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Innovation

Innovation’s Valley of Death

December 20, 2022 By Nagesh Belludi Leave a Comment

Bombardier's CSeries Commercialization Failure: The Innovation Valley of Death The discovery and development of an invention are usually easier relative to the creativity and resources required to make it a commercial success. Indeed, many entrepreneurs and intrapreneurs struggle to commercialize their idea meaningfully—establish the idea’s marketability to prospective backers, engage potential customers, and price and promote their product or service for a favorable return on investment. Consider this case study of the Bombardier CSeries jets—fated for misfortune for many years only to morph into the successful Airbus A220 series:

As a country, we habitually underinvest in R&D. And, when domestic champions like Bombardier do emerge, they often prove unable to turn their great ideas into commercially successful, globally dominant businesses.

In a knowledge economy, a country’s future prosperity is increasingly tied to its ability to generate and capitalize on innovative new ideas.

“The paradox is that while there is innovation going on in Canada, we do not observe the same level of commercialization and ownership of those innovations [as in other countries]. In many cases, inventions developed in Canada are then commercialized by foreign companies that keep much of that benefit.”

Idea for Impact: Don’t let your idea fizzle because they can’t take your sizzle to market. Focus not just on overcoming internal barriers but also on how to commercialize your innovation. Hire outside capabilities if necessary.

Wondering what to read next?

  1. Fall in Love with the Problem, Not the Solution
  2. The #1 Clue to Disruptive Business Opportunity
  3. Your Product May Be Excellent, But Is There A Market For It?
  4. Evolution, Not Revolution
  5. Constraints Inspire Creativity: How IKEA Started the “Flatpack Revolution”

Filed Under: Mental Models, The Great Innovators Tagged With: Aviation, Creativity, Entrepreneurs, Innovation, Persuasion, Problem Solving

The Creativity of the Unfinished

December 8, 2022 By Nagesh Belludi Leave a Comment

Bull's Head, 1942 by Pablo Picasso Don’t dot every I and cross every T. Leave a stone unturned.

Ignore a rule. Don’t tie up every loose end.

Leave some questions unanswered. Let something be out of place.

Violate the expectation and usher a realm of potentiality. As American artist Julia Cameron noted in her seminal self-help book The Artist’s Way: A Spiritual Path to Higher Creativity (1992,) “Art needs time to incubate, to sprawl a little, to be ungainly and misshapen and finally emerge as itself. The ego hates this fact. The ego wants instant gratification and the addictive hit of an acknowledged win.”

A piece of art, a movie, a melodic line, or a production all tend to be more captivating when they leave you wondering—when they urge you to explore the possibilities your mind has to offer.

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  2. You Can’t Develop Solutions Unless You Realize You Got Problems: Problem Finding is an Undervalued Skill
  3. Finding Potential Problems & Risk Analysis: A Case Study on ‘The Three Faces of Eve’
  4. Turning a Minus Into a Plus … Constraints are Catalysts for Innovation
  5. Constraints Inspire Creativity: How IKEA Started the “Flatpack Revolution”

Filed Under: Mental Models, Sharpening Your Skills Tagged With: Artists, Clutter, Creativity, Critical Thinking, Innovation, Mental Models, Thought Process

3 Ways to … Manage for Creativity

October 21, 2022 By Nagesh Belludi Leave a Comment

How to Manage for Creativity Managers can create the conditions for innovation by encouraging a culture of being creative—not just productive—and razing barriers that stifle individual expression.

  1. Get less formal. Foster a culture characterized by a tolerance for failure and a willingness to experiment. Involve everyone and welcome great ideas from everywhere. Make sure everyone feels free to speak out: people will own solutions if they’ve been involved in the decision-making.
  2. Simplify the workplace. Look at things with a fresh eye, as an outsider might—sometimes you’re too close to things to see the truth. Drop unnecessary work, and explore what routines can be phased out or improved. Work with coworkers to eliminate extraneous loops and redundancies if your organization has far too many rules, approvals, and forms. Streamline decision-making.
  3. Defy tradition. If no one can recall why your team does something a particular way, the task is likely more convoluted than it needs to be. Hold a ‘why do we do it that way?’ challenge. Invite colleagues from different teams to come in and look at things in a detached way. Figure out what’s relevant and necessary (and what’s not) and frequently reevaluate the priority list as new things are added.

Idea for Impact: Managing for creativity is a conscious effort in experimentation.

Wondering what to read next?

  1. Overcoming Personal Constraints is a Key to Success
  2. Creativity—It Takes a Village: A Case Study of the 3M Post-it Note
  3. Many Creative People Think They Can Invent Best Working Solo
  4. Four Ideas for Business Improvement Ideas
  5. Evolution, Not Revolution

Filed Under: Mental Models, The Great Innovators Tagged With: Creativity, Critical Thinking, Innovation, Problem Solving, Teams, Thought Process

Books in Brief: ‘Flying Blind’ and the Crisis at Boeing

September 24, 2022 By Nagesh Belludi Leave a Comment

'Boeing Flying Blind' by Peter Robison (ISBN 0385546491) Bloomberg investigative journalist Peter Robison’s thoroughly researched Flying Blind: The 737 MAX Tragedy and the Fall of Boeing (2022) offers noteworthy lessons about corporate responsibility and leadership problem-solving.

In a nutshell, starting in the late 1990s, Boeing shifted from a company run by engineers who emphasized product integrity to one run by MBA-types who prized shareholder value over long-term product planning. Inspired by General Electric’s Jack Welch, the company embraced cost-cutting, outsourcing, financial engineering, union-busting, and co-opting regulators. These miscalculated strategies culminated in the 737 MAX disasters and disgraceful corporate responses.

Recommendation: Read Peter Robison’s Flying Blind, but be wary of the author’s broad-brush political biases, which, I found, sidetracked from the storyline. The internal organizational tensions that led to corporate deception and the fateful consequences of federal regulators’ consigning design approvals to Boeing are particularly interesting.

Key Takeaway: Negligent engineering to minimize costs and adhere to a delivery schedule is a symptom of ethical blight.

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  3. This is Not Responsible Leadership: Boeing’s CEO Blames Predecessor
  4. Book Summary: Jack Welch, ‘The’ Man Who Broke Capitalism?
  5. Dear Customer, Speak Early and Have it Your Way!

Filed Under: Business Stories, Leadership, The Great Innovators Tagged With: Aviation, Ethics, Governance, Innovation, Integrity, Jack Welch, Leadership Lessons, Problem Solving

Dear Customer, Speak Early and Have it Your Way!

September 12, 2022 By Nagesh Belludi Leave a Comment

Development of the Boeing 777 Program: 'Working Together' Initiative

At the heart of every successful product is the ability to address a real need or circumstance of struggle—a “job to be done”—in consumers’ lives. Identification of this “job” happens early in the innovation process, as it forms the core insight around innovation development and execution.

Feedback-Influenced Design is a Key Point of Differentiation

Long before its current mess, Boeing was once the pioneer in aspects of product development. No example illustrates Boeing’s inventive stills than the groundbreaking Boeing 777 program, particularly in its use of iterative, paperless computer-aided design, assembly process-planning, and agile product development. Not only that, the Boeing 777 program offers the most high-profile examples of companies tapping consumers as never before to help them create new products.

Knowing very well that the secret to long-term success starts very early in the innovation process, director of engineering Alan Mulally led a “working together” initiative to organize product development around customer input. (Mulally left Boeing after not being named CEO in 2006 and engineered a dramatic turnaround at Ford Motor Co.)

Alan Mulally: Boeing 777 Program's Director of Engineering and Later Vice-president and General Manager

Concept Testing at Every Stage of Development

In the late 1980s, just as the 777 program was being launched, Mulally made a consequential decision to involve its major potential customers in the development of the aircraft specifications. Mulally made up a “gang of eight” comprising All Nippon Airways, American Airlines, British Airways, Cathay Pacific, Delta Air Lines, Japan Airlines, Qantas, and United Airlines. At the group’s first meeting in January 1990, Mulally’s team distributed a 23-page questionnaire asking what each customer wanted in the design. Within two months, Boeing and the airlines decided on a basic design configuration.

The “working together” initiative was a radical departure from the bureaucratic project organization. Internally, Boeing had become bureaucratic and department-focused. Specialists in various departments would design their parts. Then, it was up to the manufacturing team (the system integrators) to figure out how to make it all come together. It was a “throw-it-over-the-wall” environment where the disconnect was a persistent problem.

Having customer input implied that development was centered on customer needs. This would also tear down the walls between departments—designers, suppliers, and assemblers usually separated by organizations or development phases would now be engaged collaboratively and talking and collaborating in real-time.

Boeing and the In an industry where manufacturers classically designed aircraft with only token customer input. Rather than presenting the market with what Boeing perceived as their idea of what was required, customers had direct input. Over the decades, the Boeing 777 became one of the world’s most successful commercial aircraft and continues to be the workhorse of many a customer fleet.

Idea for Impact: Create Something People Want

Whether selling products or services, fast food, or experiential travel, the most innovative companies organize their offerings around customers’ needs. From the very beginning, they tap consumers as never before to help them create new products, and they’re embedding customer knowledge into the business. Early and frequent feedback is one way to cope with the pressure for shorter product cycles and to be prudent about not investing time and resources in unpromising ideas. It also augurs well for the experiences-over-possessions shift in consumer values.

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  1. The Loss Aversion Mental Model: A Case Study on Why People Think Spirit is a Horrible Airline
  2. Your Product May Be Excellent, But Is There A Market For It?
  3. Innovation’s Valley of Death
  4. Turning a Minus Into a Plus … Constraints are Catalysts for Innovation
  5. Creativity by Imitation: How to Steal Others’ Ideas and Innovate

Filed Under: Business Stories, Leading Teams, Mental Models, The Great Innovators Tagged With: Aviation, Creativity, Innovation, Leadership Lessons, Marketing, Mental Models

The Loss Aversion Mental Model: A Case Study on Why People Think Spirit is a Horrible Airline

August 11, 2022 By Nagesh Belludi 1 Comment

Why People Think Spirit is a Horrible Airline---Loss Aversion Mental Model

When Spirit Airlines pivoted to competing on price in the late 2000s, it quickly gained a reputation not only for operational inefficiencies but also for its in-your-face, take-it-or-leave attitude towards customer service.

Where other airlines charged by-the-package fares for the flight experience, Spirit pared back service and introduced an a la carte pricing model. Charging for the “ancillaries”—i.e., everything optional, including water—allowed Spirit to keep ticket prices down and appeal to price-sensitive travelers willing to sacrifice the usual amenities for a lower ticket price.

In the ensuing years, the unconventionality of this business model did not go down well with customers. Much of the flying public’s frustration with Spirit had to do with Loss Aversion. That’s the notion that the emotional disappointment of a loss is more extreme than the joy of a comparable gain. If finding a cheaper fare on Spirit felt delightful, giving up some—or all—of the savings to purchase ancillaries and surrender the savings felt utterly miserable.

Passengers felt ripped off by these seemingly hidden fees, especially when the true cost of flying Spirit ended up greater than what the initial ticket price led them to believe.

Spirit 101---Spirit Airlines Perception Problem Spirit became quickly convinced that there was a perception problem—its customers didn’t fully understand how its fares work. Particularly, first-time customers blindly presumed that Spirit Airlines works the same way as other airlines. In reality, there were no hidden or excessive fees, and passengers could only pay for what they need or want. In 2014, the airline introduced its “Spirit 101” campaign to educate customers and alter their perceptions. With time and the increased adaptation of the “Basic Fare” model and curtailed customer service by every other airline, passengers’ expectations have since been right-sized. Spirit Airlines has come a long way, and its customer service has improved vastly.

Further studies on loss aversion have shown that a cascade of successive fees is worse than the cumulative: i.e., three ancillary fees that add up to, say, $70, feel a lot worse than a single $70 fee. Appropriately, Spirit offers a “Bundle it Combo” package.

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  2. Make ‘Em Thirsty; or, Master of the Art of the Pitch
  3. Why Investors Keep Backing Unprofitable Business Models
  4. How Stress Impairs Your Problem-Solving Capabilities: Case Study of TransAsia Flight 235
  5. A Sense of Urgency

Filed Under: Business Stories, Mental Models Tagged With: Aviation, Biases, Customer Service, Decision-Making, Emotions, Entrepreneurs, Innovation, Marketing, Mental Models, Parables, Persuasion, Psychology, Strategy

Evolution, Not Revolution

August 1, 2022 By Nagesh Belludi Leave a Comment

Innovation often transpires from synthesizing existing ideas in new ways, as the following case study on the iPod will illuminate.

Steve Jobs introduces the iPod---Innovation is Evolution Not Revolution In some sense, the iPod wasn’t a breakthrough innovation at all. It emerged from Steve Jobs’s “digital hub” approach to integrating iMac software for playing, editing, and managing photos, music, and movies. According to Walter Isaacson’s masterful biography of Steve Jobs (2011,) when Apple designers learned that Toshiba had newly prototyped a tiny 1.8-inch hard drive that could hold five gigabytes of storage (that’s about a thousand songs,) they conjured up a digital music player. Apple found that existing gadgets were “big and clunky or small and useless” with “unbelievably awful” user interfaces.

Sony’s Walkman had previously proven the market potential of portable audio players, having sold 200 million units in the two decades before Apple conceived the iPod. Napster had offered digital audio file distribution for over five years. Finger-driven touchscreens were pioneered in the 1960s, and Citibank rolled out touchscreen ATMs in the 1980s. (Apple didn’t offer touchscreens until 2007 with the iPhone.) Hence, the iPod’s innovation was in bringing all these capabilities together in a way that was easier to use and relevant to the consumer. Dartmouth’s strategy professor Ron Adner writes in The Wide Lens: What Successful Innovators See That Others Miss (2013.)

Apple was three years late [behind Creative, SanDisk, Sony, and Samsung, who had previously launched portable music players]. As we’ll see again in the case of the iPhone, Jobs tended to be late for everything because he wanted everything to be ready for him. Reflecting on catching technology waves in 2008, he said, “Things happen fairly slowly, you know. They do. These waves of technology, you can see them way before they happen, and you just have to choose wisely which ones you’re going to surf. If you choose unwisely, then you can waste a lot of energy, but if you choose wisely, it actually unfolds fairly slowly. It takes years.” Jobs’s discipline paid off.

Idea for Impact: Innovation often builds on existing technological competencies or as a synthesis of smaller innovations.

Wondering what to read next?

  1. Constraints Inspire Creativity: How IKEA Started the “Flatpack Revolution”
  2. The Myth of the First-Mover Advantage
  3. Innovation’s Valley of Death
  4. Fall in Love with the Problem, Not the Solution
  5. 3 Ways to … Manage for Creativity

Filed Under: Business Stories, Mental Models, The Great Innovators Tagged With: Apple, Creativity, Critical Thinking, Entrepreneurs, Innovation, Problem Solving, Steve Jobs

Why Investors Keep Backing Unprofitable Business Models

July 29, 2022 By Nagesh Belludi Leave a Comment

Why Investors Keep Backing Unprofitable Business Models Investors have heaped billions into Q-Commerce—especially the rapid grocery startups—hoping to hook consumers on the convenience of groceries that would turn up immediately, sometimes in minutes.

I’ve never really fathomed how the small-basket orders of low-margin groceries can endlessly compensate for the labor costs and overheads, even after discontinuing the generous referral bonuses, discount codes, and freebies enticing customers. The prospects may evolve if these startups subsist on ever more funding and develop massive businesses with efficiencies from scale. But then they’re right in Amazon’s wheelhouse.

Idea for Impact: Some business models are never created to be profitable, and investors should be wary of encouraging—and funding—loss-making propositions. The lure of backing an initial entrant, capturing market share, and then selling out to a more determined fool isn’t viable! Who needs goods delivered in such a rush for such charges, anyway?

Wondering what to read next?

  1. The Loss Aversion Mental Model: A Case Study on Why People Think Spirit is a Horrible Airline
  2. Your Product May Be Excellent, But Is There A Market For It?
  3. The Myth of the First-Mover Advantage
  4. A Real Lesson from the Downfall of Theranos: Silo Mentality
  5. Innovation’s Valley of Death

Filed Under: Business Stories, The Great Innovators Tagged With: Entrepreneurs, Ethics, Innovation, Marketing, Persuasion, Strategy, Thought Process

Fall in Love with the Problem, Not the Solution

March 25, 2022 By Nagesh Belludi Leave a Comment

Fall in Love with the Problem, Not the Solution Entrepreneurs, don’t get so excited talking about your solution that you forget to emphasize how it solves a problem at all.

Which problem are you solving for the user? What pain-point are you alleviating? Why is your solution relevant to your customers? How will it make their life easier, faster, and cheaper?

After all, every great company starts by solving a painful problem. Focus more on that problem when you’re selling. Not only will this persuade your investors and customers, but it also rallies your team around a shared understanding of the problem and prepares you to ask for the level of resources it should receive.

Idea for Impact: Sell the problem first, not your idea. Often, jumping too quickly to a solution makes you lose sight of the nuances of the problem.

Wondering what to read next?

  1. The #1 Clue to Disruptive Business Opportunity
  2. Innovation’s Valley of Death
  3. Make ‘Em Thirsty; or, Master of the Art of the Pitch
  4. Constraints Inspire Creativity: How IKEA Started the “Flatpack Revolution”
  5. Creativity & Innovation: The Opportunities in Customer Pain Points

Filed Under: Mental Models, The Great Innovators Tagged With: Creativity, Entrepreneurs, Innovation, Persuasion, Problem Solving, Thinking Tools

Ideas Evolve While Working on Something Unrelated

March 10, 2022 By Nagesh Belludi Leave a Comment

In the ’90s, Japanese conglomerate Hitachi, through its subsidy Hitachi-Omron Terminal Solutions, introduced the Clean ATM, which cleaned the bank notes during transactions. The Baltimore Sun (11-Dec-1996) notes,

Hitachi has turned its talents to money-laundering of a literal kind, with an automated teller machine that sterilizes and irons yen notes before dispensing them.

Hitachi did not set out to sanitize the money; its engineers were trying to solve the problem of crumpled bills, which tended to jam machines, a company spokesman says. They solved the problem by running the bills through rollers heated to 392 degrees [Fahrenheit, 200 degrees Celsius]—any hotter would singe paper money—and discovered that the process also killed bacteria.

Idea for Impact: Serendipity is central to the creative process. Many ideas evolve when you’re working on something unrelated. Always be ready to discover what you’re not looking for.

Wondering what to read next?

  1. Always Be Ready to Discover What You’re Not Looking For
  2. Constraints Inspire Creativity: How IKEA Started the “Flatpack Revolution”
  3. The #1 Clue to Disruptive Business Opportunity
  4. Creativity & Innovation: The Opportunities in Customer Pain Points
  5. You Can’t Develop Solutions Unless You Realize You Got Problems: Problem Finding is an Undervalued Skill

Filed Under: Business Stories, Mental Models, Sharpening Your Skills, The Great Innovators Tagged With: Creativity, Innovation, Luck, Problem Solving, Thinking Tools

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About: Nagesh Belludi [hire] is a St. Petersburg, Florida-based freethinker, investor, and leadership coach. He specializes in helping executives and companies ensure that the overall quality of their decision-making benefits isn’t compromised by a lack of a big-picture understanding.

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Unless otherwise stated in the individual document, the works above are © Nagesh Belludi under a Creative Commons BY-NC-ND license. You may quote, copy and share them freely, as long as you link back to RightAttitudes.com, don't make money with them, and don't modify the content. Enjoy!