The Innovators Studio with Phil McKinney

I was recently asked to give a talk at TEDx Boulder. The talk was based on a speech I gave in D.C. a few months past. Humans have a superpower. That superpower is the ability to convince ourselves that something is true when it is not. Seventy-five percent of us have convinced ourselves that we are an imposter or fraud when it comes to our jobs and careers. Psychologists refer to this as the imposter syndrome. The imposter syndrome is questioning our achievements and living with the fear that someone is going to find out that we are not good enough and we are a fraud. The imposter syndrome struggle does not know anything about career, title, identity, history; it is universal. So many of us struggle with this, the question is what do you do about it? I am going to give you two plans of action.

1. Find a comfortable/safe environment to share the secret that is telling you that you are not good enough.
2. Be an encourager and encourage others on their skills and capabilities.

I wasted twenty-five years of my career believing the lie that I was not good enough. So what lie is telling you that you are not good enough and that you are an imposter? Whatever that lie is, the opposite is the truth. So, what is the truth about you that is amazing?

Fear of the Imposter Syndrome

As I shared in the speech, imposter syndrome knows no boundaries. It is not tied to something about us, it is ourselves being hypercritical of ourselves. The fear of being found out can be paralyzing. What is fear? Fear is that emotion that comes from feeling threatened, feeling like you are going to get hurt, or abused, it can be the result of being physically impacted or how we will be emotionally impacted. Fear stands for "false evidence that appears real." My fear was not conforming to what society said would make me successful. In the innovation game we will experience the fear of failing, the fear that the idea is not good enough. What I learned from my experience from feeling fear from imposter syndrome is to test it. Is it true fear? Or false evidence that appears true? Once you know, put your fear in its proper place.

If you find yourself struggling with imposter syndrome, why don't you head over to The Innovators Community. It is a great place to connect and post your own imposter syndrome or send me a private message and I will respond. I'd love to hear from you. Definitely, find someone to share your imposter syndrome secret. Thanks for taking the time out of your busy schedule to join us today.

Five Minutes to New Ideas

Have you ever purchased an item that others hated? Or what about the opposite; have you ever been using a product or service that you absolutely despise? If you are producing a product that some people love what you are doing, there will be others that dislike your product with an equal passion. Plenty of companies trade on the fact that they represent something that the mainstream culture will find offensive or questionable. Will it benefit you and your product to deliberately set yourself in opposition to certain social groups? Can you use the things that's objectional about your product to create a community of customers? By looking at your product differently, from the perspective of something objectional, you may find that one thing that will set you apart.

To win in the highly competitive markets of today, we need to win in the emerging creative economy. Key to this success is helping our teams re-discover their natural ability to be highly creative. Today's show is the audio from a keynote speech I gave at the Business Alliance Bootcamp for growing companies and entrepreneurs in Washington DC.

Creativity Economy

Knowledge is becoming a commodity.  If you have a job that can be taught at a University, your skill is at risk and your job is at risk.  The impact of this is everywhere.  Think about the transitions from an agricultural to a manufacturing economy to a knowledge economy.  My argument is that the creative economy is here.  What’s the new thing?  The new thing is this creative economy.  In the early 1980s the market value for companies listed on the stock exchanges was concentrated on book value with most company’s stock valued at 95% book value.  Twenty years later 23% is the average book value.  So, in 20 years a major fundamental shift occurred on how companies get valued.  I would argue that one of the key pieces on the increases in that intangible value is the role of creativity and innovation.  It is the value of ideas.  It is no longer what you can do with your hands or with a machine, it is the ability to continually generate new ideas, new products, and new services.  A lot of companies are unable to do this and as a result, do not survive.  Economic stability going forward is the ability to have ideas being continuously generated from the organization.  Innovation is important, but a lot of companies make the mistake of putting all of the pressure for innovation on their Chief Innovation Officer.  Go out and do a survey.  Eighty-six percent of CEO’s admit that innovation is key to their business but less than ten percent have any formal process to innovate within their organization.

Bringing Back Creativity

My strong belief is that creativity is not a gift.  It is not bestowed on people, it is a skill that anybody can learn, practice, and become proficient at.  It ignores age, demographics, education levels, and geography.  It is the ability to put your own thought processes in place, to come up with the next idea, product, or service.  A lot of people are self-pessimistic and are convinced that they do not have it and they are not creative. The fact is that we are creative creatures; we were created to create.  Think about kids and how creative they are with a simple object like a toilet paper roll. The problem is through the process of our education systems and through jobs, we literally beat that creativity out of our people.  How do we bring back that amount of creativity that we see in kids and bring it back to our day to day lives?  We need that ability to take our filters off and see things from an unbiased and different perspective.  I had a conversation with a co-worker many years ago about “old think and new think.”  Old think is when you are coming up with an idea and then you put a filter on it and decide to go safe and go with the old way of doing things.  New think is all about breaking perspectives and getting rid of perspectives that confine and restrict us from coming up with new ideas.  The best ideas will sound stupid.  If you are not coming up with stupid ideas, then try harder!

FIRE and PO

“FIRE” is a very simple method you can apply to come up with ideas.

* “F” in the acronym “FIRE” stands for focus.

On April 4, 2008, Phil McKinney, Vice President and Chief Technology Officer at Hewlett Packard, delivered the morning keynote speech at the fifth annual Business Alliance Bootcamp for growing companies and entrepreneurs in Washington DC.

Creativity Economy

What I am going to do today is give you my perspective on some of the economic challenges and also encourage you in thinking differently when working to create value. Knowledge is becoming a commodity. If you have a job that can be taught at a University, your skill is at risk and your job is at risk. The impact of this is everywhere. Think about the transitions from an agricultural to a manufacturing economy to a knowledge economy. My argument is that the creative economy is here. What's the new thing? The new thing is this creative economy. In the early 1980's the market value for companies listed on the stock exchanges was concentrated on book value with most company's stock value at 95% book value. Twenty years later 23% is the average book value. So, in 20 years a major fundamental shift occurred on how companies get valued. I would argue that one of the key pieces on the increases of that intangible value is the role of creativity and innovation. It is the value of ideas. It is no longer what you can do with your hands or with a machine, it is the ability to continually generate new ideas, new products, and new services. A lot of companies are unable to do this and as a result, do not survive. Economic stability going forward is the ability to have ideas being continuously generated from the organization. Innovation is important, but a lot of companies make the mistake of putting all of the pressure for innovation on their Chief Innovation Officer. Go out and do a survey. Eighty six percent of CEO's admit that innovation is key to their business but less than ten percent have any formal process to innovate within their organization.

Bringing Back Creativity

My strong belief is that creativity is not a gift. It is not bestowed on people, it is a skill that anybody can learn, practice, and become proficient at. It ignores age, demographics, education levels, and geography. It is the ability to put your own thought processes in place, to come up with the next idea, product, or service. A lot of people are self-pessimistic and are convinced that they do not have it and they are not creative. The fact is that we are creative creatures; we were created to create. Think about kids and how creative they are with a simple object like a toilet paper roll. The problem is through the process of our education systems and through jobs, we literally beat that creativity out of our people. How do we bring back that amount of creativity that we see in kids and bring it back to our day to day lives? We need that ability to take our filters off and see things from an unbiased and different perspective. I had a conversation with a co-worker many years ago about "old think and new think." Old think is when you are coming up with an idea and then you put a filter on it and decide to go safe and go with the old way of doing things. New think is all about breaking perspectives and getting rid of perspectives that confine and restrict us from coming up with new ideas. The best ideas will sound stupid. If you are not coming up with stupid ideas, then try harder!

FIRE and POE

"FIRE" is a very simple method you can apply to come up with ideas.

• "F" in the acronym "FIRE" stands for focus.
  • How do you bring focus to where you are going to innovate?
  • Pick an area of focus.
• "I" stands for ideation.
  • How do you generate ideas?
  • Ask better questions.
• "R" stands for ranking.
  • What is the best idea?
  • I rank through five questions:
    • Will this idea fundamentally change the customer's experience or expectation?
    • Will this change the competitive landscape?
    • Does this fundamentally change the economics of the industry?
    • Do you have a contribution to make?
    • Will this generate sufficient margin?
  • "E" stands for execution.

So, what does "POE" stand for? "POE" is two fundamental skills that you should do each and every day in perspective to "FIRE."

• "P" stands for perspective.
  • You must be able to change your perspective.
  • Look for the non-obvious.
• "O" stands for observation skills.
  • Watch how customers buy your products and your competitor's products.
  • Get out there and see how your customer's use your products.

Innovation Gap

Idea's without execution are hobbies. People's individual career success is going to be in their own individual ability to participate in the creative economy. What are you contributing to those intangible values that your company is creating and is going to get a return back from those investors? Companies are suffering today on a huge innovation gap. Small businesses are the most prolific patent producers in the entire segment in the U.S. Small businesses are fourteen times higher than any other segment on the marketplace. Patents that are highly referenced by other patents or materials are highly valued patents. If you look at the top one percent of the cited patents today in the U.S. it is two times more likely that it is a small business patent. That says that the most important innovations that are being created are coming from small businesses. Companies and economies are going to be dependent on creating an environment where people can bring their creativity skills to create value for the business, create jobs, create economic stability, and put all the economies back on the growth curves. Thanks for taking the time out of your busy schedule to join us today. If you have questions or comments on this week's show, I'd love to hear from you. You can also carry on the conversation with other innovators at The Innovators Community.

Laws of Innovation

Why do some organizations have better innovation than others? Over the years I have collected what I call the "7 Immutable Laws of Innovation." No single organization could be successful in all of these laws but there are always opportunities to improve. Let's get started with the laws of Innovation.

1. Law of Leadership.
   1. Leadership sets the tone of the organization. This includes the:
      1. Board of Directors and CEO
      2. Direct Reports (other C-levels, Vice President's, Directors)
   2. Leadership must be at the front walking the walk and talking the talk.
2. Law of Culture.
   1. "Culture eats strategy for lunch."
   2. Create a culture of innovation to support a strategy of innovation.
   3. Culture has to:
      1. Involve people.
      2. Value ideas.
   4. All the resources need to be aligned.
   5. Communication needs to be clear.
3. Law of Resources.
   1. This requires a committed level of resources to include people, money, time and equipment.
   2. Must effectively allocate and protect your resources.
4. Law of Patience.
   1. Patience is critical for innovation.
   2. Management needs to have patience. Some innovation projects can take longer than twenty years to be completed.
5. Law of Process.
   1. You can apply somebody else's process, but you need to adapt the process to your organization.
   2. Needs to cover the full innovation chain.
      1. How you capture ideas.
      2. How you generate better ideas.
      3. How you identify the best ideas.
      4. How you execute those ideas.
   3. Never let your innovation process become stagnant.

1. Law of the BHAG. (Bold, Hairy, Audacious, Goal).
   1. Unique characteristics of BHAG.
      1. Very clear and concise of what the target is.
      2. Needs to be a stretch.
   2. Let the process of innovation within your organization define the how.
2. Law of Execution.
   1. Execution is the task of going through and putting a product out there for customers.
   2. Ideas without execution are a hobby.
   3. Think about segmenting the execution into phases.
      1. You will be able to kill projects that are not going to be successful.
      2. Allows you to reduce your risks.
      3. The objective is to actually execute, not review.

Not all organizations will be in a position to be successful in all of these laws. Think about each of these laws and rank your organization. Be honest with yourself on the areas you need to improve upon. You can see our Organization's Innovation Readiness survey based on the 7 Laws to assess and benchmark.

Five Questions to Ask an Innovation Consultant

Have you noticed that the market is being flooded with a new type of consultant? These people have branded themselves innovation consultants. My advice to organizations is to treat consultants with a little bit of caution; they should be one of many inputs in the innovation process. Do not discount the inside experts you already have within your organization. There are five questions you should ask every innovation consultant.

1. What innovations have you come up with and delivered to the market?
   1. Emphasis on them, not past clients.
   2. Weeds out the people who teach versus the people who do.
2. What approach did you use?
   1. How did you deliver that to the marketplace?
   2. Why did you use that approach?
   3. What are the benefits versus using other approaches?
   4. How many firms are using the approach you came up with?
   5. When was the last time you innovated the approach?
3. What were the lessons learned?
   1. What would you do differently?
4. What innovations are you working on now?
5. How do you personally stay innovative?

I have framed these questions specifically for people looking to hire innovation consultants, but some of you are innovation consultants looking to get hired. How would you answer these questions for yourself? And how can you improve your answers? Consultants are needed and critical, but you need to make sure you are getting real expertise in this field.

The MacGyver Method Creative Challenge

Based on the popularity of the last podcast's creativity challenge, I have decided to present another one in this week's show. This creative challenge is called the MacGyver or the Apollo 13. With this method:

1. You are given a problem or objective.
2. You open your purse, briefcase, or desk drawer.
3. Use only the items you have.
4. Create as many ideas within twenty minutes.

For this exercise, you get to work and realize you forgot to get a gift for a co-workers upcoming wedding. You are given the tasks of creating or buying a gift with only the items within your reach. For each idea:

1. The idea must have a practical use.
2. The idea must be made from two or more items you have on your desk.

I hope today's show inspired you to look more in depth into the 7 Immutable Laws of Innovation and to see how it is applied in your organization and can be optimized. Remember an innovation coach can be very impactful and help exceed outcomes, but you do need to be careful in choosing one. Look for real experience and proof points, not just theory. If you have questions or comments on this week's show, I'd love to hear from you. You can also carry on the conversation with other innovators at The Innovators Community.

Co-Innovation

What is Co-Innovation? Co-Innovation is two parties with unique expertise that come together in a 50/50 funding of resources. The key component being they have complimentary interests. Think of it as a Venn diagram. The goal of Co-Innovation is to find where the Venn diagrams overlap. Co-Innovation means:

• Two parties with patented expertise.
• A complete 50/50 venture.
  • Define what it is/why it exists.
  • Find the common area of interests.
  • Agree on what the target is.
  • How do you go about doing it.
• Neither of you can do it alone.
  • You and your partner cannot do it alone.
  • This creates mutual dependency.
  • Requires both entities to participate in.
• You are going to launch a real product.
  • The product had to be launched within 24 months.
  • The product had to have high impact to both organizations.

If you set up a Co-Innovation program successfully, they will have benefits to your organization such as:

• Reducing risk.
• Speeding up delivery of innovation.
• Leveraging your R&D budget.

Lessons Learned

Over the years of creating these programs there are a couple lessons I have learned.

How do you manage these programs once they are under way?

• Use your senior executive sponsorship to set the pacing.
• Set gates and milestones.
  • You must have clear targets.
• Share and show what you are working on.
  • Get real feedback from customers using your products.

How do you get a Co-Innovation program going?

• You have to find the areas of mutual interests.
  • This takes time and many conversations with leaders of other organizations.
• Set up a one-day workshop where teams from both sides talk about their areas of interests.
  • Start working together as teams and propose a target.

When Co-Innovation programs go wrong, the case is usually that people want to call it a Co-Innovation program when it really is not.

• A lot of companies confuse Co-Innovation with contract R&D.
• Another is that a lot of people are really focused on research with no real plan. Innovation is all about execution.
• It turns into a PR or a marketing effort.

If you follow these basic rules, Co-Innovation programs can really ignite your organization and take you into market opportunities you would never be able to achieve on your own.

Strategic Storytelling

Why is it so hard for people to pitch their ideas? To tell their ideas in a way that people swarm towards it and want to be a part of it. The skill of the pitch is so hard to find. What I have found is that the skill of pitch usually falls into two categories:

• The person making the pitch believes they can win you with facts
  • They know what they are talking about.
  • They attempt to belittle anyone who challenges them, with facts.
• Overwhelming with content
  • They overwhelm you with an abundance of slides and content.

So, what is it that makes people struggle with coming up with a well thought-out and structured pitch? Many people forget about the fact that decisions are personal. You cannot ignore the personal and emotional side of decision making. In doing the pitch, you have to create an emotional side to your story to hook the listeners in and make them understand your pitch. The way I do this is called "Strategic Storytelling." Storytelling is a critical part of the pitch. Storytelling around a strategic pitch involves three things:

• Define the problem in the form of a story.
• Define the solution as part of a story.
  • Tell the story in such a way that they can see themselves using that solution.
• Place the people in that story.
  • Tell the story in such a way that they can place themselves in that story.

The Structure of Strategic Storytelling

The way to structure the strategic storytelling is the structure of a three-act play. A three-act play is typically what you see in TV shows and movies.

• Act One is the set up.
  • It is about setting up location, defining characters, and laying the foundation.
  • Giving people background.
  • Warming people up to the concept of a story-telling process.
• Act Two is the confrontation.
  • The obstacle, the problem, the challenge people are facing.
  • Describe the size, the scope, and the impact of the problem.
  • This act is used to pull out the emotions of people.
• Act Three is the resolution.
  • Describe how the solution is going to solve or minimize the problems.
  • It tells what the role of the solution is on a long-term basis.

Think about the acts in the context of a movie. Use this structure in your presentation; don't just use slides, talk and engage. There are a few basic rules I have learned about strategic storytelling:

• Keep it short.
  • Typically, twenty minutes is a good time length for the story.
  • If it takes longer, than you do not know your subject matter well enough.
• Tailor it to the people in the meeting.
  • Do not go in there with a generic story.
  • You can find out a lot about the people through social medias.
• Put emotion and passion into it.
  • Do not make it sound like you are reading a script in a monotone voice.
  • Practice it so it sounds natural.
• Understand the use of pausing and the tone of your voice to create tension and excitement.
  • Understand the role of your voice.
• Read the body language of the people in the meeting.
  • If people are not really listening, change it up and catch their attention.
• When you end your strategic story, end it with emphasis.
  • End it on a pause.
  • You want it to fully sink into people's minds.

At the end of your pitch there are a few things you can do to improve your strategic storytelling.

• Follow up with the people in the room at the end and ask how you can improve your pitch.
  • Ask if you were clear and fully conveyed your message.
• • Record it and listen back.
  • Go on YouTube and find great storytellers.

I hope today's show inspired you to look into co-innovating and engaging in strategic storytelling. Don't get bogged down by distractions that take you off course from creating the next Killer Innovation, telling a compelling story and achieving your goals. If you have questions or comments on this week's show, I'd love to hear from you. Or carryon the conversation about these steps to building innovation strength at The Innovators Community.

The success of the Apollo 11 mission, the first moon landing, inspires our innovative passions and pursuits. With the 50th Anniversary of Apollo 11 landing on the moon, I've been looking back at all of those that impacted and supported an incredible journey. In this episode of Killer Innovations, I had the pleasure of interviewing the inventor of the early display technology that ultimately resulted in the creation of the moon monitor. It was the moon monitor that allowed NASA and the rest of the world to watch Neil Armstrong walk on the moon. An IEEE Fellow for Logic Analysis technology, he also was President of ACM, the world's largest Computer Science society, and is an ACM Fellow. He holds HPs only Medal of Defiance, awarded by David Packard for "extraordinary contempt and defiance beyond the normal call of engineering duty". Other awards include Engineer of the Year, Smithsonian Wizard of Computing, Top 50 inventions of the 20th century, CNN top 25 inventions of the past 25 years, Entrepreneuring Honor Roll.

Past in HP

Long before the Apollo 11 success, Chuck House was a physics major at CalTech when he had an interview with HP. He went on to work at HP for 28 years. It was there that he was challenged by the CEOs and directors to be on top of innovation. House says that every year at HP there was an oral exam to review each project. They would ask questions such as:

• What contribution does it make?
• Why is it ahead?
• What is the next step after this?
• What is the science underneath it?

The notion at the company was that you had to be part of a team and the team must understand the science behind what you are working on. House discusses a number of insightful practices in a book he co-authored about his time at HP.

Impactful Successes & Awards

House's second project at HP, which ultimately led to the moon monitor for NASA, was to figure out how to stabilize a scope screen. The project appeared to have been a waste of time. It even failed the technical evaluation. House was told to cancel the project and remove it from the lab. Instead of abandoning the project, House and his team decided to put the product in production. Within ten months it was finished. Who would have known about this project's pivotal role in the Apollo 11 mission? The project turned out to be a huge success with sales to many leading companies and NASA. Sixteen years later, in April of 1982, House was awarded a going away gift…the Award of Defiance. House speaks more of this in his HP memoir. House also received the Innovative Applications in Analytics Award (IAAA). Other awards include Engineer of the Year, Smithsonian Wizard of Computing, Top 50 inventions of the 20th century, CNN top 25 inventions of the past 25 years, Entrepreneuring Honor Roll.

Words of Advice

Lastly, I asked House: What advice would you give people who really have a passion to be inventors, to be innovators, to really change the world? What advice would you give them? What should they do to get ready? House believes in a lot of experimentation. What you learn are not formulas, it is a way of thinking. And the way of thinking is a logical, ordered, structure of cause and effect or of relationships that work. And that ordered, structured way of thinking is crucial to being able to work through to a solution. The curiosity and the enthusiasm and the drive is essential to the creativity side. But unless you can take that creativity and harness it so that you can make traction and get something in a resultant way, you are going to be slowed down. You cannot be afraid to try new things and make mistakes.

Giving in to corporate antibodies and giving up at the first signs of failure could seriously limit the out of this world opportunities. Had Chuck giving up when he was told to shelf his project, we may never have seen the Apollo 11 moon landing.

If you have questions or comments on this week's show, I'd love to hear from you. Do you have failures that lead to success you'd like to share with us? Spark the conversation at The Innovators Community.

What is the strength of innovation in your organization?  In this week’s Killer Innovations, we explore avenues to building innovation strength.  Innovation from Mergers and Acquisitions can be a fast track to innovation.  What are the pros and cons to this innovation path? We also look at the five biggest risks to innovation.  Your company’s innovation depends on avoiding the pitfalls. Is building innovation strength through acquiring innovation right for your company?  Avoiding the risks to innovation stretches across a broader spectrum.  Any company should be aware of the five biggest risks to innovation.

Mergers and Acquisitions: Acquiring Innovation

A growing means of building innovation strength is through acquiring innovation.  Innovation from Mergers and Acquisitions has its benefits and its drawbacks.  

To start, there are two types:

Acquiring a company outright

Purchasing the Intellectual Properties – This could be a product line, patents, a team, or a group of individuals with core expertise.

Let’s discuss the first type, acquiring the company.  Innovation from Mergers and Acquisitions has its pros and its cons.

Pros

* You can get into a market fast – you don’t have to wait for R&D.

* There are reduced risks.

Cons

* Reduced risks = lower returns.

* This approach can make an organization lazy.

* This approach can be expensive.

The most common reason for Innovation from Mergers and Acquisitions are:

Your company missed a trend and now you have to acquire company to get into the space.

You saw the trend, but didn’t realize its impact.

You saw the trend, but wanted to avoid the risk of investing in it.

Innovation from Mergers and Acquisitions can work if it is:

Proactive

Part of an innovation strategy

The second type of Innovation from Mergers and Acquisitions is purchasing Intellectual Properties (IP).  Why has it become so important? In a word: litigation. Patent lawsuits offer lucrative opportunity. Exclusivity to a company’s investment can reap financial gain.  This creates issues for those seeking to build innovation strength in this way. It can be especially difficult for the small business. To buy a patent can be expensive.  Options are out there for acquiring innovation to build innovation strength. Companies can join a patent pool. Another option is for companies to join forces and make a group purchase of a patent.

Patent Selling

Whether you are part of a large or small organization, think of this approach.  If you are a seller of patents, write it in your agreement. Prevent the buyer from using your patents in proactive litigation.  Allow the patents to only be used in defense. Why do people acquire patents?

To exert a form of control.

To create a defense.

Allowing your patents to be used only in defense, make them unattractive to patent trolls.  Patent trolls’ sole purpose is to buy patents and sue. We need to come up with a radical approach to addressing the patent lawsuit challenges that are taking place in organization.  

Another aspect of this are PCLs (Patent Cross Licenses).  Most large companies pre-negotiate a patent cross license.  This takes the whole risk of litigation off the table.  

The Five Biggest Risks to Innovation

It does not matter what or who you are as an organization.  It’s a common theme I have seen across organizations, irrespective of their size.  I’ve compiled what I’ve observed into “The Five Biggest Risks to Innovati...

What is the strength of innovation in your organization? In this week's Killer Innovations, we explore avenues to building innovation strength. Innovation from Mergers and Acquisitions can be a fast track to innovation. What are the pros and cons to this innovation path? We also look at the five biggest risks to innovation. Your company's innovation depends on avoiding the pitfalls. Is building innovation strength through acquiring innovation right for your company? Avoiding the risks to innovation stretches across a broader spectrum. Any company should be aware of the five biggest risks to innovation.

Mergers and Acquisitions: Acquiring Innovation

A growing means of building innovation strength is through acquiring innovation. Innovation from Mergers and Acquisitions has its benefits and its drawbacks.

To start, there are two types:

1. Acquiring a company outright
2. Purchasing the Intellectual Properties – This could be a product line, patents, a team, or a group of individuals with core expertise.

Let's discuss the first type, acquiring the company. Innovation from Mergers and Acquisitions has its pros and its cons.

Pros

• • You can get into a market fast – you don't have to wait for R&D.
  • There are reduced risks.

Cons

• • Reduced risks = lower returns.
  • This approach can make an organization lazy.
  • This approach can be expensive.

The most common reason for Innovation from Mergers and Acquisitions are:

1. Your company missed a trend and now you have to acquire company to get into the space.
2. You saw the trend, but didn't realize its impact.
3. You saw the trend, but wanted to avoid the risk of investing in it.

Innovation from Mergers and Acquisitions can work if it is:

• Proactive
• Part of an innovation strategy

The second type of Innovation from Mergers and Acquisitions is purchasing Intellectual Properties (IP). Why has it become so important? In a word: litigation. Patent lawsuits offer lucrative opportunity. Exclusivity to a company's investment can reap financial gain. This creates issues for those seeking to build innovation strength in this way. It can be especially difficult for the small business. To buy a patent can be expensive. Options are out there for acquiring innovation to build innovation strength. Companies can join a patent pool. Another option is for companies to join forces and make a group purchase of a patent.

Patent Selling

Whether you are part of a large or small organization, think of this approach. If you are a seller of patents, write it in your agreement. Prevent the buyer from using your patents in proactive litigation. Allow the patents to only be used in defense. Why do people acquire patents?

1. To exert a form of control.
2. To create a defense.

Allowing your patents to be used only in defense, make them unattractive to patent trolls. Patent trolls' sole purpose is to buy patents and sue. We need to come up with a radical approach to addressing the patent lawsuit challenges that are taking place in organization.

Another aspect of this are PCLs (Patent Cross Licenses). Most large companies pre-negotiate a patent cross license. This takes the whole risk of litigation off the table.

The Five Biggest Risks to Innovation

It does not matter what or who you are as an organization. It's a common theme I have seen across organizations, irrespective of their size. I've compiled what I've observed into "The Five Biggest Risks to Innovation." Those risks are as follows:

1. Corporate antibodies and the tolerance of leadership for antibodies.
   • Antibodies can prevent uncontrolled risks, but are mostly roadblocks to innovation.
   • Leaders know who they are, but still tolerate them.
   • True leaders should correct or remove antibodies from an organization.
   • If leaders never correct antibodies, it counters being an innovative organization.
2. Lack of patience
   • Innovation is not the quick fix.
   • Have robust innovation pipeline – keep it active and full.
   • Companies realize they need ideas, but ignore it for so long that they want a quick fix.
3. The Ambiguous Process
   • If someone in the company has an idea, what is the process for submitting the idea
   • Without a clear process, people get frustrated, then disengaged.
   • Goal should be 100% of the ecosystem engaged in your innovation agenda.
     How do you do this?
     • Be clear about what the process is.
     • It should inform how employees can get engaged and track the process.
     • Employees should feel their contributing to the process.
     • Contributors should know how decisions are made and what projects get funded.
4. Unprotected Resources
   • Commit your resources.
   • Protect your resources.
5. Poorly defined "BHAG" (bold, hairy, audacious, goal)
   • Setting the bar high for the team.
   • Provide a clear goal.

Within your organization you could see anywhere from one to all five of these risks to innovation. As an innovation leader, you need to define the problem and find a solution. Don't try to solve all five problems at once. I recommend defining the "BHAG" and the ambiguous process first because those you can directly control.

I hope today's discussion gives you the insight on ways to build innovation strength. Through acquiring innovation, you can get an innovative edge over the competition. But be wary of this approach as a way to play catch up. Then, for any organization with a drive towards innovation, watch out for the Five Biggest Risks to Innovation. If you have questions or comments on this week's show, I'd love to hear from you. Or carryon the conversation about these steps to building innovation strength at The Innovators Community.

Innovation is all about translating ideas into real products, real services and real solutions.   Ideas without execution are a hobby.  Is your organization in the business of innovation?   This week’s show boils it down to a simple equation.  Ideas + Innovation Culture = Innovation Success.  The process starts with ideas and the management of them.  But ideas won’t develop and thrive without the right culture.  Core Attributes are about setting the basis for Innovation Culture.  When you set up a good system of gathering ideas and lay a foundation for innovation culture, innovation success ensues.

Creating Order from the Brainstorm of Ideas

The process starts with ideas coming from many sources.  Then comes the question of how to manage your ideas.  How do you log, track and rank them?  Where are your ideas today in the innovation lifecycle?  What about from all the brainstorming sessions over the last few years… and could you easily put your hand on the list of those ideas?  Ideas have value over time.

The Idea Management System, Step By Step

If you believe ideas are the currency of the economy, you need to manage ideas as a valued asset for innovation success.  Treat ideas as a valuable asset.

What’s needed in an idea management system?

* Idea capture and tracking

* Easy way to put ideas in system, track over time, evaluate them and link to other ideas that could grow into something significant.

* Done by people on innovation team but also open to other people in the organization who can submit an idea easily – have one place to look for all assets

* Idea evaluation – some form of an idea evaluation tool that allows for management to assess and look at ideas more closely

* Does everyone in the organization look at it and vote

* Use a ranking process like F-Focus, I-Ideation, R-Ranking, E-Execution

* Crowd source feedback

* System must allow for Ad Hoc Team Collaboration

* As people submit an idea, people can search the system to see if someone has a similar idea across the organization – can team up, combine efforts and areas of expertise

* Social hub of innovation within an organization

* Get better ideas – cross organizational efforts – collaborations that generate exciting ideas

* Supports whatever your organization’s process is for innovation

* Tool needs to match today’s and even tomorrow’s process

* Track ideas through the gating process your organization uses

* Follows phases of innovation used

Lot of tools out there that force you to follow their process – be careful – you need a tool that follows your process.

* Needs to support pausing ideas

* Difference between a good idea and really great idea is not about the idea.  It’s about the timing.

* Market, customer, organization, government regulation are not ready – lots of reasons.

* Key is you always need ability to pause the idea – capture it so that can pause and pull out an idea later when timing is right

* Ability to issue challenges

* Don’t run idea management system like an electronic suggestion box – ideas will become incremental

* For breakthrough ideas, issue challenges: carefully worded questions, problems, areas of interest put out to the general population with some form of incentive for spending time thinking about ideas/approaches that will answer or solve that in form of ideas

Innovation is all about translating ideas into real products, real services and real solutions. Ideas without execution are a hobby. Is your organization in the business of innovation? This week's show boils it down to a simple equation. Ideas + Innovation Culture = Innovation Success. The process starts with ideas and the management of them. But ideas won't develop and thrive without the right culture. Core Attributes are about setting the basis for Innovation Culture. When you set up a good system of gathering ideas and lay a foundation for innovation culture, innovation success ensues.

Creating Order from the Brainstorm of Ideas

The process starts with ideas coming from many sources. Then comes the question of how to manage your ideas. How do you log, track and rank them? Where are your ideas today in the innovation lifecycle? What about from all the brainstorming sessions over the last few years… and could you easily put your hand on the list of those ideas? Ideas have value over time.

The Idea Management System, Step By Step

If you believe ideas are the currency of the economy, you need to manage ideas as a valued asset for innovation success. Treat ideas as a valuable asset.

What's needed in an idea management system?

1. Idea capture and tracking
   1. Easy way to put ideas in system, track over time, evaluate them and link to other ideas that could grow into something significant.
   2. Done by people on innovation team but also open to other people in the organization who can submit an idea easily – have one place to look for all assets
2. Idea evaluation – some form of an idea evaluation tool that allows for management to assess and look at ideas more closely
   1. Does everyone in the organization look at it and vote
   2. Use a ranking process like F-Focus, I-Ideation, R-Ranking, E-Execution
   3. Crowd source feedback
3. System must allow for Ad Hoc Team Collaboration
   1. As people submit an idea, people can search the system to see if someone has a similar idea across the organization – can team up, combine efforts and areas of expertise
   2. Social hub of innovation within an organization
   3. Get better ideas – cross organizational efforts – collaborations that generate exciting ideas
4. Supports whatever your organization's process is for innovation
   1. Tool needs to match today's and even tomorrow's process
   2. Track ideas through the gating process your organization uses
   3. Follows phases of innovation used Lot of tools out there that force you to follow their process – be careful – you need a tool that follows your process.
5. Needs to support pausing ideas
   1. Difference between a good idea and really great idea is not about the idea. It's about the timing.
   2. Market, customer, organization, government regulation are not ready – lots of reasons.
   3. Key is you always need ability to pause the idea – capture it so that can pause and pull out an idea later when timing is right
6. Ability to issue challenges
   1. Don't run idea management system like an electronic suggestion box – ideas will become incremental
   2. For breakthrough ideas, issue challenges: carefully worded questions, problems, areas of interest put out to the general population with some form of incentive for spending time thinking about ideas/approaches that will answer or solve that in form of ideas
   3. Well constructed challenges (problem statement) generate wealth of good ideas
   4. Gets org thinking – signaling where the org is going, what the direction of org is

My Experience With These Tools

1. Without a system or tool, you are lost
   1. You have to treat them as a valuable asset
2. Don't restrict access to the tool
   1. Open it up to 100 percent of your organization
   2. You have to trust your employees
3. Promote your tool
   1. Get people to engage on the tool providing their feedback
   2. This becomes the mechanism by which ideas are trained and tracked
   3. Promote constantly and consistently
4. Close the loop with the idea submitters
   1. If someone submits an idea they need to hear back
   2. Give them feedback
5. Think about applying some form of gamification
   1. Make it fun
   2. Give them a point or scoring system

Core Attributes

Last June, I took over a new role as CEO where I set out a hundred day plan looking at the organization and figuring out what made it tick. I spent a significant amount of time doing one on one interviews with all the key stakeholders. I asked them four questions:

1. What should we preserve?
2. What should we stop doing?
3. What is it that you most hope I do?
4. What do you hope I do not do?

Ninety-five percent of employees were afraid that the new CEO would not change anything. They understood that in order for the company to flourish, some things needed to be changed. I realized that I had to build the core attributes from scratch. So, how do you do that? The key is to help everyone understand why core attributes are so important. What is it the team wants the organization to become? Core attributes articulate what you stand for. The ones we came up with are:

1. We need to be passionate
2. We think big and bold
3. We are fast and agile
4. We are a team
5. We unlock individual potential
6. We lead by example
7. We are resourceful

Once you have captured this, you are ready to start the process. Having the list is the beginning of the process. The senior executives must own this; this must always be controlled by the senior executives. We need to manage the process to get everyone on board with the innovation culture. It is communicating the process and communicating the core attributes. Instead of telling people these are the core attributes, we published them and invited people to come in as part of group sessions. We collected a list of core attributes employees liked and helped brainstorm recommendations to the executive team about how we could live it. We have included core attributes into our performance management. At the end of the year, employees are getting assessed on those core attributes. The impact on the organization was beyond anything I expected. It is not static and it is a never ending process, but it develops an effective framework for an innovation culture that drives success.