This week we are joined by a guest who has helped a wide range of companies speed up the process of innovation. John Carter, an inventor of Bose’s Noise Cancelling Headphones, designer of Apple’s New Product Process, and founder of TCGen Inc., joins us to talk innovation. We will discuss the lessons John learned while working under Dr. Bose that can help you better your innovation pursuits.

John believes that viewing things as a system rather than individual components helps achieve more profound innovations. By system, John means a collection of components that lead to consumer value. He found his interest in systems while studying engineering at Harvey Mudd College. His attention was focused on sound systems, so he pursued a master’s degree at MIT after graduating. While at MIT, he got connected with Dr. Bose and went on to work at Bose for 15 years. John learned many life-changing lessons from Dr. Bose that greatly impacted his career.

While at Bose, John worked on noise-canceling headphones for seven years. He learned an important innovation lesson right away while working on microphones for headphones and quality loudspeakers. His first two sole projects were with Dr. Bose and a technician. During the first couple of months, they were making significant progress on the headphones but were having some challenges. Dr. Bose decided to drop the other program and focus on the headphones. While focusing on improving the base and distortion of the headphones, they realized that the customers wanted noise cancellation. As the inventor, they thought they knew how the customer would like the product, and they were dead wrong. John and his team made the mistakes of not understanding the actual benefits of the product and overengineering.

When I was at HP, there was a lot of overengineering with our printing business. We were engineering way out on the curve, while the customers couldn’t even tell the difference that we thought was noticeable.

John says that Bose was able to beat its competitors by not focusing on improvements that aren’t very noticeable.

In the last segment, we talked about the patience required through the innovation process. The noise-canceling headphones have always impressed me, not just the product, but how it was brought to the market. $300 noise-canceling headphones were so new and radical to the market. Some of the greatest innovations at Bose were done on the marketing and sales front, not the product. They used simple product mission statements such as “great sound from small packages.”

While John was developing products in the lab, Dr. Bose was focused on retail and marketing experiments. He used an innovation process of successive refinement and thought outside the box. First, Dr. Bose tried selling their products door to door. Then he went to direct mail by putting coupons in magazines. Lastly, he went through a radio station that covered various products. This process allowed Bose to build a dedicated fan base and taught John the importance of third-party credibility. Having someone else in a position of authority talk about you in glowing terms is very impactful.

Dr. Bose was a fantastic innovator when it came to marketing. His willingness to experiment, fail, and try again is what brought Bose to where they are today. Failure is education and is about cutting out dead alleys to find the right way.

One common question I get is around innovation investment. In John’s experience, you should spend about 10% of your budget innovation three-five years into the future. When I first got to HP, innovation was a low percentage of the budget. Over time, we shifted to using 10% of our budget on innovation as well. For smaller organizations, John says a rule of thumb is to fund about ten to twenty thousand dollars a year of every technical person you have on board as an investment. Many organizations hurt themselves by not hiring the right people and not letting them do their thing. Having small teams and a high focus is very important for innovation success.

If you want to keep updated with what John is doing, check out his website here. Check out his book here.

John Carter is a widely respected expert on product development. He is an inventor of Bose’s Noise Cancelling Headphones and designer of Apple’s New Product Process. As Founder of TCGen Inc., John has consulted for Abbott, Amazon, Apple, Cisco, HP, IBM, Mozilla, Roche, and 3M. He is the author of “Innovate Products Faster,” featuring more than 40 tools for accelerating product development speed and innovation. John has an MS in Engineering from MIT.

To know more about John Carter and the lessons he learned at Bose, listen to this week's show: Innovation Lessons from Bose.