The Innovators Studio with Phil McKinney

In past episodes, I’ve discussed science fiction stories as tools to predict the future. H.G Wells wrote about atomic bombs and the fallout – thirty years before Nagasaki and Hiroshima. In 1968, John Brunner predicted the European Union, China’s rise to power, and Detroit’s economic downfall.   You can probably take any existing technology and find a book or article that predicted something like it in the past. If you want to spark an idea, the most crucial part is understanding the timing.

Writers of fiction bring something to those whose jobs it is to predict the future. Writers bring the sensory talent. To be a great writer, you need to be aware of things others don’t see and pick up on different trends and moods. The ability for a writer to convey a picture of what could be generates that “what if” spark. Writers can create and invent emotions, worlds, structures, political parties, and., eliciting a response from the reader. It’s all about imagining what it will take to get from point A to point B.

This episode was inspired by an article written by Philip Oltermann discussing novels to predict crises such as genocides or civil wars. The project, called “Project Cassandra,” was run by Jurgen Wertheimer, a professor of comparative literature in Germany.

The overall goal was to figure out if you could predict the unpredictable. They discovered that authors in a given country were writing fiction tied to their country’s circumstances and forecasting what they believed would happen based on the patterns they saw. Some people refer to a crisis as a black swan, which is an event you can’t predict. On the contrary, the project showed that a few years before a crisis, local authors offered a sense of what was coming. These predictions weren’t based on extensive data collection but more focused on people’s feelings. Those running the project focused on the literary infrastructure, asking whether the –  was the book was being censored or if it did elicit extraordinary reactions.

I tend to use a similar process when it comes to predicting the future. On top of looking at reactions, I take interesting writings and search out the people involved in them. Firstly, I ask the writers what barriers are keeping their predictions from happening. I also check what the dependencies are, and most importantly, I ask what the intended and unintended consequences are. No matter what you are doing, it is vital to ponder these things.

The Cassandra Project was looking to predict crises five to seven years out. The early stages of this project were successful in predicting things one year out. The next stage was five to seven years out. The early successes came from giving off strong hints, but this is hard to make actionable. In the case of innovators, hints are interesting, but they have to be translated. This is a challenge for any innovation. Ultimately, Project Cassandra was killed in 2020 by the German government.

Do you think reading the writings of authors can be possible sources of predicting the future? Prediction is challenging and often viewed as the holy grail for innovators. The one guarantee is that you will never be 100% right. This shouldn’t cause you to make us give up, as a prediction can create that little spark that will lead you to the next big thing.

To know more about unexpected ways to predict the future, listen to this week's show: Unexpected Way to Predict the Future.

In past episodes, I've discussed science fiction stories as tools to predict the future. H.G Wells wrote about atomic bombs and the fallout - thirty years before Nagasaki and Hiroshima. In 1968, John Brunner predicted the European Union, China's rise to power, and Detroit's economic downfall. You can probably take any existing technology and find a book or article that predicted something like it in the past. If you want to spark an idea, the most crucial part is understanding the timing.

Writers of fiction bring something to those whose jobs it is to predict the future. Writers bring the sensory talent. To be a great writer, you need to be aware of things others don't see and pick up on different trends and moods. The ability for a writer to convey a picture of what could be generates that "what if" spark. Writers can create and invent emotions, worlds, structures, political parties, and., eliciting a response from the reader. It's all about imagining what it will take to get from point A to point B.

This episode was inspired by an article written by Philip Oltermann discussing novels to predict crises such as genocides or civil wars. The project, called "Project Cassandra," was run by Jurgen Wertheimer, a professor of comparative literature in Germany.

The overall goal was to figure out if you could predict the unpredictable. They discovered that authors in a given country were writing fiction tied to their country's circumstances and forecasting what they believed would happen based on the patterns they saw. Some people refer to a crisis as a black swan, which is an event you can't predict. On the contrary, the project showed that a few years before a crisis, local authors offered a sense of what was coming. These predictions weren't based on extensive data collection but more focused on people's feelings. Those running the project focused on the literary infrastructure, asking whether the - was the book was being censored or if it did elicit extraordinary reactions.

I tend to use a similar process when it comes to predicting the future. On top of looking at reactions, I take interesting writings and search out the people involved in them. Firstly, I ask the writers what barriers are keeping their predictions from happening. I also check what the dependencies are, and most importantly, I ask what the intended and unintended consequences are. No matter what you are doing, it is vital to ponder these things.

The Cassandra Project was looking to predict crises five to seven years out. The early stages of this project were successful in predicting things one year out. The next stage was five to seven years out. The early successes came from giving off strong hints, but this is hard to make actionable. In the case of innovators, hints are interesting, but they have to be translated. This is a challenge for any innovation. Ultimately, Project Cassandra was killed in 2020 by the German government.

Do you think reading the writings of authors can be possible sources of predicting the future? Prediction is challenging and often viewed as the d is the holy grail for innovators. The one guarantee is that you will never be 100% right. This shouldn't cause you to make us give up, as a prediction can create that little spark that will lead you to the next big thing.

To me, pivoting is making a significant change in direction. Many people are not aware that some of the products they use today are the result of a pivot. Today we'll look at seven companies that made meaningful significant changes resulting in ultimate success.

PayPal started as a digital "I owe you" platform. Today, it is a major payment transaction platform that gave birth to the "PayPal mafia", which included people such as Elon Musk. The successful pivot was Airbnb, which originally offered housing for conferences and air mattresses. The third company is Twitter, which started as a podcast platform called Odeo. I was on show five or six in the early days of the platform. When iTunes came out with their podcast app, they put similar platforms such as Odeo out of business. As a result, Jack Dorsey and his team brainstormed, found inspiration, and pivoted, coming up with Twitter. Next up is Western Union, which was a telegram company founded in the 1800s. In recent years, the company pivoted and became a money transfer company. Today, the company handles just shy of $9 billion a year. I use Western Union for non-profit and for-profit work in Rwanda. The next company that has done major pivots is Slack, which I am an avid user of. Slack started as a video game venture called Glitch. When they couldn't get any interest in their idea, they switched to a messaging platform and found success.

The next company is Nintendo, which has been around since the 1880s and has been in many different businesses. They started off making playing cards, and then pivoted to taxi services. Next, Nintendo made instant rice cookers and then pivoted to hourly hotel rooms. Eventually, they pivoted into the early video game space and became the company we know today. The last company is Playdoh, which I grew up using as a kid. Playdoh was originally developed to clean up coal dust off walls. When heat sources were switched from coal to oil, gas, then natural heat, the market for Playdoh dried up. The company realized teachers were getting creative with Playdoh in the classroom and pivoted their business to a different target market.

To pivot successfully, you should treat it like any other area of innovation. First, find your area of focus and ideate. Next, rank your ideas and execute them. At the end of the day, pivoting is better than going bankrupt. I did thirteen startups before my first IPO at Telligent. Pivoting is a skill that innovators need to have and an action they need to be willing to take. Additionally, you need to be dedicated and on the same page as your team to pivot successfully. Next, you need to be willing to change. Don't fall in love with your innovation and refuse to let go. Thirdly, you have to move very quickly to pivot successfully. Lastly, choose what you will be doing and commit to it.

Let's talk about some non-obvious sources of my innovation inspiration. Recently, we spoke about seeing with fresh eyes and how important that practice is. Fresh eyes need innovation inspiration to guide them towards that next game-changing innovation.

The first source of my innovation inspiration is unexpected conversations. I like to talk with interesting people who have different backgrounds than I do. I often do this on airplanes or at rest stops, as well as at large events like TED. My goal of these conversations is to walk away with at least one exceptional idea. I have a set of questions that I ask people in unexpected discussions, such as, "What are you curious about?" or "What innovation do you want to see come to fruition during your lifetime"?

In the 90s, my uncle owned Macarthur Fish and Poultry in the heart of Oakland. One thing that frustrated him was missed phone calls that often led to missed opportunities. During the holiday seasons, it was hard to keep up with numerous calls.

At the time, I was in the telecoms business, and I figured out that it was recorded every time a phone number was called. We decided to look up the callers' information from these missed calls and put it into emails. We would then send it to the store owner to call back, which led to more business. The product was called Imagine and went on to amass a ton of success after its launch in 1998. The success of Imagine eventually became the cornerstone of Telligent, which then grew to be a $3.1 billion business.

All of this resulted from a few unexpected conversations with my uncle and fellow shop owners on Macarthur Boulevard in Oakland, California. Never underestimate the power of an unexpected conversation.

The second source of my innovation inspiration is being observant of what annoys me. We all have things that bother us. It is essential to ask what is causing these annoyances and how they're erased. I've been in the mobile phone industry since the late 80s, so I have many experiences with smartphones. In the early days, smartphones could only run single apps at a time.

A group called Palm had developed a new system called webOS which could run multiple applications simultaneously. I loved webOS so much that I convinced HP to buy it for $3.5 billion. They created what I would call the best smartphone approach out there, which was way ahead of Apple at the time. Now, all smartphones have the system that webOS developed. All of this was a result of an annoyance that a team decided to erase.

The third source is asking the "who, what, when, where, why" questions and applying them to your area of focus. For instance, I am currently reading "This Is How They Tell Me the World Ends" by Nicole Perlroth. Through reading this book and others, I've come up with a way to generate ideas by asking these questions.

Ask yourself what the more profound thing is that will allow you to dig deeper. I have come up with tons of ideas based on what Perlroth shares in the book. My objective is to come up with at least one interesting idea from every chapter. Ultimately, it is essential to remember that inspiration is everywhere, no matter where you are or what situation you find yourself in.

Regret is one of those emotions that can derail your future success. As innovators, regrets can be things like someone else launching an idea you had before you were able to execute it. Today, I am going to share three of my innovation regrets, and how to move past them to continue achieving success.

During the early days of computer viruses, I was Director of Product Development for ThumbScan. We offered a fingerprint biometric device under $1,000, which was the first at this price that could attach to a PC. Since this was before PCs were common, people didn't see much value in the company. During this time, I was making headlines for my work on computer viruses and had written down a ton of ideas about them in a notebook I had. Then, Thumbscan started struggling and sales were dropping. I ended up setting aside my notebook of ideas and focusing on other things. Next thing you know, Norton and McAfee, came out with products similar to my ideas and became very successful. I made a few big mistakes in this situation and learned some lessons. Firstly, I went wrong when I correlated people's interest in the product to an entire industry segment. I also looked at the "now" instead of looking at what could happen if viruses became a major issue. My other big mistake was that I didn't go back and present my ideas to McAfee and Norton. At this time, I was well-known and could have successfully leveraged my reputation. Instead, I chose not to do it because I didn't want to be the second or third guy coming out with the idea, I wanted to be the first. This was another innovation regret because typically, the first people who come out with something don't create the best product.

My second innovation regret comes from a project I called "the six degrees of separation". This idea states that you are only no more than six people away from everybody else. A group of consultants and I were sitting around one day and came up with the idea of this project. We were trying to figure out if we could connect people through their work experience, employers, and the likelihood that they knew somebody, to create a connected introduction network. This was two years before LinkedIn offered any kind of product or service. We put the idea up but got distracted by a new idea and ended up dropping it. LinkedIn came out two years later and became a huge success. Here, I learned that I did not lack ideas, but I lacked a ranking process for my ideas. New ideas always look shiny, and we often gravitate to them, which causes us to lose focus on older and potentially successful ideas.

When I was at a company called Omnipoint, we came up with the idea of pre-paid mobile. This was the very first pre-paid mobile as the existing mobile required built up credit. We set it up to be an easy process that could be purchased anywhere that sold Omnipoint phones. There was no account information required to purchase the service. We got flooded with people using the prepaid service and became very popular. Then, criminals discovered our anonymous phones. This became the launching point for "burner phones". The U.S government was not happy with what we were doing, and I had a lot of conversations with different agencies. From this innovation regret, I learned to look for the unintended consequences of my innovations. Nowadays, I write out my regrets and jot down what I would have done differently. After this, I move on and let go of the past. Moving on is vital because if you dwell on your regrets, they will take your energy and focus away from future innovations.

Previously we talked about innovation adoption and the importance of getting across the innovation adoption curve. Let's shift our conversation to innovation adoption as a competitive advantage. There is a new category of innovation adoption that is on the rise. This category is known as the hyper-adoption of innovation. The category describes the propensity to adopt and adapt to innovation at a speed and skill unmatched. Adopters in this category are willing to change everything very quickly to be successful.

The best example of this is to look at the economies of countries that have become hyper-adopters. Here is some information and statistics on China from a Harvard Business Review article by Zak Dychtwald. In China, we have seen explosive growth in business and infrastructure. The country has a resource that no other country has: a vast population that has lived through an unprecedented amount of change. China's innovation ecosystem of millions of hyper-adoptive consumers makes the country so globally competitive. The Chinese people know change is good and are willing to change when it is necessary for growth.

The "lived experience" has shaped China's unique attitude towards adoption. Looking at lifetime per capita GDP, the U.S has grown roughly 2.7 times from 1990, while China's has grown 32 times. In 1990, China's GDP represented less than 2% of the global total, but by 2019 it represented nearly 19%.

From 2011-2013, China poured more concrete than the U.S had poured in the entire 20th century. In 1990, China's rural population had one refrigerator per one hundred households. Today, that number is ninety-six per one hundred households. In 1990, China had 5.5 million cars on the road, and today they have 270 million. 3.4 million of these cars are electric, representing 47% of global electric cars.

In recent years, the Chinese have had to adapt to radical change more than any other country in the world. Because they constantly implement hyper-adoption, China is poised to take the lead in the innovation arms race.

Becoming a hyper-adopter of innovation means remaining open to trying new things and being willing to change yourself. This includes looking at things with fresh eyes. When teaching workshops, I often ask organizations if they are eager to change. Typically, individuals in the group will say they are fine but point out someone else they think needs to change. You need to evaluate yourself and take the necessary steps to adapt. If you want to create an unfair advantage, you need to be willing to change yourself and decide on your own.

Once you've developed an excellent breakthrough innovation, the next step is figuring out how to get it adopted. Innovators have created numerous helpful models over the years, but most use the innovation adoption model.

The innovation adoption model is the framework that lays out the audience, such as the late adopters or early adopters. This framework assumes that you are the innovator trying to sell innovation. Today, we will be laying the framework for innovation adoption. Innovation adoption is a model that classifies the adopters of innovation based on their levels of readiness.

There are specific characteristics and groups when it comes to innovation adoption. The first group is the innovators, who are the risk-takers, willing to be the first ones to try anything. This group is a small segment but is much more prominent in influence. These early innovators are the ones other people tend to follow.

The next group is the early adopters, who are visionaries that rely on their gut and experience. While they aren't on the bleeding edge, they are on the leading edge. Early adopters may not get it right out of the gate but jump aboard shortly after.

Next, the early majority is the more mainstream market segment and is more prominent than both previous groups combined. Those in this group like new innovations but prefer to wait and see if innovation is successful before adopting it. They look at innovations not just because they are new but because they perceive value in them.

Next, the late majority holds the same portion of the market as the early majority. These people only adopt innovation when it is their last option (Ex. people who had Blackberrys as long as possible). This segment is harder to persuade as they don't like to try new things. They have high regard for advice from friends and colleagues but not traditional advertising.

The last group is the laggards, which are the same size as the innovators and early adopters. These people are the naysayers of any change. They only adopt things when it is necessary, and no options are left.

It is essential to have a unique strategy for approaching each phase of the innovation adoption curve. This strategy comes from author Geoffrey Moore, a friend who has been on the show multiple times. In his book "Crossing the Chasm, he states the chasm between the early adopters and the early majority. This crossing of the chasm is necessary to have a widely successful innovation. To do that, you have to target the market segments and create some excitement over what you have developed. You can't just advertise or market your way over the chasm. It would be best if you had a strategy to find what will provide that needed momentum.

Geoffrey has another strategy he calls the bowling pins. If you think of bowling pins as different industries and solve one industry's problem, it knocks down a bowling pin. In turn, this will bump into another similar industry problem/bowling pin, and it will get knocked down, thus continuing the cycle. This strategy will create excitement and energy, which will help you cross the chasm. The chasm is the biggest struggle for 99% of innovations that could be breakthroughs. You will fail if you don't develop an approach to cross the chasm. 95% of all innovations fail when they neglect the chasm.

It's hard to believe that I've been in the innovation game as long as I have. I've been creating ideas, inventing, launching services, and teaching others to do the same for many years. While this experience is good, it can sometimes be hurtful. Finding yourself doing the same thing over and over again can be tedious.

We all fall into this type of rut. People often do this with morning routines. The good part is you know what step is coming next. The bad part is when something happens to throw you off, you might overlook things. Routines are problematic when dealing with innovation. To successfully find creative ideas, you need to look at things with fresh eyes constantly. By looking with fresh eyes, I mean seeing something as if you are seeing it for the first time.

How do you break the rut to cause your brain to think differently? You need to observe things, not just look at things and take in information. When I was at HP, I would observe customers while shopping for products at BestBuy. When they picked one that wasn't an HP product, I would walk up to them and introduce myself. I'd ask them what made them choose that product over the HP one to understand their reasoning. Observing isn't just about seeing with your eyes. It is also about asking questions and having an inquisitive nature.

In some cases, solving problems with fresh eyes doesn't work. In this case, you may have to bring someone in from the outside who has fresh eyes. Here is an example of this. A major manufacturer of potato chips was struggling with a problem: their chips were too greasy. They previously had too much salt on the chips, so they shook them. They tried this with the grease, and it did not work. They tried to shake the chips even harder, and it left them with broken products.

They finally decided to crowdsource, soliciting ideas from people on how to get rid of excess oil on the chips. The solution came from a concert violinist who realized the problem resembled something they had seen. When a violin hits a precise tone, the resonance of the tone will cause water to dance. The violinist proposed they play a specific note to get the oil to jump off the chip, and it worked. Here was a solution not found by those with years of experience but from an unexpected source.

1. Be aware that you are seeing with old eyes.
2. Build up the habit of looking at everything with fresh eyes. This means doing this differently, asking things differently, and asking different people.
3. Ask for fresh eyes from non-experts. It is crucial to get in the habit of exercising your observation skills. You can do this by driving a different way to work or challenging a process you've used for a while. You can ask someone who isn't an expert to give you feedback, such as the potato chip manufacturer did. You can learn from people with different expertise, country, background, age, etc.

After implementing these things, you will begin to see with fresh eyes, which will lead to the creation of new ideas.

Last week, I wrapped up a workshop I was teaching to innovation leaders on the 7 laws of innovation. At the end of every workshop or session I teach, I conduct an "AMA" or ask me anything time. There seems to be a recurring question I get from leaders who have taken the Innovation Bootcamp and the 7 laws workshop. The question is, "how do I find the time to innovate?"

Now I will share some examples of how organizations have created time for innovation. The first example occurred in the early days of HP long before I was CTO. Bill Hewlett would set aside time for the engineers to work on side projects that they wanted to prioritize. Friday from noon till the end of the day was where this typically went down. All HP's part cabinets would be open and available, with the rule that you had to demo what you created at the end. In the early days of this show, I interviewed Art Fong, who was employee #9 at HP. He got recruited by Bill directly while doing radar work for the military in WW2. During these times, worked on putting together one of the first radar guns for measuring vehicle speed. This work led to the development of new test gear and resulted in employees feeling like they had time and permission to create new ideas.

This became part of the culture at HP.

Another example of how you can create time for innovation has to do with project planning. Most organizations focus all 40 hours of the week on getting projects done for clients. A disciplined organization will schedule 35 hours a week for projects and leave an extra five hours for innovation/think time. Some organizations use what I call "innovation vacations". This is a time where employees can refresh and think of new ideas outside of their scheduled work time. I do "trend safaris", where I hunt for the newest things at big events. I would do this at The Hanover Furniture Fair, New York Fashion Week, the world's fair in Tokyo, etc.

You may still be wondering what you as an individual can do to create time for innovation. The first thing you can do is prioritize. Innovation requires time and commitment. As an innovator and an author, I've learned that consistency is more important than quantity. If you spend an hour a day innovating every day, you will make a lot of progress. You can even spend fifteen minutes a day working on something if you're consistent. Next, you can find an innovation accountability partner. I had a dream of writing a book for many years but didn't do it till an agent approached me with the idea and kept me accountable. You can also talk to your boss and show them the work you are doing. Ask them for guidance on how you can fit innovation time into your schedule. Once you have innovation time allocated, protect it. Just like going to the gym, it becomes a habit if you do it enough days. Similarly, if you start skipping it, eventually you will stop it altogether. Creating time for innovation is so important because, without it, you will have zero ideas. If you are a leader, you need to give clear permission to everyone in your organization to innovate. This can be something like a one-day-a-month innovation day. At the end of the day, you can't create time. When it's gone, it's gone, and it is very limited. By prioritizing your innovation, you will be one step closer to coming up with that new idea.

What is Groupthink?

In this show, we will discuss how groupthink kills innovation. Groupthink is thinking or making decisions as a group in a way that discourages creativity or individual responsibility. The problem with groupthink is that it can create blind spots that are the result of not listening to dissenting opinions. Groupthink tends to end in unintended negative consequences because everyone thinks alike and agrees with each other.

The Eight Symptoms of Groupthink

Let's look at the eight symptoms of groupthink. Irving Janis developed the eight symptoms of groupthink in 1972. The first symptom is the illusion of invulnerability. It creates excessive optimism that encourages taking extreme risks, which always has a downside. Number two is a collective rationalization, where members discount warnings and don't reconsider their assumptions. The third symptom is belief in inherent morality, where members ignore the ethical or moral consequences of their decisions. Number four is the stereotyped views of the outgroup. This is where you stereotype people that are not in your group. The fifth symptom is direct pressure on dissenters. This is where members are pressured not to disagree with the group's views. Number six is self-censorship, where you don't say certain things to avoid reactions from people. Number seven is the illusion of unanimity. This is the view that the majority view is thought to be unanimous. In most cases, this is just an assumption. Number eight is self-appointed mind guards. These members protect the group from information that is contradictory to the group's cohesiveness.

Examples of Groupthink

Here are two examples of the negative consequences of groupthink. Swiss Air was a Swiss airline that was so financially stable that people referred to it as the flying bank. In July of 2001, the company collapsed. Right before this, they got rid of any industrial technical expertise from its governing board. The company wanted to reduce anything that threatened the cohesiveness of the board of directors. Insider groupthink took over and led the company to failure. In 1999, fifty-four members of the Major League Baseball Umpires Association resigned in mass. The umpire did this to influence the ability to renegotiate new contracts. Ultimately, the MLB hired new umpires and decertified the entire union.

Combating Groupthink That Kills Innovation

Innovation is all about doing something new and unique and taking risks. Groupthink is all about conformity, thinking the same, and being in alignment. If you fall into this trap, then it turns into an innovation antibody, and innovation antibodies block new ideas. There are several ways to combat groupthink. Firstly, you can formalize the questioning process. A group should have a process that gives questioning permission to those within the group. There should also be people from outside the group challenging it. Another way to fight groupthink is to institute anonymity. This will make people more comfortable giving their opinion. Number four is to bring in outsiders such as consultants and encourage them to point out problems. Lastly, allow extra time so things can be questioned and challenged.