Building Your Own Innovation Engine, with Scott Anthony

Scott Anthony is the author of eight books on innovation, the 2017 winner of the Thinkers50 most influential management thinker, and the Managing Director of Innosight, the innovation consulting firm founded by Clayton Christensen. Scott shares a number of insights in this interview about how to get your company’s own innovation engine up and running in 90 days — and why there’s a business imperative to do so. Just because it can take years to develop a successful innovation capacity, there’s no reason that it has to.

Listen to the Episode

About The Innovation Engine

Since 2014, 3Pillar has published The Innovation Engine, a podcast that sees a wide range of innovation experts come on to discuss topics that include technology, leadership, and company culture. You can download and subscribe to The Innovation Engine on Apple Podcasts. You can also tune in via the podcast’s home on Spotify to listen online, via Android or iOS, or on any device supporting a mobile browser.

 

In listening to this conversation with Scott and considering the core components of the Product Mindset, these key takeaways can ensure your path to innovation is far faster and straighter than most:

Want to Know Your Customer? Try Living With Them.

• Procter & Gamble is one of the companies Scott puts forth as having innovation deeply embedded in their DNA. One way they spur a shared sense of innovation among team members is by having ALL employees spend time with and observe their customers, even living with them in some cases.
• One of the 4 key building blocks of innovation Scott shares is to stay focused on a small subset of what you could actually do. “We always suggest rather than just try hundreds or thousands of flowers, that you zero in and focus your effort,” he says. “People often think that innovation is all about removing constraints, but constraints and creativity are actually very close friends.”

Wave Goodbye to the Zombie Projects

• Many companies think they’re too resource-constrained to commit full-time resources to the pursuit of innovation. Nearly every organization, however, has far more capacity to innovate if they identify and root out “zombie projects” that aren’t driving growth and are draining valuable mindshare and energy.
• Once you root those projects out, it becomes much easier to put a few resources full-time on uncovering opportunities for innovation. Full-time focus for a few individuals is essential if you want to meet the 90-day threshold for standing up your own innovation engine.
• Too many companies fall in love with the fallacy that “20% of personal time for innovation” will result in anything worthwhile. “In most organizations, all you get when you do that is a lot of diffused and distracted efforts,” Scott says.

Innovation=“Something Different That Creates Value”

• Scott’s definition of innovation, “something different that creates value,” may sound vague, but each word was chosen deliberately and carefully. At the end of the day, innovation is a set of activities performed in search of a new way to solve a customer’s problem.
• “Innovation is distinct from creativity, is distinct from invention,” Scott says. “Those are inputs into it, but until you translate that spark into the creation of value, revenue, profits, whatever you’re measuring in your eyes, you have not innovated.”

Show Notes

• Follow Scott Anthony on Twitter
• Read Scott’s columns on the Harvard Business Review
• Visit the Innosight website
• Browse Scott’s books on Amazon

Transcript

Narrator: [0:00:02]
This is the Innovation Engine Podcast. Every Monday, we bring you interviews with some of the world’s leading authorities on innovation.

We talk about company culture, corporate leadership, emerging trends and technologies and more. Coming to you from 3Pillar Global’s headquarters in Fairfax, Virginia, here’s your host, Will Sherlin.

Will Sherlin: [0:00:26]
Welcome back to the Innovation Engine Podcast. On this week’s episode, we’ll be looking at how to build your company’s very own innovation engine: the four component pieces that drive an innovation factory, what the first 90 days of building your innovation engine should look like. And why it’s important to kill zombie projects that drain valuable time and resources.

Here with us today to discuss all that and more is Scott Anthony, Managing Partner at Innosight and author of numerous books and articles on innovation.

Innosight is an innovation and growth consulting firm that works with companies worldwide to develop innovation strategies and skills that promote their long term, sustained growth.

Scott has written a number of books, including The First Mile, a Launch Manual for Getting Great Ideas into the Market, Building a Growth Factory, and The Little Black Book of Innovation.

He speaks often on the topics of innovation and success, having delivered keynote addresses on five different continents. Scott has appeared on Good Morning America and CNBC and is a regular columnist for the Harvard Business Review.

Welcome to the podcast, Scott.

Scott Anthony: [0:01:49]
Thank you very much, Will. Delighted to be here.

Will Sherlin: [0:01:51]
Absolutely. It’s our pleasure hosting you.
Let’s kick things off today talking about the process of innovation because you think it’s something that organizations can be fundamentally taught how to do.

What has your experience at Innosight over the years taught you about the differences between how innovation leaders and laggards approach innovation?

Scott Anthony: [0:02:12]
Well, I think the answer, Will, is in the very question itself, the notion that innovation is not magical, it’s not a mystery, it’s not a black art. But it is a discipline that can be mastered, can be measured, and can be managed.

And that’s the real difference between, you see, between the leaders and the laggards. The laggards, they try to let thousands of flowers bloom and pray that one of them is going to turn into something that is big and exciting, which never works. The laggards might have a single thing they’re working on, and they cross their fingers which is not a very good approach.

The leaders have a degree of rigor that they bring to the problem. They recognize that if they approach it thoughtfully, if they approach it in a careful sort of way, give of course freedom for serendipity and good things to happen, they can get much, much better results.

And I think what is important behind all of this is having the right definition of innovation and having the right tools and mindsets to approach some of the key challenges that you predictably will face.

But with that discipline, with that understanding, we have a very strong belief. And we’ve got evidence, of course, behind this that any organization could get markedly better at driving growth through innovation. It’s just a matter of making the choice to do it.

Will Sherlin: [0:03:24]
And so, you mentioned the definition of innovation and having the right definition of it. What is your definition of innovation?

Scott Anthony: [0:03:31]
At the simplest level, we have a five-word definition. Nothing more complicated than that. We define innovation as “something different that creates value.” It’s short, but each of those words was chosen quite carefully.

Something is intentionally vague. Sometimes we think that innovation is all about the stuff that the scientists do. So, it’s new molecules if we’re a pharmaceutical company, it’s new wired connections if we’re an engineering company, whatever.

But there are lots of different ways to innovate. It might be a new marketing approach. It might be a new revenue model. It might be a different way to organize an internal process.

Innovation isn’t the job of a few people. It’s really the job of everyone. We use “different” instead of “breakthrough” or leap forward, or even better, to remind us that sometimes the innovations that have the biggest impact are the ones that take complicated problems and make them simple or expensive things and make them affordable. This is the hallmark of what our colleague Clayton Christiansen has called disruptive innovation.

The last two words, create value, are by far the most important. Innovation is distinct from creativity, is distinct from invention. Those are inputs into it. But until you translate that spark into the creation of value, revenues, profits, whatever you’re measuring in your eyes, you have not innovated.

Now, I’ll say just one more thing here. That’s a broad definition. Companies that are really good at this recognize that there are different types of innovation and there are lots of different language systems for this.

You might think about core versus adjacent versus white space versus disruptive. You might think about incremental versus radical, sustaining versus great, whatever. Lots of different ways to describe it.

The thing that we urge companies to do is whatever system they want to use, just pick one. Make sure you define those types clearly and make sure everybody understands the different types of innovation.

Because those differences really matter and they impact some of the other systems you might put in place if you’re seeking to be more disciplined in how you manage innovation.

Will Sherlin: [0:05:37]
So, in your book, “Building a Growth Factory,” you propose an alternative approach to innovation within a company called a growth factory. It’s a system with four key components. Can you share what those four components are and which one is the centerpiece?

Scott Anthony: [0:05:54]
Yeah, absolutely. So, the metaphor here is if you’re a modern-day company in a fiercely competitive world where competitive advantage is increasingly transitory and today’s great products and services won’t be tomorrow’s, you need to approach the creation of innovation and the growth that results from it as systematically as a production company approaches the creation of widgets.

So, you need the analogy of a factory that will churn out new growth innovations again and again. So, we have four systems that interlock as the underpinnings of the growth factory.

The first is what we call the growth blueprint. In essence, you’re deciding what exactly does the factory need to produce and how many of it does it need to produce. So, what are your overall growth targets, what are the sources of growth and what’s the rough rhythm that the factory is going to churn out some of that new growth.

You then, like a factory has assembly lines, have production systems where you reliably and routinely gather the raw material of innovation, ideas, and translate those raw ideas into the creation of value.

And if you’re sophisticated about this, you recognize, again, different types of innovations get managed in different ways, given the amount of uncertainty behind them.

You then have governance and control systems. Just like a factory has lots of dials and measures and metrics to make sure that all the machinery is running in order. You’ve got dials and measures and metrics to make sure the right resources are getting to the right places at the right time.

You’ve got systems in place to allocate the human resources, the financial resources, the assets in your organization to make your innovation vision come into a reality.

The final component is what we call leadership talents and culture. Innovation is a distinctly human activity, so having the right leaders doing the right things paired with the right talent in the right enabling environment is absolutely critical.

Now, this really is a system you can’t pick and choose. You need to have all of these things working together. But if there’s one area that we suggest people over index in, it’s the area related to governance and controls.

Because after all, strategy isn’t what you say you do. Strategy is what you actually do. So, the way in which you allocate resources, the way in which you oversee projects, those really are the things that are make or break for how you create your factory.

All of it is important, but that’s the area that requires extra special attention, particularly in large organizations.

Will Sherlin: [0:08:24]
So, Citigroup and Procter and Gamble are two examples of highly successful companies that not only focus heavily on innovation but have also incorporated it into their corporate structures. Why do you believe those two companies are such prime models of growth factory companies?

Scott Anthony: [0:08:42]
Now I’ll say before I answer that every company is imperfect. And certainly, Citi and P&G have their challenges and have their imperfections.

So, we don’t believe there’s anybody out there — and both these companies by the way would completely agree with this statement — we don’t believe there’s anyone out there that has truly cracked this problem at scale.

Yes, you might talk about companies that are still run by charismatic founders, but that’s not really an applicable example to most organizations since they don’t have the degrees of freedom that Jeff Bezos has at Amazon or Reed Hastings has at Netflix or Mark Zuckerberg has at Facebook, or whatever.

So, the reasons why we like P&G and Citi is they’re an interesting set of contrasts. They’re both quite old companies. They very clearly are professionally managed. They don’t have the founding teams around anymore.

P&G has been approaching innovation with a degree of rigor and discipline for decades now. It has tried a lot of things. Some have worked, some haven’t. It really reflects deeply on a lot of thoughtful experimentation around building a true factory for innovation and growth.

Citi’s a little newer to this. Citi would say that innovation was at its core a couple decades ago, it lost it for a period of time. And then a new leadership team about a decade ago made the decision consciously to try to bring it back and drill it through the organization.

So, the fact that both of these companies are old mainstays of the global economy. Yeah, there are different stages in their approach to innovation we thought made an interesting set of contrasts.

And the other thing I would say is both organizations demonstrate what it looks like when you begin to do this at scale, inside a large organization. And despite their flaws, despite their faults, they also highlight that you can do this — that large, professionally run organizations whose core essence is executing and delivering today can also feather in a set of complementary systems and structures to make the discovery and creation of tomorrow more systematic than it historically has been.

So, that’s why we’ve got those two case studies as the backbone of our eBook Building a Growth Factory.

Will Sherlin: [0:10:47]
And let me stick with Procter & Gamble, because they’re a company that you write about often in your recent article for the Harvard Business Review, Build an Innovation Engine in 90 Days. You call them an innovation factory.

So, what does P&G do to manufacturer innovation that other businesses can and should emulate?

Scott Anthony: [0:11:06]
I think there’s a lot of things that P&G does that are generally best or close to best practices that any company can do. So, let me give at least a couple of examples and note this is really complicated stuff. It’s ever changing, so it’s hard to ever get an exact snapshot of it because the world is complex, you’ve got different pieces moving at different paces, etc.

But I think one thing that P&G does very well is they are really precise in their definition of the types of innovations they’re going to introduce. They put it in one of their annual letters to stockholders about seven or eight years ago now declaring that they essentially were going to look at four different sources of growth.

What they call commercial innovation, which is ways to boost existing products without changing the essence of the product. So, new marketing approaches, packaging and so on.

They have incremental sustaining innovations. They call them the -ER innovations that are better, faster, cheaper.

You’ve got the more transformational efforts where they’re still competing in existing categories. But they’re introducing a market new benefit or changing the paradigm of delivery like they did in the laundry category when they introduced Tide Pods, single doses that you could put into your laundry machine.

And then they have what they call disruptive, where you’re really creating new categories, new brands and new business models. So, I think anybody can do this.

The other thing that I think P&G does a really good job of is really investing deeply to have the primary understanding of their consumer that can spur insight for the creation of new innovations.

So, it is a discipline within P&G that everybody follows. Everybody going into the market, everybody working with consumers, shopping with consumers, even living with consumers. Not to ask them what they want, because consumers often have pretty poor language to answer that question, but to develop that empathetic connection so that P&G can understand what the consumer wants, even if the consumer can’t articulate it.

The third thing that I would say that P&G does well is it has quite sophisticated portfolio management systems, which means at any given time, its top leaders can very quickly understand, of the 1000 or so innovation initiatives going on in the organization, who’s working on it? Where is it in the development pipeline? What’s the potential? What’s the next step that’s being taken? So, having that real time ability to get that information helps leaders understand, and then leaders make good choices.

And then the final thing I would say is consistent with this view that innovation is a discipline, P&G invests very heavily in training, recognizing that there are long term benefits to giving broader groups of people the understanding to spot opportunities for innovation, to develop interesting ideas, and to systematically test and remove some of the uncertainties behind them.

As I said, this is complex. There’s a bunch of other pieces as well. But some of the specific things described there are things that I really do believe any organization can emulate.

Will Sherlin: [0:14:06]
OK. And you said in that answer, living with consumers, I believe. Do you mean like literally living with consumers?

Scott Anthony: [0:14:13]
Yeah, there are examples in P&G. And this isn’t, you know, happening — and not every person is doing this every minute of every day obviously. You know, they’ve got day jobs and all that.

But you go back about 15 years ago, when A.G. Lafley started his first reign as the CEO and chairman of the company. One of the challenges he observed is, in his view, the company had really turned inwards.

So, instead of really seeking to understand and interface with consumers, everybody was busy in meetings and looking at their computers and looking at each other and looking at their smartphones. So, what he tried to do is get the organization to turn itself around and really have an external orientation.

Part of this is a program called Live It Work It, where everyone at P&G commits at some point during the year to go into market and to do the things I talked about, to live with, to work with, to shop with consumers. Again, to understand people at a deeper level, their hopes, dreams, frustrations, anxieties and so on.

And there are great stories in P&G’s history about how this has led to insights that people didn’t expect, that sometimes drives the creation of new categories and sometimes leads to everyday ways to improve the way they message and market some of the things they’re already doing.

It’s a really deep and shared commitment and something that I think every organization can learn from.

Will Sherlin: [0:15:30]
OK, nice. So, in the HBR article that I mentioned before, you write about something called a minimum viable innovation system, which you define as the essential building blocks in allowing a company to begin creating an innovation function.

So, you lay out kind of a 90-day timeline for what that should look like and getting something up and running. Can you give listeners an overview of the first 90 days and what companies should be doing during each time boxed phase?

Scott Anthony: [0:15:57]
Absolutely. So, we had one of these ah ha moments probably about 18 months ago where we had described and discussed some of the components of this growth factory and it’s a complicated thing.

And we often have clients say, “That sounds great, I love the destination, but how exactly am I going to get there? That sounds like years,” and to really get there, in fact, is years.

So, as we begin thinking about it and began reflecting on our experience, we realize there is a really good starting point that any organization of any scale can do within a business quarter that doesn’t require making massive investments, doesn’t require additional headcount, can just be done with concerted effort from the top leadership team.

This still is a system, which is why the ending of it is system, but it is the minimum viable innovation system term borrowed from the lean startup movement where people talk about minimum viable products as the good enough version of a product to solve a problem without back end bells and whistles applied to the approach of growth through innovation more systematically.

So, with that slightly overly long preamble, we have four key building blocks of this minimum viable innovation system. The first is really getting crisp in defining what we call your innovation buckets.

What you’re essentially trying to do here is answer the question, what problem does innovation need to solve? How much do we need to grow? What’s our overall growth target? How well positioned are we to hit this target?

So, what’s the equation that innovation then has to plug into? If you go and do this with a degree of rigor, it doesn’t have to be a year-long exercise. Obviously, if you’re doing this in 90 days, it’s about a week to come up with an estimate.

It also helps you understand how far do we have to push, how far do we have to stretch as we begin searching for new and different sources to grow.

The second piece of the puzzle, then, is really, then zeroing in on the specific areas that have the greatest potential for growth. We call these strategic opportunity areas.

These combine together a job or a problem that’s not done well by a group of customers, an idea to go and address that problem, and a sizable enough group of customers that it can make a material dent against your growth gap.

So, we always suggest rather than just try hundreds or thousands of flowers, they’re letting hundreds or thousands of flowers bloom, we always suggest that you zero in and focus your effort.

People often think that innovation is all about removing constraints, but constraints and creativity are actually very close friends.

So, in the second piece of the puzzle you go and pick a couple problems worth solving. And again, you’re not going and doing six months of research to do this. Often, it’s two or three weeks.

We suggest you go out in the field, immerse yourself with a dozen or so customers, bring a group of people back together, scan for what else is going on in your environment, and lock yourself in a room until you pick a couple problems worth solving.

The third thing you then do is make sure that you got people to actually go and work on these things. It doesn’t require an army, but you got to tap one or two people on the shoulder and say, “This is your job. Your job is to take these opportunity areas we’ve developed and actually go and create living, breathing businesses that will tackle it.”

We are very firm in our commitment, in our belief that it’s got to be people who are dedicated to this full time. A lot of organizations get a bit deluded by stories like 3M creating great innovations like the Post It Note in the program they have that allows engineers 15 percent of their time to go and explore new and different things.

If you’re 3M and you’ve got all the systems to make that happen, fine. Wacky idea Wednesday, free thinking Friday, special purpose Sunday, whatever works.

But in most organizations, all you do when you do that is getting a lot of diffused and distracted efforts. So, really make the bold decision to have a couple people go and do this.

The final component is, recognize if you really are driving in different directions, you’re doing things that are new and different to your organization, your systems and structure by definition aren’t set up to support it.

So, create a special purpose mechanism to shepherd some of these ideas. What that usually means is you’ve got a small group of senior leaders, not the entire executive committee, but you’ve got a small group of senior leaders that agree. They’re going to help nurture these ideas as they work through what can sometimes be an implicitly hostile environment.

So, there it is, 90 days to find your buckets, pick problems worth solving, pick a couple resources to go after them and create a mechanism to shepherd the new and different to make sure you realize all the potential of your ideas.

Will Sherlin: [0:20:31]
And you write about two potential roadblocks that can derail a company’s efforts within the first 90 days. Can you share what those likely roadblocks are and how companies can work around them?

Scott Anthony: [0:20:43]
The challenge we see in most cases, well, it really comes down to that third area where you say pick a couple people to go and work on these things is what often happens then as organizations look at us and they say, “Well, it would be great if I had people sitting around not doing anything but number one, I don’t. And number two, even if I have resources, these people aren’t skilled innovators. They’re not people who’ve got lots of experience doing this.”

So, to address the first problem, we suggest that organizations conduct what we call a zombie project amnesty. Now, what the heck does that mean?

We have seen very clear evidence that just about every organization has much more innovation capacity than it realizes once it roots out the zombie projects. The zombie projects are the walking undead.

The projects that, if you are honest about it, will not materially impact any growth gap that you’re trying to close, but still, they shuffle and linger on, sucking the life out of your organization.

Now, there are deeper questions about why zombie projects proliferate. Often, it’s an organization culture where you don’t tolerate commercial failures, so people find ways to keep moving forward even if their ideas had died. That’s a different topic.

But what you do is you say we’re going to have a moment where we come clean, where there are no penalties to self-admitting. You’re working on one of these things. Every organization where we’ve done this has found 10 to 20 percent of its efforts are these things.

And all of a sudden you put them down, not killing the people, just the projects, and you’ve got much more or many resources than you think.

On the second side, saying that we don’t have people who’ve done this before, the promise we make in the article is you don’t have to make external hires to get started. So, how do you square the circle there? So, the idea here is to remember that innovation is a discipline. And because it’s a discipline, you can teach anyone how to do it.

In the article, we lay out what we call the innovators checklist, about a dozen or so things that we’re always looking for when we’re working with the team not to figure out if an idea is good or bad. Ultimately, the market decides that. But to determine if innovators are taking the right steps and following the right behaviors to maximize the speed with which they discover whether their idea is any good.

And since this stuff is codified in a bunch of different places, we in fact created a very simple online tool that’s available at Harvard Business Review online. Anyone can go and pick up this checklist, read key components of the innovation literature, and actually have a really good starting point as they approach these problems.

We described in the article, one of our favorite case studies, an organization in the Philadelphia area called the Settlement Music School, where the executive director, Helen Eaton, committed her organization to do this kind of stuff.

Now, they had never innovated before, and it’s a relatively small not-for-profit organization. Tons of history, more than a hundred years old. But by doing some of the things described in the article, following the checklist, devouring the innovation literature and just investing the time on it, they came up with really cool ideas.

One of them is called Adult Rock Band. Settlement historically taught children music, but Helen wanted to go and reach adults who wanted to recapture their youth, meet new people, and so on.

The idea of Adult Rock Band is you get a half dozen people or so together under the guidance of an expert instructor and they create a band. So, they get together once a week and practice and ultimately give a performance to other people in the community.

It’s a relatively simple idea, but they followed the disciplines of innovation, they identified the insight, they came up with a rough prototype, they tested the idea and they’ve now begun to roll it out across Settlement’s campuses in the Philadelphia area. So, a simple demonstration that anybody can do this stuff.

Will Sherlin: [0:24:21]
OK, nice. So, let me ask you about your most recent book. It’s called The First Mile, A Launch Manual for Getting Great Ideas into the Market. It’s earned praise from the CEO of Box, Aaron Levie, and Clayton Christensen, among many others.

Who’s the audience for the book? And are there one or two anecdotes from it that you found really resonated with the audience?

Scott Anthony: [0:24:43]
So, the primary audience for The First Mile is anybody who’s there. So, what is The First Mile? It’s that moment where you take that plan that you’ve been working on that looks so beautiful on paper. They always do, almost always do, and you breathe life into it.

Maybe you do your first commercial execution. Maybe you go and run your first test. Maybe you go and try and get your first customer, whatever.

One of the lessons that we’ve learned from our own life in The First Mile over the course of the past 15 years, which we spent a lot of time in, whether it’s advising big companies, helping to invest and incubate small companies, or building our own company, is that every idea is the same. Because when you’re at the precipice of The First Mile, the idea that you’re working on is partially right and partially raw.

The challenge that you face is you don’t know which part is which. Now, particularly inside big companies, the trap that we fall into often is we try to answer this problem through research.

So, we go and run focus groups, we talk to a bunch of customers. We go and talk to experts. We go and do financial forecasts, etc. What we’re seeking to do when we do this is to create something that doesn’t exist, the perfect plan.

Anyone who tries to do this learns the timeless lesson taught by the great American philosopher, actor and occasional boxer Mike Tyson, who once said, “Everybody has a plan until they get punched in the face.”

In the first model, what I try to do is to help people take those punches more productively because you’re going to take them. It’s not a question of if, it’s a question of when and what do you do afterwards.

In terms of the anecdotes and stories in the books that I found resonate with people, I’ve got some long ones I could go through. I won’t do that now.

One that I think really sticks with people is the way the Wright Brothers approached the challenges of creating a machine that would allow human beings to fly.

People were obsessed with this problem 120 years ago. And what most people were doing was creating what the lean startup community would call a minimum viable product. So, they go and create a prototype and they try to have it fly.

These things didn’t work most of the time. Some of them would crash. People were out of time. They were out of money. And sometimes, unfortunately, they were seriously injured.

What did the Wright Brothers do? Before the Wright Brothers flew a plane, they flew a kite. Before they flew a kite, they built a wind tunnel. The wind tunnel was rudimentary, a cardboard box, bicycle spoke wire, and a fan. But within two months, the Wright brothers were able to test 200 different types of wind designs.

So, by metaphor, by analogy, the question the innovator should always be asking is what’s my wind tunnel? What’s a way that I can learn effectively and efficiently, taking no risk? What’s the kite I can fly that if the thing crashes, well, that’s too bad but nobody’s out life and limb.

This can be done in this day and age much more easily, much more cheaply than it ever has been done before. And those that apply a disciplined approach to learning about the uncertainties that always happen when you innovate are those that can speed through innovation’s first mile.

Will Sherlin: [0:27:41]
OK, nice. As a native of the Old North State, North Carolina, I love a good story that involves Orville and Wilbur Wright. So, thank you for that.

Let me ask you, Scott, a lot of what we talk about on the podcast relates to company culture. There’s a brochure on the Innosight website about the environment you’ve set up that you think is very conducive to the innovation process.

I know you’re in Singapore and this is in the US, but can you describe for listeners a little bit about that physical space?

Scott Anthony: [0:28:08]
Absolutely. And just given the way my world works, I spend plenty of time over in the U.S as well. It averages – since I’ve been out in Singapore since 2010, I’ve averaged about seven trips back to the U.S a year. So, I can speak with credibility on this topic.

So, there are a couple of things that we have in our headquarters that I think are things that can be emulated in other physical environments. One is we’ve got this big open space that we called the Business Design Lab. And this is a place where we will bring clients in to go and try to co-create and solve some of the business modeling and strategic questions that they have.

The key thing about this space is it’s open. Everything is moveable in it, so anything can become a whiteboard or whatever you want to do with it. It’s something that you can reconfigure when you want to reconfigure. And it’s set up in a way that you can have lots of different groups coming together and working together on things.

There is one of the things that we believe in, and one of the most persistent findings in the innovation literature, is that magic happens at intersections when different skills and mindsets and backgrounds collide together. So, physical spaces that make it easy for different groups, departments, or even companies to work together can help a ton as you’re trying to break the back of tough innovation problems.

The other small thing that we have down in the ground floor of our headquarters is we’ve got spaces where teams, client teams that are working with particular clients can commandeer so that they can live together, work together, breathe together and really make sure that they’ve got those close person to person interactions that are so critical when you’re working on tough problems.

I absolutely believe in the power of communications technology. Hey, we’re doing this over a system where we’re able to communicate across thousands of miles in an unbelievable way. But there still isn’t quite anything that replicates being in a room together, looking at a white board together, and solving a problem together.

So those are at least a couple things where you’ve got places that encourage intersections, mechanisms that allow people to really work very closely together in a true collaborative way so that you can come up with an answer that no individual could come up with on their own. That’s another pretty persistent finding across the innovation literature. As much as we believe in lone geniuses, they almost never exist.

Steve Jobs is not Steve Jobs without first Steve Wozniak and then Tim Cook and Jony. You have Bill Gates who’s not Bill Gates without Steve Ballmer. You’ve got Mark Zuckerberg who’s not Mark Zuckerberg without Sheryl Sandberg. Even Thomas Edison, the so-called Wizard of Menlo Park, had a team of like 60 researchers who were working with him.

The lone genius is a myth. You need to have a team to go and solve some of the challenges of innovation. And we try to encourage that collaboration and inclusive approach to problem solving through some of the ways that we have physically architected our office.

And it reminds me a little bit that we’re certainly not the size and scale of Pixar. Maybe someday. But it reminds me of one of the best stories about Steve Jobs and there are many, of course, good ones.

But when Jobs was working with Pixar, he was the chairman of Pixar at the time, to design their new office buildings. One of the things he tried to get them to do is to have a single bathroom in it. And this is a massive campus that has thousands of people in it.

The theory is everybody has to go to the bathroom. And if there’s only one bathroom, there’s nowhere to hide. So, you’re going to have chance occurrences, you’re going to run into people, it’s going to inspire those collisions that often lead to innovative ideas.

He was ultimately outvoted. They had a couple bathrooms as opposed to just one. But I think there’s something to that idea of making it easier for people to accidentally bump into each other, because, again, that’s where a lot of the magic happens.

Will Sherlin: [0:31:49]
OK, nice. And one last question. Speaking of physical spaces, you’re in Singapore as we speak and I often times ask guests about technologies or trends that they see coming down the pipeline that they think are just going to blow the innovation doors open.

I’d be curious to get your perspective on the same question being in Singapore, is there anything you see like 3D printing, self-driving cars, the Internet of Things that you just think will be huge and will really spark, you know, a new wave of innovation for us.

Scott Anthony: [0:32:19]
Yeah, I think you mentioned some of the ones that everybody is watching closely now, I think with very good reason. So, if you think about the so-called Internet of Things or smart connected devices, you know people get really excited when Apple does anything. So, it introduces the Apple Watch, and that’s a lot of fun, and it’s going to generate a lot of sales and traction.

But the idea of computing disappearing, disappearing into things that we wear, disappearing into our fabric, disappearing into invisible sensors that’s really going to change a bunch of things.

So, I sit on a panel out here in Singapore where we give small grants to research scientists who have ideas that they think could ultimately spin out new businesses. And one of the ones we looked at most recently was an idea to embed sensors all throughout a place where an elderly consumer lives.

And then in a very unobtrusive way, figure out the story or narrative about that person so that loved ones can understand what’s going on without the person having to go to a hospital or nursing home.

And this is the kind of stuff you’re going to see with the Internet of Things. 3D printing, additive manufacture. If you’re in a business that involves making and distributing things and you’re not paying attention to 3D printing, it really is time to wake up. Because this is going to change so many things for how manufacturing works, how distribution works, how supply chain works, and so on.

Driverless cars, I think one of the things that’s interesting about driverless cars is all the knock-on effects. Think about what happens when, not if, driverless cars are the predominant means of transportation. If you have cars that don’t have drivers, do you still need insurance? The answer is largely no.

If you’re a government that relies heavily on charging people speeding tickets, what happens when nobody speeds? Nobody thinks about these kinds of knock-on effects, but you’ve always got to watch the second and third order effects as well.

I think the last thing I would highlight out here in Asia, we are seeing a real surge in innovations related to financial services. We’ve seen a lot of things in the past decade related to media and communications, and those industries have fundamentally transformed.

I think banking and the way that we save our money, the way that we spend our money, the way that we transact, what we consider to be a bank, what we consider to be a source of financing, that’s in the early stages of undergoing a similar transformation. And you see some really smart entrepreneurs with some really cool ideas to disrupt the space.

Will Sherlin: [0:34:39]
OK, nice. Well, that’s a great note to close on and some great food for thought.

Thanks so much for joining us today, Scott. It was great talking with you about how companies can build their very own innovation engines in 90 days, no less.

Scott Anthony: [0:34:51]
Thanks very much for having me, Will. I very much enjoyed the conversation. Take care.

Will Sherlin: [0:34:54]
You too.

If you’d like to learn more about Scott Anthony, you can follow him on Twitter at @ScottDAnthony. You can read his regular columns on the Harvard Business Review at www.hbr.org and you can visit the Innosight website to learn more about the company and about Scott at www.innosight.com.

Thanks once again to Scott Anthony for joining us this week and thank you for joining us this week. Don’t forget to tune in to next week’s episode where we’re excited to have Dr. Max McKeown on the podcast to talk about crafting your innovation strategy.

We’ll talk about why strategy and planning are decidedly not the same thing, how the future impact strategy and vice versa, and why it’s imperative that you be comfortable incorporating change into your innovation strategy.

Thanks again for joining us and we’ll see you next week.

The Innovation Engine Podcast is recorded, produced, edited and published each week by 3Pillar Global, a product lifecycle management and software development company based in Fairfax, Virginia.

For more information on the company or our services, please visit our website at www.3pillarglobal.com.