group Tahatto). In this play Einstein and Picasso meet at the bar “Lapin Agile” in Paris in 1904. Einstein has just written “Special theory of relativity”. In one scene (21:30), Germaine, the waitress, is trying to help Einstein on how to popularize his book. This is how the conversation goes:

Germaine (23:30): You want your book to have impact, don’t you?

Einstein: Sure

Germaine: And if you want it to have impact, you got to have people read it, don’t you?

Einstein: Yes…

Germaine: Okay, in your field, how many people do you figure need to read your book to have some impact?

Einstein: One

Germaine: No, no, no. In order for your book to have an impact, a lot of people have to read it. Every man in the street has got to have one.

Einstein: No… Only one, Max.

Germaine: Max?

Einstein: Max Plank, a German physicist… very influential. If he reads it, he makes my reputation.

The play is a fiction. However, the point Steve Martin brings out in this dialogue is true. For a person with a “great idea”, an influential person can be of much greater help than a bunch of customers. We call such a person “champion” in our book “8 steps to innovation” and for Einstein, Max Plank was indeed such a champion.

By the time relativity paper was published, Max Plank was a respectable name in theoretical physics and Einstein was an unknown figure. After relativity paper was published Plank was not only the first person to give a lecture on the subject, but also the first person to write a paper building on Einstein’s idea. Later he made a strong recommendation that brought Einstein to University of Berlin. Plank also recommended Einstein for the Nobel Prize.  

There is a reason why I find Plank’s championing of relativity surprising. Along with relativity Einstein had published another paper on the nature of light (light quanta). This paper built on Plank’s work which had introduced the now famous Plank’s constant. However, Plank did not agree with Einstein’s interpretation of the nature of light. In spite of this disagreement, Plank championed the “other” idea of Einstein. Quite remarkable!

Working on your pet idea? Then think of who could be your "Max Plank"!

Source: 

Image: www.broadwayworld.com

Walter Isaacson, “Einstein:His life and universe”, Pocket Books, 2007.

Eckhart Tolle’s “catch me if you can” experiment

Traditionally, spirituality is associated more with faith rather than experimentation. However, some spiritual teachers such as Eckhart Tolle speak the language of experimentation. In fact, Ekchart’s experiments are typically low-cost. For example, he says, “One conscious breath in and out is a meditation”. In this article, let’s explore one such experiment Eckhart suggests which I call “Catch me if you can”.

Well, the overall objective is simple – you want your mind to be peaceful as much as possible. Perhaps it is peaceful most of the time, except, may be, when you are provoked by someone – say your boss. Dimitry from Moscow asked this question to Eckhart during Eckhart's interview with Oprah Winfrey, “When I am criticized, I get into power games, so can you recommend something?” To which Eckhart asked Dimitry, “When do you become aware of your frustrated state? after a few minutes? End of the day?” Dimitry answered, “It depends upon the situation. If the situation is minor, I am aware of it five minutes after. But when I am deeply criticized by my boss, I can be in this state for a week.”

Now, Eckhart’s experiment is as follows. Whenever you get into a negative emotion such as frustration or anger, you need to observe how long you remain completely lost in that state. Note that once you are lost in, say anger, there is nothing you can do about it because you and anger are not different in that state. The recovery towards peaceful mind starts once you notice, “Oh, there is that anger in me.” At what point of time such an observation happens is the crux of this experiment.

The objective of this experiment (or game) is to catch yourself in the state as early as possible. Eckhart divides your "Gotcha" point into three stages.

·         Stage-1: You catch yourself just before you are going to become angry – perhaps you notice the trigger such as your boss’s criticism and become alert. Your goal is to catch yourself in stage-1 as much as possible. Why? Because your emotion can’t sustain itself for long when you detach yourself from it.

·         Stage-2: You catch yourself as you are entering the state i.e. you catch yourself getting angry. Perhaps you can’t do much about it and you get angry anyway. Perhaps the awareness subsides the emotion before it takes off.

·         Stage-3: Like Dimitry, you catch yourself in the state (say anger) after some time. It could be a few minutes or as much as a week after you enter into the state. This is when most of us become aware of our emotional state.

For example, the last time I got angry was when I was standing in a payment queue at Adiga restaurant on M G Road and one person just barged in and went directly to the counter. I got angry and told him to stand in the queue. He did. And within a minute I became aware of my anger and it subsided 10-15 minutes later. It was a stage-3 observation i.e. catching myself in angry state. Could it be in stage-2 next time? Let’s see.

I see following challenge in extending this experiment. It may work for extreme emotions such as frustration or anger. Could it also work for low-intensity emotions such as anxiety? How easy will it be to catch yourself getting anxious? I don’t know. Any ideas?

Source: Primary source for this reflection is Eckhart’s interview by Oprah Winfrey on chapter 4 of Eckhart’s book “A New Earth”. Dimtry’s question starts at 53:10. A similar question was asked by Dionne from Port of Spain, Trinidad at 44:06. Unfortunately, the video is no longer available online.

Eckhart describes this experiment in the following video "Dealing with anger, resistance and pessimism" (7:15)

5 ways of framing a challenge

How you frame a challenge makes a big difference in the kind of solutions you generate. “How do we reach more people in Hong Kong?” is how suit-maker Sammy Kotwani might have framed his challenge. Instead Sammy asked, “Which place on earth needs suits all year round?” One of the answers was Moscow where Sammy ended up moving his business. Today he boasts of many Russian ministers as his customers. How many ways can you frame a challenge? In this article, let’s look at 5 ways.

Min-Max: Any retail shop, be it a bank or a grocery shop, has to manage queues. One way the shopkeeper may frame his challenge is, “How might we minimize the waiting time in the queue?” This is a min-max way of framing. You minimize or maximize a parameter. When James Watt got a model of the Newcomen engine, he asked, “How can we minimize the steam getting wasted in this engine?” Any TV channel would be asking, “How do we maximize the viewership of this channel?” Before starting the Adhaar project, Indian Government asked, “How do we minimize the leakage to the $60-$80 billion subsidy?”

Emotional experience: Instead of minimizing the waiting time in the queue, a retail bank may ask, “How do we improve the experience of being served?” The solution may not only focus on the interaction while being serviced but also how you get entertained while waiting in the queue. Also, it might create a queueless solution. Similarly you may ask, "How do we make commute more fun?" Steve Jobs might have asked, “How do we build products which are so intuitive that users don’t need a user manual?”

Before-during-after: Some challenges involve critical events. For example, attacks in ATMs while withdrawing cash. One way to pose such a challenge is, “What can we do before, during and after an ATM attack in order to reduce the tragic impact?”  You can substitute “ATM attack” by “marriage breakup” or “road accident”.

Culture-sensitive framing: Jaipur foot is a low-cost prosthetic leg. However, the user with Jaipur foot is able to squat, a feature that may not be available with more expensive products. That is because many toilets in rural India require you to squat and hence the requirement is built into the design of Jaipur foot from the beginning. Indians have a tendency to jump into a queue. Hence, you may frame a challenge as, “How do we prevent (or dissuade) people from jumping into a queue?” Like you have regional or country-specific cultural norms, you also have cultures associated with sports (soccer, cricket), professions (engineers, musicians). Your challenge may take into account these norms.

Metaphor: Dr. Venkataswamy, the founder of Aravind Eye Hospital, asked, “How can we perform cataract surgeries more like McDonalds?” Metaphors are perhaps the most powerful and fundamental elements in creative framing. Newton might have asked, “Is a falling apple more like the moon?” Though not a successful innovation, Tata Nano has become a metaphor which people use in asking, “How do we build a Nano in our sector?” In metaphor-framing, you take two seemingly different concepts X and Y and ask, “Why can’t X be more like Y?”

Three myths of innovation

My first attempt at video blogging in collaboration with our son Kabir. The three myths are explained further in the Introduction chapter of our book "8 steps to innovation" available free from here.

Book review: “Strangers to ourselves” by Timothy Wilson

“We take in 11,000,000 pieces of information a second, but can process only 40 of them consciously” – so what happens to the remaining 11 million minus 40 pieces? Well, they are processed by the unconscious mind. And we are not even aware of the filtering, selection and judgements happening within our mind all the time. This invisible entity – Adaptive unconscious – is the hero of the book “Strangers to ourselves: Discovering the adaptive unconscious” by Timothy Wilson. If you have read Daniel Kahneman’s “Thinking, fast and slow” then you are familiar with the hero already (Kahneman calls it system-1). However, I still enjoyed reading “Strangers to ourselves” because of its lucid style and fresh narratives.

The two core questions the book explores are: (1) Why is it that people often don’t know themselves very well? and; (2) How can they increase their self-knowledge? I feel that the book does a good job of answering these questions, particularly question-1.

When we returned to India in 1998 after a seven year stay in the US, it was customary to be asked, “Why did you come back?” I soon realized that my answers are not consistent and varied depending upon the situation, mood etc. When I asked myself this question, I realized that I didn’t know the real answer. Thanks to this book, I now know that it is not that uncommon to not know the reason behind your behaviour/action. The unconscious (intuition) takes the decision, the conscious (rational) mind creates stories that justifies the decision – which are sometimes not consistent. Jonathan Haidt calls this “The emotional dog and its rational tail” (see Haidt’s interview).

The main reason why we don’t know ourselves very well is that much of what we want to know about ourselves resides outside of conscious awareness.  So who is really in control of our life anyway – conscious mind or the unconscious mind? Consciousness as the CEO metaphor says that consciousness is in charge of major decisions and the unconscious mind reports to it. On the other extreme, consciousness is treated more like a child who “plays” a video game at an arcade without putting any money into it. He moves the controls unaware that he is seeing the demo program that is independent of his actions. The truth lies somewhere in between. The unconscious mind scans the environment quickly and detects patterns especially those that might pose a danger. The conscious mind provides a check-and-balance to speed and efficiency of the unconscious and plans about the future.

What is the implication? Let’s take the example of sexual aggression – a topic of attention in India due to several reports of rapes in the last few years. Wilson says that men likely to engage in sexual aggression are unaware that they have a nonconscious association between sex and power and unaware that this association is triggered automatically. This lack of awareness makes it more difficult to prevent sexual aggression.

Wilson gives an interesting example of how a real estate agent finds out the kind of house her clients want. When she meets with her clients for the first time, she listens patiently as they describe their preferences, nodding her sympathetically. Many people have a long list of things they would have prepared before they visit the agent. Then the agent ignores everything the clients just said. And she takes them to a wide variety of houses including type of houses which her clients told them they would never consider. On these initial visits she observes the clients’ emotional reaction. Based on that she infers what her clients really like.

What is the best use of consciousness? According to Wilson, perhaps the best use of consciousness is to put ourselves in situations in which our adaptive unconscious can work smoothly. Could this be the task carried out by my conscious mind when we returned to India? I don’t know.

Related article:

Thinking, fast and slow: A landmark book in intuitive thinking and decision making, my book review, Feb 22, 2012.