"One of the best business books of the year."
Harvard Business Review
A breakthrough in management thinking, "weird ideas" can help every organization achieve a balance between sustaining performance and fostering new ideas. To succeed, you need to be both conventional and weird.
A breakthrough in management thinking, "weird ideas" can help every organization achieve a balance between sustaining performance and fostering new ideas. To succeed, you need to be both conventional and weird.
These and other counterintuitive strategies will unlock ideas you never knew you had.
"One of the best business books of the year."
Harvard Business Review
Chapter 1: Why These Ideas Work, but Seem Weird
To invent, you need a good imagination and a pile of junk. Thomas Edison
The question is not what you look at, but what you see. Henry David Thoreau
I realized that my competition was paper, not computers. Jeff Hawkins, describing the key insight that led his team to design the Palm Pilot
I admit it. I call the novel ideas in this book "weird" to get your attention. After all, unexpected, even strange, management practices are more fun and memorable than bland old ideas. But there is another reason these ideas may seem counterintuitive: To innovate, companies must do things that clash with accepted management practices, with common but misguided beliefs about the right way to manage any kind of work. In company after company, managers act as if they can keep developing new products, services, and solutions by adhering to customary ways of managing people and making decisions. This happens even in companies where managers say that innovative work requires different practices than routine work. Yet these same managers continue to use methods that force people to see old things in old ways, expecting new and profitable ideas somehow to magically appear.
Last year, for example, I had a long conversation with an executive who wanted some ideas about sparking innovation in a multibillion dollar corporation in a mature industry. I can't reveal the company, but I can tell you it was a book publisher. Profits were falling, and so was the stock price. Wall Street analysts were complaining that the company wasn't innovative enough. This executive was exasperated because her company, especially the CEO, "hates taking risks," and she believed that other senior managers wouldn't back any program that might fail or distract people in the core businesses. She especially emphasized that any program that might further reduce quarterly profits would be unacceptable, even if it had long-term benefits. The CEO and other senior executives were convinced that the business practices they were using to do the company's routine work, the things they did to make money right now, could somehow generate profitable new products and business models.
These executives were dreaming an impossible dream. To build a company where innovation is a way of life, rather than a rare accident that can't be explained or replicated, people need to discard, and often reverse, their deeply ingrained beliefs about how to treat people and make decisions. They need to follow an entirely different kind of logic to design and manage their companies, even though it may lead them to do things that some people especially people focused on making money right now find to be counterintuitive, troubling, or even downright wrong.
Trying to spark innovation with methods that actually stifle it doesn't happen just in big, old companies. Entrepreneurs start new companies partly because they are purported to be more innovative, free from the pressures in established firms to follow ingrained precedents. Yet, after coaching start-ups for over 20 years, James Robbins finds that entrepreneurs can fall prey to ingrained habits just like managers in big firms. Long before it was a fad, Robbins was creating and managing new business incubators, including an Environmental Business Cluster in San Jose and in Wuhan, China, the Software Business Cluster in San Jose, the Panasonic Incubator in Santa Clara, and the Women's Technology Cluster in San Francisco The software Business Cluster has been especially successful since it was started in 1994. It has nurtured more than 50 new companies, which have attracted over $300 million in funding .
Robbins coaches the entrepreneurs in these incubators to build companies that generate, rather than stifle, new ideas. A sign in his office the only sign I saw says: The definition of insanity is doing the same thing over and over and expecting a different result. He posts it because so many entrepreneurs suffer from this kind of insanity, which makes it impossible to do anything new. These people are not crazy when they do the same thing over and over again, but expect to get the same result. That is the right way to manage routine work, to make the future a perfect imitation of the past. But repeating the same old routines again and again in pursuit of innovation is pure insanity.
Practices that are well-suited for cashing in on old, proven ways can make innovation impossible. To thrive and survive in the long term, companies must keep inventing (or at least keep uncovering) new ways of thinking and acting.
Organizing Principles for Routine versus Innovative Work
The difference between organizing for routine versus innovative work can be seen by contrasting "cast members" at Disney theme parks with the "Imagineers" at Disney Imagineering, the company's research and development facility in Burbank, California. The job titles are revealing metaphors for the two kinds of work. Cast members in theme parks follow well-defined scripts; Imagineers dream up wild ideas about new things that guests might experience. Whether they are dressed as Cinderella or Goofy, acting as guide on the Jungle Cruise, or sweeping the streets, precise guidelines are enforced to ensure that cast members stay "in role" when they are "on stage." This is Disney's routine work. In contrast, Disney Imagineering is a place where people are expected to keep trying different things, where creativity is the goal. As one former "Imagineer" put it: "You're encouraged to come up with all these great fantasies. Most of your ideas are never executed into reality. That is frustrating sometimes, but protecting the brand, creating compelling guest experiences, and telling great stories are important. The romance is still there. Where else are you asked to come up with wacky ideas for the next great ride for Disneyland!?"
Stanford's James March expresses this difference as: exploiting old ideas versus exploring new possibilities. Exploiting old ideas means relying on past history, well-developed procedures, and proven technologies to do things that generate money right now. Exploiting old ideas happens when McDonald's makes and sells a Big Mac hamburger. Billions of Big Macs have been made in the past, so unless they ask for something special, customers expect all Big Macs to look and taste the same. McDonald's goal is to use old knowledge to make the next Big Mac exactly the same as the last one.
March points out that, in the long run, no company can survive by relying only on established and proven actions. To make money later, companies need to try new things, to "explore" new possibilities. This means experimenting with new procedures, hiring new kinds of people, and inventing and testing new technologies. New ideas need to be invented (or imported) to satisfy customer demands, to enter new markets, to gain an advantage over competitors, or at least to keep pace. McDonald's uses some of the cash from all those Big Macs to explore new possibilities. The question is not whether McDonald's or any other company should do exploration or exploitation. It is silly to argue about whether a company should do only one or the other; it's like arguing over which is more important for an automobile, the engine or the transmission, or which you need more, your heart or your brain. Both are necessary for moving forward. The real question is what proportion of the firm's time and money should be spent on which.
Like other companies that have performed well over the long haul, McDonald's experiments with new ideas. At their Core Innovation Center near Chicago, for example, they constantly try new products, new ways of cooking old products, new ways of queuing customers, and different ways of organizing work in their fully functioning kitchens. Similar labs generate and test ideas for new products in other countries where McDonald's establishments are located. At the moment, for example, McDonald's is experimenting with a technology for cooking their famous fries in about 65 seconds rather than the current 210 seconds. And experiments don't happen just in corporate labs; the Big Mac was invented and tested in 1967 by Jim Delligatti, who operated a dozen stores in Pittsburgh. Other experiments have also been successful, like the McHuevo (poached egg hamburger) in Uruguay, Vegetable McNuggets in India, and the "Made for You" innovation in the United States, where, instead of being kept warm until it is purchased, every sandwich is quickly assembled after it is ordered. But the majority fail, like the McLean hamburger in the United States and a cheese and pickle sandwich tested in Britain called the McPloughman's.
My weird ideas spark innovation because each helps companies do at least one of three things: (1) increase variance in available knowledge, (2) see old things in new ways, and (3) break from the past. These are the three basic organizing principles for innovative work, but as the table shows, the opposite principles are right for routine work. This contrast is not only essential for understanding where I got my weird ideas and why they work, it is also essential for understanding why so many managers unwittingly use flawed practices that fail to spark innovation.
Variance: "A Range of Differences"
Companies where people want to do things in proven ways are wise to drive out variation. This mostly means doing old things in time-tested ways. This is why total quality management experts emphasize that driving out errors, reducing costs, and increasing efficiency of existing products and services requires driving out variation in what people and machines do. This is why Intel, which has dominated the semiconductor industry largely through its manufacturing prowess, uses a technique called "Copy Exactly." When Intel managers agree that something is a good idea, there is a religious fervor about implementing it in an identical way in every Intel factory throughout the world, down to the color that things are painted. It is also why General Electric's CEO Jack Welch has made a fetish out of "six sigma," the quality control regime that aims to reduce variance down to one error in every one million repeated processes.
Driving out variation makes sense when organizations do proven things in proven ways that still work. The exact steps for manufacturing a computer chip at Intel are known in great detail, as are the steps for flying an airplane, doing simple surgical procedures like hernia repairs, or operating a ride at Disneyland. Straying from proven ways is rarely a creative act in such cases; rather, it is a sign of poor training, lack of attention, incompetence, substance abuse, or stupidity. For example, the captain of Aeroflot Flight 593 who broke the rules by giving his children a flying lesson in midflight was stupid, not creative. He first let his daughter fly the plane, then he gave his son a chance. Unfortunately, this 15-year-old boy made an error with the yoke, the plane stalled, and went into a dive that his dad could not reverse. All 75 people on board were killed. When people are flying an airplane or assembling a Toyota Camry, there are enormous advantages to following proven methods. Safety is one of them! Companies that use tried-and-true methods are not only usually safer, they do things faster, cheaper, and more consistently than those that rely on new and unproven knowledge.
When innovation is the goal, however, organizations need variation in what people do, think about, and produce. What might be called errors and mutations in a system meant to do old things in old ways are the lifeblood of innovation. People need to constantly find and produce new ideas, which, like mutations in plants and animals, often fail to endure and spread. The notion that diversity, new combinations, and mutations of existing forms are required for creating new forms is, of course, inspired by Darwin's theory of evolution. The biologist Stephen Jay Gould explains why amplifying, rather than dampening, variation leads to excellence in social systems, not just biological systems.
Excellence is a range of differences, not a spot. Each location on the range can be occupied by an excellent or an inadequate representative and we must struggle for excellence at each one of these varied locations. In a society driven, often unconsciously, to impose a uniform mediocrity upon a former richness of excellences...an understanding and defense of full ranges as natural reality might help stem the tide and preserve the rich raw material of any evolving system: Variation itself.
Hundreds of behavioral scientists have borrowed and modified Darwin's theory of evolution. One of the most robust findings in this vast literature is that variance in people, knowledge, activities, and organizational structures is crucial to creativity and innovation. Research by Dean Keith Simonton shows that the success of individual geniuses like Mozart, Shakespeare, Picasso, Einstein, and Darwin himself, is best understood from an evolutionary perspective, where excellence results from "a range of differences." These famous creators generated a wider range of ideas and completed more products than their contemporaries. They didn't succeed at a higher rate than others. They simply did more. So they had both more successes and more failures. There are renowned geniuses who defy this trend, but they usually have less impact than their more productive counterparts. The great artist Vermeer created fewer than 50 paintings in his lifetime, all in a similar style. He achieved a singular excellence that, despite the stunning beauty of his art, adds something less than Picasso's astonishing range and history-changing influence.
Research on groups and organizations suggests that variation is just as important to collective creativity. New ideas are generated when groups and organizations have people who act and think in diverse ways, express diverse opinions, are connected to diverse knowledge networks outside the organization, and store and constantly make use of diverse technical knowledge. The belief that innovation depends on a broad palette of ideas was around long before academics started studying innovation. Thomas Edison remarked that inventors need "a pile of junk." His West Orange laboratory had a "well-stocked storeroom and a collection of apparatus and equipment left over from previous experiments" that included "machine tools, chemicals, electrical equipment, loads of supplies not only lengths of steel and pipe, but rare and exotic materials such as seahorse teeth and cow hair." This "big scrap heap" provided the raw materials that Edison and his staff used to invent new things.
An evolutionary perspective means that variation is essential because, to find a few ideas that work, you need to try a lot that don't. This is why scientific research mostly consists of trying things that fail. As Susan Greenfield, a renowned British neuroscientist, put it, "Safe is a word that goes much better with sex than science." A similar philosophy helps explain the success of Capital One, which has been called the the most innovative credit-card company in the world. Just a few years ago, all credit cards were pretty much the same; you could have whatever you wanted as long it cost $20 per year and had an interest rate of 19.8 percent! Capital One has been the leader in offering thousands of different credit cards, with varying rates, and limits, which are targeted at people with different beliefs, hobbies, and affiliations: "They tinkered with credit lines, mileage awards, with the design of the cards, and with the color of the envelopes of their mailings. They tried different ways of retaining customers and pursuing deadbeats. Essentially they made Capital One an endless experiment." The company tried about 45,000 experiments in the year 2000, for example. Capital One has succeeded by targeting smaller and smaller audiences for these experiments, like a "platinum MasterCard for middle-income hikers who drive Saturn automobiles." Most of these ideas fail, but the constant experimentation with one variant after another, and constant learning, are big reasons why Capital One has over 30 million credit-card accounts.
The story is the same in the toy business. Brendan Boyle is founder and head of Skyline, the toy design studio at IDEO, a product design firm in Palo Alto, California. Boyle provides compelling evidence that innovative companies need a wide range of ideas and that success requires a high failure rate. Boyle and his fellow designers keep careful track of the ideas they generate in brainstorming sessions and informal conversations, and that just pop into their heads. Skyline keeps close tabs on its ideas because it sells and licenses ideas for toys that are made, distributed, and marketed by big companies like Mattel and Fisher-Price. Boyle showed me a spreadsheet indicating that in 1998 Skyline (which had fewer than 10 employees) generated about 4,000 ideas for new toys. Of these 4,000 ideas, 230 were thought to be promising enough to develop into a nice drawing or working prototype. Of these 230, 12 were ultimately sold. This "yield" rate is only about one-third of 1 percent of total ideas and 5 percent of ideas that were thought to have potential. Boyle pointed out that the success rate is probably even worse than it looks because some toys that are bought never make it to market, and of those that do, only a small percentage reap large sales and profits. As Boyle says, "You can't get any good new ideas without having a lot of dumb, lousy, and crazy ones. Nobody in my business is very good at guessing which are a waste of time and which will be the next Furby."
Not all innovative businesses require or can survive such a high failure rate. Venture capital firms have lower, but still substantial, failure rates. Between 10 percent and 30 percent of the start-up firms that receive funds from top Silicon Valley venture capitalists yield big financial returns, and the majority fail. The optimal failure rate depends on the industry and technology, but all innovative firms keep importing, remembering, and trying a wide range of new things; they reach a lot of dead ends, and keep learning from their successes and failures. Variation is a hallmark of companies that are continuously creative, that keep coming up with exciting new ideas, products, and services that leave competitors running back to the drawing board to copy them, or wondering, "Why didn't I think of that?"
Another way to get varied ideas is to work with diverse people. The BrainStore is an "idea factory" in Biel, Switzerland, using a network of teenagers to generate solutions to clients' problems. Cofounder Markus Mettler says, "We're not looking for average ideas. We're looking for crazy ideas. We use kids to find those ideas, because they know how to talk without their thinking getting in the way." Mettler's cofounder, Nadja Schnetzler, adds that the company blends "the professionalism of experts with the unbridled enthusiasm of kids." They assign 17-year-olds to work on products and advertising campaigns for companies like Nestlé and the Swiss Railway. By mixing the ideas of experts and novices, of young and old people, this company increases the diversity of solutions that can be generated for clients.
Any group can spark innovation by broadening "the range of differences." This first organizing principle is part of many quality programs, especially in brainstorming sessions and experiments used by quality-improvement teams. Even when companies want new ideas about how to drive out variation in established processes like manufacturing cars and running hotels, they increase variance in the ideas generated, considered, and tested. Most work involves some blend of routine and innovative tasks; the weird ideas in this book are meant to help people, teams, and companies better understand the difference and do a better job of switching between the two kinds of work.
As I show in the next chapter, creative firms don't just have diverse knowledge, but they keep trying to find different uses for it and trying to combine it in new ways. That's one of the main reasons my 11 1/2 weird ideas work; each of these counterintuitive practices brings a broader range of ideas into a company.
Vu ja de: Seeing Old Things in New Ways
The second organizing principle is seeing the same old thing in new ways, or the "vu ja de" (pronounced "voo-zha-day") mentality. If déjà vu is the feeling that you have had an experience before even though it is brand new, then vu ja de is what happens when you feel and act as if an experience (or an object) is brand-new even if you have had it (or seen it) hundreds of times.
The vu ja de mentality is not always a good thing. It can be a disaster when, as the result of stress, confusion, poor training, or sheer incompetence, proven techniques are forgotten when the stakes are high. Organizational theorist Karl Weick uses the term vu ja de in this pejorative way. He shows how a group of 19 experienced smoke jumpers (firefighters who parachute into remote areas) responded to the stress of a fast-moving fire in Mann Gulch, Montana, by forgetting what they knew. These skilled and experienced smoke jumpers were so distressed by their group's disorganization and the threat of death that they acted as if "I've never been here before, I have no idea where I am, and I have no idea who can help me." Thirteen of them died. But Weick's example is a case where mostly routine work was needed, not innovation.
The very thing that can kill a smoke jumper, or an airplane pilot, can save a worker who needs to be innovative. The vu ja de mentality can breed learning and creativity. I first heard the term in the 1980s from Jeff Miller, who has won numerous sailing championships. Miller argued that great sailors have a vu ja de mentality where "the same old stuff seems brand new" because it enables "you to keep learning small lessons from every race" and it "keeps you excited about the sport." Jeff's funny and insightful comment made me realize that innovative people and companies have this same ability. They can keep looking at the same thing but keep changing which aspects they think about and which they ignore.
Miller also has a Ph.D. in biochemistry. Perhaps he is taking a cue from Nobel Prize-winning biochemist Albert Szent-Gyorgi, the first scientist to isolate Vitamin C, who said: "Discovery consists of looking at the same thing as everyone else and thinking something different." Statistician Abraham Wald's research on where to put extra armor on warplanes during World War II is a wonderful example. The British and U.S. air forces were concerned because many of their planes were being shot down. They wanted to use more armor, but were not quite sure where to put it. Wald put a mark on every bullet hole in the airplanes that returned from battle. He found that two major sections of the fuselage one between the wings and the other between the tails had far fewer bullet holes. He decided to put the armor in these places, where he saw fewer, not more, holes. Why? Because it stood to reason that the planes were hit randomly. The planes he analyzed had not been shot down! So it was the holes he wasn't seeing in the planes that weren't returning that needed extra protection.
A similar kind of vu ja de mentality is seen in innovative high-technology firms. Bill Joy is Sun Microsystems' resident technical genius. Joy was one of the primary designers of the UNIX operating system and of some of the most crucial chip sets in Sun's microprocessors, and other advances that enabled the Internet to reach its current technical sophistication. Joy has been hailed as "the smartest man in Silicon Valley" (although he lives in Colorado!) and the "Edison of the Internet." He is famous for seeing technical problems in a different light than others, for his "late-night programming epiphanies, way-outside-of-the-box thinking, and uncanny technical clairvoyance." This goes back to his student days. Most students look for Ph.D. programs that have the best possible equipment, especially in technical fields like computer science. In contrast, Joy reports, "I went to Berkeley [rather than Caltech or Stanford] because it had the worst computer facilities of the three. I figured it would force me to be more ingenious."
Vu ja de can also be a cultural characteristic of groups and companies. People can learn the vu ja de mentality; they don't have to be born with it. For example, although well past his 80th birthday, Ettore Sottsass remains one of the most famous and prolific of Italian designers. Sottsass rose to fame as an industrial designer for Italian firms, including Olivetti and Alessi, as well as a sculptor and photographer, and is a founding member of the Memphis Design Group. In 1980, he and several young designers formed Sottsass Associates in Milan, Italy. They have taken a radical approach to designing everything from an electronic telephone directory and a golf club and resort in China, to robots, the interior of an airport in Milan, televisions, telephones, prefabricated windows, and the interior of a New York City apartment. The hallmark of their philosophy is that, while most modern designs are meant to be bland and rational, to be functional without being noticed, the things we use and see in modern life should provoke strong feelings. Their view is that a strong reaction, even if it is negative, is far better than none at all, that it is better to feel alive than numb and lifeless.
Sottsass Associates uses unusual colors, shapes, and sizes to jar people out of the numbness of modern life. Sottsass teaches his colleagues to see things differently by using his own work as a source of inspiration, like the much-talked-about and commercially successful "Valentine" portable typewriter he designed for Olivetti in 1969, which was the color of bright red lipstick. Sottsass also gives explicit guidance, for example, by suggesting that his colleagues' designs "look stranger," by using colors and shapes that provoke discomfort rather than contentment.
The vu ja de attitude is also evident at BrightHouse, an "ideation company" that charges clients like Coca-Cola, Hardee's, and Georgia Pacific $500,000 to $1,000,000 for a single idea. Founder Joey Reiman rejects the taken-for-granted assumption that doing things faster is always better. He brags that BrightHouse does "business at the speed of molasses." He emphasizes that you can't rush great ideas. "I tell our clients that we're the slowest company they'll ever meet and that we're the most expensive." BrightHouse works on only one idea at a time, with everyone in the small company (about 20 people) devoting two to three months to creative approaches for the single client they are serving. Reiman developed this way of working after running a conventional advertising firm for many years, which led him to believe that most of the work done was so rushed and there were so many different clients to keep happy that creativity was stifled. BrightHouse has had impressive results. Reiman and his team helped the giant fragrance house Coty Inc. to create "ghost myst," the first perfume to embrace values and spirituality ("inner beauty" rather than physical beauty) as the focus of its market positioning. Ghost myst became the best-selling fragrance of 1995, and it launched a spirituality-in-beauty movement that many other fragrance and cosmetics companies have rushed to join. BrightHouse's competitive advantage is that they are a thoughtful tortoise in a world filled with speedy hares. When you move more slowly than everyone else, the same old things look different to you, and you can think about them in different ways.
No matter how it is accomplished, the vu ja de mentality is the ability to keep shifting opinion and perception. It means shifting our focus from objects or patterns that are in the foreground to those in the background, between what psychologists call "figure" versus "ground." It means thinking of things that are usually assumed to be negative as positive, and vice versa. It can mean reversing assumptions about cause and effect, or what matters most versus least. It means not traveling through life on automatic pilot. Many of the weird ideas in this book are about how to make the vu ja de mentality a way of life in a company.
Breaking from the Past
There is a lot of hype in the business press about the dangers of clinging to the past, and much of it is justified. But all the excitement about building better products and companies can make us forget that most new ideas are bad and most old ideas are good. After all, that is what Darwinism predicts. The death rate of new products and companies is dramatically higher than old ones. Dozens of new breakfast cereals fail every year, while Cheerios and Wheaties persist. Hundreds of new toys are introduced every year, yet most are flops. Even toys that are wildly popular for a while, like the Furby or Beanie Babies, fade from the scene, while Play-Doh persists. If there was truth in advertising, the slogan "innovate or die" would be replaced with "innovate and die." Tried and true wins out over new and improved most of the time.
My aim is not to convince you to discard every routine your company uses and to devote all efforts to inventing new ways of thinking and acting. On the contrary; doing routine work with proven methods is the right thing to do most of the time. It is wise to manage much of the time as if the future will be a perfect imitation of the past. Hospitals want surgical residents to perform operations exactly like their experienced mentors. Airlines want new pilots to fly a 747 just like the experienced pilots who came before them. McDonald's wants each new trainee to make every Big Mac just as it has always been done.
Does this mean that you should stop trying to innovate? Not at all. The problem is that the world does change, new technologies are developed, competitors come up with superior products and services, and consumer preferences change. These are the times and places when innovation is crucial, when the ideas in this book can help you and your company. Many companies have made a lot of money by creating new and better futures. So, although it usually entails a high failure rate and a lot of resources, every company or at least part of it needs to keep trying to discard old ways and replace them with better new ways.
For example, tea bags had always been square since they had been introduced in 1951 to British consumers; no one ever thought of changing the shape. Then, in 1985, Lyons Tetley, one of the leading makers of tea bags in the United Kingdom, began doing research on consumer reaction to round tea bags. Research by Tetley's marketing research firm, Mass Observation, showed that group after group of consumers had a strong preference for the round bags. After an initial marketing blitz in the south of England, Tetley went national with its round bags in January of 1990. Tetley's share of the English tea market rose from 15 percent to 20 percent, slightly behind PG Tips. Not to be outdone, PG Tips launched its own, highly secretive efforts to develop tea bags in a new shape. The result was the PG Tips Pyramid tea bag, which has a 3-D shape that is said to mirror the brewing process in a teapot and to make the brewing process faster than the traditional square (or less traditional round) tea bag. PG Tips introduced their new bag in 1996 and soon reported that sales of Pyramid tea bags had eclipsed Tetley's round bag in many regions. The shape of tea bags didn't change for 34 years until these researchers saw the same old thing in a new way vu ja de!
Young industries and companies can cling to the past just as tightly as old ones. People form vehement beliefs quickly, often on the basis of flimsy or flawed evidence. Worse yet, once most people start acting in a certain way often without even realizing it they persist even when presented with evidence that what they are doing is ineffective. This pattern, which psychologists call mindless behavior, happens to companies as a whole. Before the Palm Pilot was invented, for example, product after product developed in the hand-held computer industry failed. Palm Computing, along with half a dozen other companies including Apple, Slate, Go, and Sharp, introduced failed hand-held computers in the 1990s. Palm's first product was called the Zoomer. It was crammed with features just like its competitors'. Palm's competitors responded to slow sales by developing hand-held devices that had even more features, that were more like customers' personal computers. They clung tightly to their ingrained belief that customers wanted an imitation of their personal computers, with as many of the same features as possible. In contrast, after talking to customers, Palm's Jeff Hawkins decided that his industry was operating under a flawed assumption. He realized that "my competition was paper, not computers." The rest is history. By seeing the same problem in a new way, Palm was able to discard flawed beliefs and invent one of the best-selling consumer electronics products of all time.
To break from the past, a company needs varied ideas and vu ja de, which provide the raw material and right attitude. But that is just part of the story. As you will see, my weird ideas help companies break from the past through other means as well.
The Weird Ideas
Table 2 shows 12 (really, 11 1/2) pairs of contrasting practices: The left side lists familiar and conventional management practices for hiring and managing people, making decisions, dealing with the past, and interacting with outsiders. These practices help companies do routine work by driving out variance, seeing old things in old ways, and replicating the past. You probably aren't surprised, and may be bored, by recommendations that companies should hire people they need, use old-timers to indoctrinate newcomers, reward success and punish failure, think of some practical things and plan to do them, replicate past successes, and so on.
Things get more interesting, however, when you realize that these practices most of which are widely accepted as right for managing any kind of work are drastically different from my 11 1/2 weird ideas for sparking innovation (on the right-hand side of the table). Indeed, most are the exact opposite of practices that are well suited for routine work. These weird ideas work because they help increase variance in knowledge, help people see old things in new ways, and help companies break from the past. These weird ideas also work because each is grounded in sound academic theory and research. I combed through existing academic writings to support (and refute) my emerging ideas, to get inspiration for more ideas, and to make them more powerful to use and more fun to talk about. I also did original research on these weird ideas, and talked about them constantly with students and colleagues at Stanford University and elsewhere.
But that wasn't enough. I wanted to develop ideas that people could actually use. So I picked weird ideas for this book that had actually been used, in some form, by real companies. I also gave ever-changing versions of my "Weird Ideas Talk" to over a hundred groups of senior executives, managers, engineers, scientists, lawyers, and other professionals during the last decade. I goaded each group to argue with me about the ideas and point out flaws. They offered constructive criticism, told me how the weird ideas were already used in their companies, and suggested their own strange practices. The result is that the weird ideas in this book have both sound academic and practical underpinnings.
Why These Ideas Seem So Weird
The 11 1/2 weird ideas developed in this book are based on sound theory and evidence. Many are used in companies where innovation is a way of life. But the question that I raised at the outset of this chapter hasn't been answered yet and may seem even more puzzling if you believe that these ideas work: Why do these ideas strike so many people as weird? One reason, as I confessed, is that I made them sound weird to engage and amuse you. But that doesn't explain why I could generate so many well-supported ideas that strike so many people as strange, even downright wrong, at least at first. It also doesn't explain why people in so many companies reject these and other sound ways to spark innovation, regardless of how blandly the ideas are described.
There are several reasons that the 11 1/2 conventional ideas are treated as good generic management practices, as the right thing to do under all circumstances. For starters, people almost everywhere believe that making money is good and losing it is bad. Yet, in most companies, most of the time, generating and testing ideas is something that loses money right now. The only way to make money right now is by repeating a proven service or making a proven product over and over again. There are exceptions, including firms that commodify creativity, such as advertising agencies and design firms. For the most part, however, people who do and manage routine work who use the practices on the left side of the table have more influence and prestige in their companies than people who do innovative work. After all, they make money while those mavericks keep losing it! There are companies like 3M and Novartis (a Swiss pharmaceutical company) where people who generate ideas have substantial power, but these are exceptions.
To make matters worse, most companies use the same standards for evaluating both routine and innovative work. They use conventional idea #6: Reward success, punish failure and inaction. This is fine for routine tasks. When known procedures are used by well-trained people, failure does signal improper training, weak motivation, or poor leadership. But applying this standard to innovative work stifles intelligent risks. The usual reward scheme means that, because people who do routine work succeed most of the time, they are glorified as winners. In contrast, people who do innovative work fail a lot. So they not only get few rewards, they may be denigrated as losers. In many companies, people who do routine work complain that "if those creative types just acted more like us, they would be more efficient and wouldn't make all those mistakes!"
Finally, my ideas seem weird because companies don't use them very much compared to the conventional practices. Most companies devote the lion's share of their people and money to supporting routine rather than innovative work. The right balance between exploration and exploitation varies across industries. But even in companies that are much ballyhooed for innovation, only a small percentage is usually devoted to generating and testing new products and services. The percentage of corporate budgets devoted to research and development (R&D) versus more routine tasks like manufacturing, marketing, and finance is one indicator of this imbalance. This is a crude measure, as there is routine work in R&D, and innovation elsewhere. But it is instructive. Most public companies spend less than 2 percent of their annual budgets on R&D. Even companies renowned for innovation, like IBM, Lucent, Hewlett-Packard, Siemens, Xerox, and General Electric, rarely spend much more than 5 percent or 6 percent. William Coyne, 3M's former vice president for R&D, points out that 3M's financial success depends largely on new products, but most of what 3M's people do (and most of what 3M spends money on) are activities like manufacturing and marketing, which enable them to cash in on these new ideas. In 1999, over 30 percent of 3M's sales revenue was from products less than four years old, but the R&D budget was 6.6 percent of sales, a ratio that has held fairly constant over the past five years. If you consider parts of these companies that do path-breaking work, such as research labs, the percentage is far lower. Xerox PARC in Palo Alto is famous for inventing many of the technologies that made the computer revolution possible, everything from bit-map displays to pull-down menus to laser printers. Yet Xerox has never spent more than one-third of 1 percent of its budget to support PARC's activities in any year.
This comparative rarity helps explain why practices that support innovation may seem odd and provoke discomfort, and why managers hesitate to use them even when they should. Study after study shows that, independent of other factors, the more people are exposed to something the more positive they feel about it, and the less they are exposed to something the less positive they feel about it. This "mere exposure effect" has been found for "geometric figures, random polygons, Chinese and Japanese ideographs, photographs of faces, numbers, letters of the alphabet, letters of one's own name, random sequences of tone, food, odors, flavors, colors, actual persons, stimuli that were initially liked and initially disliked stimuli." This effect is found when people have no idea it is happening and deny that it is happening. It is found in all populations and all cultures, even in prenatal research on fetuses. One of the most interesting studies
asked subjects which of two photographic prints of their [own] faces they liked better a normal or inverted print. The inverted prints portray people as they see themselves in the mirror, whereas the normal prints portray people as other people see them. Predictably, the subjects preferred the inverted prints of themselves, but the normal print of their friends.
The Best Way to Learn from the Weird Ideas
So how can you avoid getting trapped in routines that smother innovation? The best way to learn from this book and from other counterintuitive ideas is to keep asking yourself: What if these ideas are true? How might I help organize or manage my company differently to make it more innovative? How should I act differently to make myself more creative? My ideas are designed not only to provoke readers to try them; I want to provoke you to imagine and try your own ideas about sparking innovation, especially ideas that clash with the accepted dogma in your company or industry.
Play with these ideas in your mind and experiment with a few in your company. Treat them like toys that you might buy to mess around with: Try to break them, try to take apart the pieces to see how they work, try to improve them, and mix them (or parts of them) with your other toys. I offer these ideas not as immutable truths, but as methods that have helped other companies produce beautiful and profitable mutations, and that just might help your company as well. These are ideas about building innovative groups or businesses in any company, or about injecting innovation in companies that focus on exploiting tried-and-true ways. Even if your group or business thrives by doing mostly routine things, many of the practices here can still help you and your colleagues switch cognitive gears for a while, so you can learn some new things, see old problems in new ways, and break from the past.
One big question remains before the journey through the 11 1/2 weird ideas can start, before I show why each one works, how it is already used in companies to spark innovation, and how it might be used in your workplace. I've talked about the importance of creativity, but I haven't said what it means. As the next chapter shows, much of the mystery about what it takes to build an innovative company disappears when you realize what creativity entails.
Copyright © 2002 Robert I. Sutton
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