Perspectives on innovation

Here is an essay on innovation that I wrote a while ago. It still sounds reasonable to me, so maybe it is time to share it.

Today, no company, government or society can survive without both strong managers and leaders. Peter Drucker has shown us that management can transform society in a way that doesn't neglect individuals or put their strengths on the assembly line. His ideas are decades later both strikingly valid and practical, which is patent of visionary thinkers. He looked relentlessly for the truth, abstracting the right from the trendy and quick, and presenting it clearly to everyone. Prof. Drucker not only discussed individual topics, but illustrated how they relate to each other to form a system. Part of the value of his work is that we still can't fully decode the richness of these connections and their meaning, because of their immensity. If we reread his words, we'll often discover previously unidentified perspectives.

Finding innovative ideas has a lot to do with uncommon perspectives that were result of our conscious exposition to sense-stimulating experiences and the identification of a small problem in our domain that noone tackled before. An idea has a greater chance to succeed if its execution is even more distinctive, which requires from us to find a way to integrate our uniqueness into the problem, while not becoming part of it. In order to understand it better, we need to be able to live with it for extended periods of time and again seek the truth if we want to ferment the right solution. Solving small problems allows us to validate our ideas quickly through actively seeking constructive feedback. If the solution of the current problem can support the next opportunity, leading to a chain of sustainable events, we could allow ourselves to gradually increase the problem scope in relation to our abilities, while removing obstacles to our motivation. Working on the current problem without keeping future possibilities in perspective can hurt us more than we think.

“Seeking the truth” means that entrepreneurs have to become scientists, make experiments and act according to the insights they get from the data. It doesn't necessarily have to be “big”, but representative for the concrete use case. Innovators need to concentrate on developing working concepts, not just a single idea that will be easily copied, and too much data details can get in the way of that. Innovators are the engineers of their own products, so they need to be able to explain and defend their decisions in front of an audience of “fierce” stakeholders that they seek to include. If a solution can't be defended from 360 degrees or if people can easily find exceptions or contradictions in it, then it's better to stop it before it reaches the market and increases the cost of failure. If engineering is about the inside of a product, then design determines the outside, giving the first impression of this product. We still remember how Steve Jobs' father taught his son to paint not only the visible side of the fence well, but also the invisible. We see that people are ready to pay a lot more for beautiful products that reveal their belonging to a particular community or lifestyle. Design is the element that can inspire and motivate action in many innovators. They could use its psychology to influence buying decisions and raise awareness for their products not through costly marketing campaigns, but simply through making the products speak for themselves. Advertising can't fix a product that doesn't already spread virally. But philosophies that involve the intersection of multiple disciplines (e.g. STEM) can't be a prescription for innovators, because no two inventions are alike. What seems more important is to develop the ability to look at everything as a system and identify the various touchpoints that influence the customer behavior through lifetime. Many companies are so busy following their customers from the time they wake up to when they fall asleep, that they fail to recognize the adverse impact of tracking on the perception of their products. And in order to be sold, a product needs to have a good acceptance. The use of comprehensive statistics packages for data analysis can't compensate for the lack of personal touch with people. Showing sincere interest and empathetic listening of the details around the customer pain on a per-case basis can't be replaced by technology. But our understanding of the issues must not cause the customers to leave.

Innovation is largely dependent on communities of like-minded people who have a healthy disrespect for the status quo. Having many innovators in one place creates a strong network effect or synergy that allows them to progress much faster, when they hold each other accountable at every step. What successful entrepreneurs have already done becomes then a source of inspiration for the people who are striving to get there, and their drive and motivation leads to a positive cycle of influence touching everyone. It's much harder for single entrepreneurs to keep themselves motivated when they have no support or can't find role models around them. Having a community of entrepreneurs doesn't mean that they should spent all of their time together, when this can be counterproductive. The community is meant to be a catalyst and regulator, not a step-by-step user manual. Different communities have different problems and in turn seek different solutions. This is why an innovation in one country will be hard to understand in another, where the same problems are missing. For instance, in my own country—Bulgaria—I feel that most places and events are quite expensive relative to the average monthly income. As a result, people don't have enough opportunities to communicate outside their workplace, which in turn diminishes the trust between them. They tend to rarely communicate outside their close circle of friends, which can be very limiting. There needs to be an easy way to meet new people in nature and discuss a variety of themes without being worried about disproportional expenses. But a solution to such a problem might be hard to imagine for a citizen of another country that can choose to go to a variety of meetups.

Similarly to how a person's education doesn't depend just on the knowledge gathered in educational institutions, but on what one learns in the much longer after-graduation period, we can say that ideas generated in inspirational moments can only give us traction, but whether we sustain the momentum will depend on our own mindset during the much longer periods when tend to return to our equilibrium position. Specific mindset is the distinctive advantage of entrepreneurs, artists, designers, scientists and if we want to become like them, we can't just copy their thoughts if we don't know what caused them. We have to seek our own causes to invent ourselves out of our ordinary thinking and to tame our emotions until the gain of doing overpowers the pain of procrastination.

Crowdsourcing, or funding a project through other people's money, can be tempting for a creator, but it can lead to a vicious spiral in which he seeks higher and higher funding. By participating in a numbers game, he becomes dependent on the platform and is left at the mercy of others to enable him, instead of finding his own way to do it anyway. By funding an idea this way, backers take ownership of some form, no matter how the platform advertises it. And it can be a potential problem if it's not clear in advance what will happen not just at the beginning of the project, but in case it reaches an audience of millions years later. The small initial interest can soon become a huge legal burden. Makers are happiest when they create and for that they don't need to organize a loud party where everyone's invited. We can't expect work to be done at parties; it is individuals that work in distraction-free environments that allow them to create the positive change they want to see in the world, and money is rarely their main motivation. Crowdsourcing platforms can be good for promoting social change on a many-to-many level and in a variety of sectors, but it's still not how they are used today, because that would threaten their business model. Platforms like Coursera, Udacity and edX already show us what the future of education could look like. Hawaii.gov shows that more governments will try to keep up with the latest advancements in technology and design. And Up Global highlights the trend towards more collaboration between entrepreneurial organizations to fully reveal the treasure of human potential.

Innovators must constantly keep their thinking fresh to remain competitive, but this alone is hard enough, since the speed of their individual advancement will always be slower than the speed of the collective change in their sector. This means that they have to be highly selective in what they do, how they do it, when they do it and who they do it with. Choosing a specific niche can be a double-edged sword, since it's limiting and there's still no guarantee that the product will be successful.

It helps when innovators think that they are creating art, even if the course to getting there will be expensive. If they don't truly love their work, they won't be happy and the people who depend on them will not only see it through, but also pick up part of their emotion. They have to create only things people want or they won't be able to sell them, which in turn will destruct their art. The act of creation itself shouldn't lead to mental or physical death, even in the greatest moments of despair, because there is something positive to be found in every situation, maybe even when we least expect it. Craftsmen are very thorough in their work, and so need to be inventors too. Every masterpiece is a result of countless hours labour and very often taking shortcuts isn't an option.

There are a lot of creativity techniques that can be applied and companies like IDEO are very good at it. But people won't actively participate in them if they feel that their word doesn't weight. They want to see a safety net or a controlled environment first that makes unfolding their creativity safe. Organizations still need to be better at including everyone in discussions and not just the people who insist to be right. Their managers need to create a culture of innovation, in which noone is punished both for trying something new/unconventional and for failing at expected deliverables. Internal structure could exist only to the extent to which it will support efforts and not dominate them. Moreover, an environment of open sharing of the lessons learned from failures can help to avoid repeating them in the future, while at the same time bringing team members closer together.

Innovations need to be based on many legs, so that their posture isn't threatened by one or more legs not holding. This is very similar to the need for an entrepreneur to not have only plan A, but plan B, C etc. Such high flexibility is paramount, because it's rarely that innovations will remain in their initial form without undergoing changes, especially when innovators themselves don't know at the very beginning what they are doing. Before the beauty of a flower can be evaluated, it needs to have taken roots. But compared to the number of flowers, we have relatively few innovations, so that they often get evaluated at a very early stage, before they had the chance to take roots. In a sense, we are plowing up the whole soil every week, just to see how the small seed is doing. And this has implications for all seeds that haven't found their soil yet. We can't allow ourselves to kill creativity so early; we only need to remember that a seed has the most substances and hidden energy when in a germinated condition.

An organism that doesn't grow, actually shrinks. So, when innovators create, they should exhibit a growth mindset or their creations, no matter how successful initially, will start to shrink and fall into oblivion. Showing up regularly to provoke interest in a creation that is in danger of being forgotten can be just as important as improving it in the garage. We see that big companies do it regularly, because they know that what is out of mind will be out of sight too. If most people don't know about the existence of a creation, it will fail, becoming a sunk cost. It is very often that innovators continue working on such products, because their ego refuses to admit failure. It becomes much harder to let go of the long-term emotional investment in that product than it is to just start working on a new one. Just the raw power of emotions is enough to guide us in the wrong direction, so we must be aware of it.

No single product of the innovator's portfolio is judged by itself; it's the combination of products that people see and evaluate. This combination needs to be consistent and cohesive, so that no product is seen as an outlier. It also needs to reflect the (unchangeable) values and the (changeable) beliefs of the creator. If people notice that he acts against these values and beliefs, they will withdraw their support for him and the success of future products will be much harder to achieve. The values can be used as a compass of what to do next, so it can be valuable to formulate them on paper and adhere to them during the execution process. But thinking has to precede acting or we'll have to face the consequences.

Decomposition of existing products allows entrepreneurs to learn how they were built, which can be valuable. But this doesn't seem to work with products, whose complexity can quickly overwhelm a single person. Then the initial interest in the details can cause the entrepreneur to avoid decomposing products in the future. All that he can do then is take them for granted, but this doesn't help. He can learn about the quality of the parts by comparing them to similar ones he saw in the past, which is a form of pattern matching. It's interesting to see that sometimes the best parts can be found in what people perceive as a mediocre product and sometimes the worse parts can be seen in what people perceive as a perfect product. It all depends on our values, so it's better to never assume anything. Many people try to convince us that there is a best practice or methodology that we can apply in our work, but they probably haven't found a case in which this isn't valid. We shouldn't be in the sector just to expand other people's vocabulary and to make things less comprehensible for the sake of our own goals. Captivating audiences with trendy words is just a marketing trick that will distract every entrepreneur from his own work.

When evaluating products against competitive ones, it helps to think about their distinctive characteristics (e.g. ease of use, aesthetics, character etc.). A great product always has at least one characteristic that doesn't exist in other products or at least isn't so clearly pronounced. After we find out which the 5-6 best characteristics are, we can draw an equalizer on paper with a vertical “slider” for each characteristic and mark the level to which it is valid for both our product and competitive ones. Then, for every product, we can connect with a different color the levels of its sliders. This gives us all profiles in a view that allows for easy comparison. What we now need to look for is higher distinctiveness, expressed through the deviation between the profile lines. This can show us the chance of a product to stand out in the marketplace.

Governments could probably help entrepreneurs by minimizing the administrative burden on them, by making processes more transparent, by asking questions and listening more to entrepreneurial needs, by having entrepreneurs participate in the government, which could allow for better understanding of common day-to-day problems. They could also support entrepreneurial events, which focuses available human resources in one place and minimizes the cost of reach. They could award exceptional entrepreneurs, attracting even more attention. But without the supportive hand of businesses that are themselves closer to the domains that entrepreneurs pursue, change will be harder. Businesses could act as mentors to entrepreneurs, but they still perceive them as potential future competitors. This lack of collaboration leads to statically concentrated power, and in order to create the tension in every party to improve and think bigger, power has to constantly move around. Businesses themselves need to rely heavily on universities to prepare their future employees for the challenges they will face. But they also need to invest more in their education if they want to retain them and develop them into people who will be interested in solving the problems of the society and not just caring about the company's bottom line. One of my teachers said: “The best way to teach someone something is to show him that he doesn't know anything.” Still, many companies don't operate this way.

Entrepreneurs need to have faith in their abilities, especially when they will fail many times throughout their lives. We fail only when we give up, when we stop trying. This shows that a single change in our mindset can make or break us, so we have to decide every day, who we want to be. The ability to stand up in any circumstance and help others do so too is an important part of being an entrepreneur. Doing something out of nothing can bring a lot of satisfaction, while changing us from the inside out and bringing back the smile of those around us.

Radoslav Kostadinov

26.05.2013

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