The Innovators DNA Summary

The Innovators DNA Summary
Mastering the Five Skills of Disruptive Innovators
by Jeff Dyer, Hal Gregersen and Clayton M. Christensen

In a Tweet

Innovators think differently, but as Steve Jobs put it, they really just think different by connecting the unconnected. (click to tweet)

---

In Two Minutes

If you want your company to succeed at innovation, your top management team must show excellent creativity skills.

Great Innovators use the five “skills that compose their Innovator’s DNA.”

1. Practice Associative Thinking by making connections of that which seems unconnected


2. Ask Questions: don't be afraid looking foolish.


3. Observe: what, how and why people do things


4. Network with people from diverse backgrounds.


5. Experiment: break things simulate and build new models

---

The Innovators DNA Summary

The Essence of Innovation

Studying innovators reveals a pivotal lesson: While innovation comes more easily to some people than to others, innovation and creativity are not birthrights. Creativity is a learned skill. Since you generate innovation through your actions, you can learn to be more creative by focusing your time and efforts in that direction.

At the executive level, innovative entrepreneurial CEOs spend 50% more time engaged in “discovery activities” – such as experimentation – than entrepreneurs who do not innovate. Different stages in the life cycle of a business can foster this difference in emphasis: A start-up may need innovative thinking more than a mature firm. As an organization grows, its leaders may come to prefer the reliable delivery of known goods to the discovery of new ones, but innovation remains relevant to the growth of a company at any stage.

To enhance your ability to innovate and act creatively, use the same five “discovery skills” that compose the “DNA of disruptive innovators”: “associating, questioning, observing, networking and experimenting.” Associating – that is, connecting ideas from disparate arenas – is the most important; the other four skills “trigger associational thinking” and support creativity, which lead to innovative business ideas. Every innovator employs a different blend of these skills:

— Associating

Innovators combine elements of various ideas and practices that other people don’t put together. They draw connections that cross boundaries, linking concepts from one discipline or culture with those from another. Albert Einstein called this process “combinatorial play” and saw it as foundational for creative thinking. Innovators make odd combinations by seeing a finer level of detail than most people and by stepping back to view the big picture.

Build the habit of associational thinking through training, travel and exposure. Indra Nooyi, chairman and CEO of PepsiCo, played sports (cricket) and music (rock guitar) when she was young. She studied math, physics and chemistry as an undergraduate, and she earned an MBA and a master’s of public and private management. She worked in the textile, consulting and energy industries. Her diverse résumé is the perfect foundation for an innovative mind-set. To build your associative skills, try “forced association,” linking objects that don’t logically fit together. Use metaphors to highlight associations. Assemble a “curiosity box” of random items and try to relate them to jump-start your creativity. Handle creativity-related problems with the “SCAMPER” method: “Substitute, combine, adapt, magnify, minimize, modify, put to other uses, eliminate, reverse and rearrange” the problem’s elements as you seek a solution.

— Questioning

Innovators ask questions. They challenge conventional wisdom by asking why the essential nature of something is what it is and what caused it to be that way. They follow-up with why and why-not questions: Why can’t we do this differently? Why isn’t this feature available? Why has no one tried this before? Never worry about looking foolish. If you don’t know something, ask.

Consider Edwin Land. His three-year-old daughter asked him why the picture he’d taken of her wasn’t available immediately. This led Land to wonder if developing photographs instantly was possible, a question that led to the invention of the Polaroid camera. Innovators ask hypothetical questions: What if X were true? Or they impose hypothetical constraints: What if we could not do Y? Such constraints drive creative solutions. To encourage team members to embark on a round of open-ended “QuestionStorming,” ask what-if questions such as, What if price were no object? Ask better questions through conscious practice. Look for patterns or categories of inquiry. Try to find obscure questions no one has asked.

— Observing

Innovators examine everything. They pay attention to how things work, to what doesn’t work and why. Innovators study how people solve problems. They find “common threads” in activities that may seem unconnected at first. Seeing a family crowded onto a scooter in the rain inspired Ratan Tata, chairman of India’s Tata Group, to manufacture the Tata Nano. He used futuristic auto building methods to create a groundbreaking, inexpensive car. Tata sent out an investigative team to learn how and why people bought scooters, seeking information that would help the firm introduce its new car. Based on these observations, Tata extended its operations to include car financing, insurance and driving instruction to meet the demands of this target audience.

When you are observing, closely watch how people do a task to see if you could improve the process. Any job has “a functional, a social and an emotional dimension,” but the role of each aspect varies from job to job. Notice how different people do the same job in different contexts. Try to spot people who have developed creative “workarounds” to solve problems. A workaround is often an innovative way to resolve a particular frustration. Also, pay close attention to the way people buy your product. Note what frustrates your customers about purchasing or using it, where they need help and what makes them abandon it in favor of a competing product. Heighten your powers of observation by changing your environment. Shift your focus: Watch workers, then customers, then entire organizations. Enhance your observational skills by documenting the how and why of failed innovations.

— Networking

Many people network to advance their own careers or to increase their productivity. Innovators network for other reasons. Rather than targeting people like themselves and trying to reach them with tried and true methods, innovators network to learn new information and to draw lessons from other fields. Innovators make a point of meeting people whose lives and training give new and different perspectives. This is one way to “build a bridge into a different area of knowledge.” Innovators look at different disciplines that solved similar problems and borrow from their ideas.
Travel builds bridges to multiple perspectives; living abroad builds even more. Many innovators seek forums or events that promote interdisciplinary discussion and creativity, like the Technology Entertainment and Design (TED) conferences. These gatherings bring experts and interested thinkers together to discuss topics that intersect with several of the forum’s broad, complex fields. Attend a conference outside your field, or join a networking group for innovation. Eat lunch with new people, or invite outsiders to join your group to add new perspectives.

— Experimenting

When you say “experiment,” people imagine scientists in labs. But innovators use the entire world as their laboratory. They repeatedly test, develop and rework ideas, which is essential to bringing innovations to fruition. Experimentation is rarely the start of innovation. More often, innovators see a possibility or ask questions about why some process or device functions as it does, and then they experiment to test it. For example, in 1994 Jeff Bezos spent time considering the rapid growth of the Internet – 2,300% annually at that time. He followed up with questions about what sort of business would make best use of the Internet’s exploding commercial potential. Once he started Amazon, Bezos experimented with new ways to sell innovative products, such as the Kindle. This was a natural extension of his lifelong habits. As a child, he tried to take apart his crib. As he got older, he built toys and helped his grandfather with repairs at his family’s ranch.
Innovators can experiment in at least three ways: They can seek new experiences, like taking a class on an unfamiliar topic; they can take things apart to see if they can improve them, as Michael Dell did when he got his first computer; or they can build prototypes or models to test new ideas. People who conduct such experiments share a similar mind- set. Rather than embarking on experiments designed to reach a specific goal or outcome, they use open-ended testing and pursue its outcomes to see what else they can learn.

Experimentation is closely linked to the other discovery skills of innovation. If you ask more and better questions, pay close attention, and consult people from different fields, you will need fewer experiments to develop your product. To improve experimentation, cross the usual borders, both literally – through travel – and metaphorically – by exploring a new discipline or topic. Learn new skills. Build models and try simulations. Blend experimentation with observation by trying to spot new trends.

Innovative Organizations

“People, processes and philosophies” define innovative organizations. These three factors fit together in a “3P framework,” where each element supports and shapes the others:

1. People

For your firm to do well at innovation, your leading executives must be skilled in creativity, and offer a model of creative, “discovery-driven” behavior and hire like-minded people. These leaders are aware of the skills they have and the skills they lack. For example, eBay founder Pierre Omidyar knew he was stronger at discovery than at execution, so he brought Stanford MBA Jeff Skoll into the firm for balance. Innovative firms assemble teams with “complementary discovery skills” – for example, pairing an insightful observer with a talented experimenter. Team skill requirements vary according to the team’s stage in the innovation process: Some growth phases emphasize discovery, while others focus on delivery and implementation. The design firm IDEO hires people whose knowledge is “T-shaped” – deep in one area and extending across a broad range. When IDEO evaluates innovations, it brings three realms of ability to bear: business, to rate markets and profits; technological, to test feasibility; and professional, to offer knowledge-based services.

2. Processes

Innovative organizations are systematic about developing and following discovery processes. Organizational discovery procedures generally mirror the steps people take: groups observe, question, associate, and so on. This often starts with the leader’s behavior. For instance, Steve Jobs repeatedly asked why and what-if questions and led others at Apple to do the same. Innovative organizations systematically seek people who have already developed new discoveries and are eager to continue to innovate. Virgin and Google both explicitly recruit people who think differently, and both need job applicants to display creativity. Innovative organizations extend their discovery processes to an institutional level. For example, instead of just hoping that their employees network, Google and Procter & Gamble swapped staff members for a few weeks so they could see how the other company worked and experience each other’s processes. Some firms have contests or tournaments in which people outside the organization give or build ideas, sometimes in response to specific challenges. Innovative companies offer materials, time and funding for prototyping.

3. Philosophies

Forward-looking firms believe “innovation is everyone’s job.”While most companies focus on incremental change, these firms invest heavily in “disruptive innovation.” They set up project teams that mobilize a range of talents and training to strike out in new directions. And they understand the importance of taking the “smart risks” that lead to innovative discoveries. Innovative firms communicate the necessity of innovation throughout their organizations by actions, reward systems and educational campaigns. Innovative leaders encourage people to experiment and give staffers a “safe space” to explore ideas. They probe for questions, praise employees for using discovery skills and provide time for people to innovate. Google’s policy of allowing employees to spend 20% of their time on their own projects is a well-known example of this policy.

The innovation process can be scary. You set out to disrupt the status quo with no guarantee that you’ll get the results you want. But the benefits of innovation are undeniable. Start today by assessing whether your discovery skills are strong or weak. Then, “identify a compelling innovation challenge that matters.” Practice your skills and find a coach to support your efforts. Develop your creative abilities by helping others develop theirs.

 Featured Image is property of Tam School of Scandal

As One Summary: Individual Action, Collective Power

This is a As One Summary.
You can find the full reviews on it's Amazon page.

In a Tweet

Successful organizations align 1 of 8 leadership styles for different strategic goals. {tweet this}

In 2 Minutes

Management consultant Mehrdad Baghai and former Deloitte global CEO James Quigley, writing with top Deloitte managers, relate widely diverse stories to show how leaders interact with followers. They draw eight leadership models of collaboration – each of which is proven to work in the right circumstances, and each of which can be applied to organizations today.

Leaders and followers should work “as one” in a unit, to solve problems. Eight archetypes describe successful leader/follower relationships:

1. Landlord and tenants: The leader controls a resource others want.


2. Community organizer and volunteers: In a reversal of power, leaders inspire, but followers set the agenda and act.


3. Conductor and orchestra: A leader sets rules; followers offer their “personal best.”


4. Producer and creative team: The organization gives a team of experts and innovators the resources and the creative freedom to meet the producer’s goals.


5. General and soldiers: The leader’s “mission” and the followers’ sense of security  depend on clarity, hierarchy, and command and control.


6. Architects and builders: Architects ask a team of diverse but interdependent builders to bring their blueprint to life in clearly defined stages.


7. Captain and team: Captains inform the team and help it adapt to change.


8. Senator and citizens: Like-minded people work together as a community, choosing to observe the same “constitution.” Their leader is a mentor, not a dictator.

As One Summary

[caption id="" align="alignright" width="216"] As One Summary[/caption]

Research and discussion about leadership skills tend to center on a leader’s qualities and to pay little attention to followers and what motivates them to contribute and succeed. Organizations are likely to fail when they suffer a “disconnect” between leadership styles and strategic goals – and between prevailing and preferred ways of working. For people to reach their full potential, leaders and followers need to work as a collective a single organism united for a common purpose. Examples from politics, business and the not-for-profit sector suggest eight models or archetypes of collective leadership. Spanning command-and-control and laissez-faire leadership formats – and hybrids of the two – these models offer a taxonomy for “As One” behaviors.

1. Landlord and Tenants

Under this model, a leader’s power rests in a valuable or scarce asset, which the leader, or landlord, controls from the top down.

Followers agree to the landlord’s rules in return for access to the asset or resource. Apple’s App Store typifies the relationship. Apple contracts with independent developers to create apps for the iPhone and iPad and sells them through its online store. It splits the earnings 30/70, giving the a share to the developer. Strict rules – no porn, no distribution outside the App Store and no disclosure of sales terms – keep Apple in control. Developers (like tenants) accept the arrangement because it gives them access to millions of buyers and, given the 30/70 split, they also gain a chance to get rich. These characteristics distinguish the landlord and tenant model:

 

• Landlords gain structural advantage through control of a power base: Union boss Walter Reuther used his major asset, labor, to force US carmakers (the tenants) to accept union demands in the 1950s.


• Landlords articulate the overall direction and strategy: With funding of $60 billion, the Bill and Melinda Gates Foundation is the world’s largest philanthropic organization. Perhaps the greatest benign landlord, it uses its power and influence to attract institutions and scholars to its projects.


• Landlords...define and reinforce the rules: They “set precedents and resolve conflicts.” Firms must follow 6,000 rules to stay on the New York Stock Exchange.


• Landlords reward “the best performing tenants: Walmart promises that suppliers who agree to its terms will benefit from a high volume of business.


• Landlords gain more power as they get more tenants: Rupert Murdoch provides access to what advertisers want most: media. The more print space or broadcast spots they buy, the more Murdoch’s empire grows.

2. Community Organizer and Volunteers

In this model, leaders and their followers work more as an “ecosystem” than as a formal organization. The leader has a compelling vision that inspires people to act. Consider the Linux open-source movement. Engineer Linus Torvalds built a community of developers dedicated to improving the kernel of his operating system, an open source alternative to Windows. Torvalds allowed people to profit from their contributions, provided they kept the source code open to all. As a result, he won the support of major corporations such as Dell, IBM, Sun Microsystems and Nokia. By 2010, the Linux ecosystem was worth an estimated $40 billion. Participants in this model have these traits:

• Volunteers are independent decision makers: The Visa credit card system unites autonomous banks into a “chaordic” – both chaotic and orderly – organization.


• Volunteers...opt into campaigns case by case:  To keep followers motivated, community organizers actively engage them, treat each one equally, and show all of them that their opinions and passions matter.


• Community organizers...use narratives to motivate the volunteers: Barack Obama channelled his personal story into a message of hope and change.


• Community organizers’ power increases as the number of volunteers grows:  When the Nazis ordered the extradition of the Jews from all occupied territories, the Danish king, Christian X, refused to comply, and, one by one, the Danes followed his example. The Danes offered more than 7,000 Jews refuge from their persecutors or helped them escape to neighboring Sweden.

3. Conductor and Orchestra

An orchestra’s goal is to play a musical score flawlessly. The conductor must help the musicians meet the highest standards. In this model, followers conform to strict guidelines that cut the risks of mistakes. This archetype is commonly found in the healthcare sector. For example, at Medco Health Solutions, the pharmacy benefits manager provides 1,000 specially trained pharmacists with tools and technologies to prevent medication- dispensing errors. Medco’s expertise and emphasis on precision and quality have helped make it the world’s “largest mail-order pharmacy.” This model’s key characteristics are:

1. Orchestra members have clearly defined roles and tasks: FedEx Ground relies on 15,000 independent contractors to deliver more than 3.5 million items each day; “task clarity” means each driver can earn money based on the number of deliveries.


2. Musicians follow “detailed and scripted processes: Conductors encourage people to pursue their interests and hone their skills, but not at the cost of other members. The orchestra must be greater than the sum of its parts.


3. Musicians undergo extensive training and orientation to perform with precision: Only when you master the basics of your craft can you enjoy the freedom of creativity.


4. Compliance and incentives are closely related: People continue to y with Ryanair and comply with its rules because its low-cost basic fare acts as an incentive.

4. Producer and Creative Team

On a movie set or in a theater, a producer takes care of the “big picture” and lets innovative, independent artists put on a show, harnessing, not unbridling, creativity. Cirque du Soleil’s scouts search worldwide for unusual creative artists for its productions. Its huge pool of employees and performers creates unique, crowd-pleasing spectacles through discipline and hard work: training “boot camps” push performers to their limit; taking a show from “page” to stage can involve years of work. This model’s primary traits are:

• Producers articulate an overall goal, the creative team brings it to life: Despite often toiling in anonymity, producers create the vision that guides the team.


• Members complement the rest of the team: The Mayo Clinic, one of the best hospitals in the US, expands or reassembles surgical teams as cases demand.


• The creative team has complete freedom: Following an illness, Star Wars creator George Lucas had to cede directorial control of The Empire Strikes Back; the film was later acclaimed as the best in the series.


• Leaders use dissent to push the creative boundaries of the team: Bridgewater Associates investment managers invite their colleagues to criticize their proposals harshly as part of a mutual effort to produce the best plans for clients.


• The creative team collaborates closely: To foster participation, creative teams usually have a broad set of skills but relatively few members.

5. General and Soldiers

Under this command-and-control archetype, leaders expect people to do specific, assigned tasks that show their place in the hierarchy. The structure of the model, however, is supportive not oppressive. “Soldiers” use their training and experience to advance through the ranks. At the Marriott Hotels, entry-level employers do routine tasks but have a chance for promotion. The company runs an English program to increase opportunities for nonnative English speakers. For example, Mexican Sara Redwell began as a housekeeper but retired as a hotel general manager. This model’s characteristics are:

• Generals take charge of a mission: Patriarchs in the “Bamboo Network” run expatriate Chinese family businesses in Asia, creating huge industrial complexes.


• Leaders clearly define...roles, processes and tasks: Baristas at Starbucks train rigorously, so each outlet offers the same service.


• The organizational model relies on hierarchy and rank: Multilevel marketing networks, such as health care, beauty and homecare specialist Amway, organize their sellers into ranks and offer motivational awards. The more people independent business owners recruit to sell products, the greater their chances of promotion.


• Training is highly specialized: Jesuit priests spend spend 10 years in study, training, religious retreat and charitable work before taking their last vows. Uniforms and rituals reinforce...common identity” – Boot camp unites soldiers.

6. Architect and Builders

The architect is a leader with a vision who relies on the skills, ingenuity and creativity of others to bring it to life. Ratan Tata, chairman of India’s Tata Group, typifies the architect. He dreamed of producing a car that would sell for $2,500. To do so, he had to win the support of his suppliers. His company used minimalist design and innovative production processes to bring the Tata Nano, the Indian “people’s car,” to life.

• Architects are visionaries with a goal that seems an impossible: Shai Agassi, founder of Better Place, wants to “change the world” by building a global energy network for electric cars.


• Architects unite a team: Builders need skills and commitment to realize their dream.


• “Revolutionary” problem solving is critical: Capital One saw credit cards as information,  not as banking and pioneered the balance-transfer service.


• Builders have “freedom within a frame: They can be creative, but they must meet the architect’s goals on time.


• Builders...are interdependent links in a chain: Architects must make sure that they see the bigger picture and don’t work in isolation from each other.

7. Captain and Sports Team

The followers in this model abide by the game’s rules but make strategic decisions during the match. The captain isn’t the boss so much as first among equals; team members work on the field, assessing the game and conveying information to their teammates. Mumbai’s 5,000 dabbawalas, or “lunchbox men,” act as a highly coordinated, dynamic unit. They punctually and consistently deliver 200,000 hot meals a day – handing over lunchboxes to colleagues at set relay points. Their low failure rate – one lunch in 16 million, or one in 60 days – has earned them Six Sigma certification. The key characteristics of this model are:

• Recruits primarily join to meet their personal goals: The person wants to excel, but within the team’s “strong sense of shared identity” and “pride.”


• There is minimal hierarchy and sometimes no clear leader: The captain serves as the team’s “mouthpiece” and coordinator.


• Tasks and processes are clearly denied: And “internal communications are extensive.” When players are tuned in to one another, the team operates as one unit.


• Strategy emerges gradually: Training prepares people; it doesn’t provide a how-to manual. For example, registers must adapt in a moment to changing conditions.

8. Senator and Citizens

Using this model, citizens unite to help their community, bound together by shared values. As their representative, the senator wields minimal power. Design and engineering company W.L. Gore & Associates eschews titles and organizational charts. People work in ad hoc teams that coalesce and disband as needed. “Sponsors,” not bosses, guide projects; the company lets its employees select work that interests them and tolerates mistakes “above the waterline” – errors that puncture the boat but won’t sink it. This model’s main traits are:

1. A constitution enshrines the principles and values that govern the citizens: The senator safeguards the tenets of a mission statement.


2. Citizens voluntarily join the community: Harley Davidson motorcycle riders enjoy being HOGs, members of the Harley Owners Group.


3. Autonomy is a fundamental right, and participation is a core responsibility: Citizens trust that their constitution and system make sure the right behaviour and they believe that dissenting voices give to improving processes.


4. The community only functions if the structure is fluid and adaptive: Japan’s Kyocera, a manufacturer of electronics components, encourages using “amoebas,” or small working groups, to resolve issues.


5. Communities can be both physical and virtual: The Internet and social networks can help Senator & Citizens communities.

The Pursuit of Wow Summary

This is a The Pursuit of Wow! Summary.
Every Person's Guide to Topsy-Turvy Times!

In a Tweet

To Wow, decide to be the greatest and  act so.

[caption id="" align="alignright" width="300"] The Pursuit of Wow Summary[/caption]

In 1 Minute

1. Honor your errors. Mistakes can be expected – they're part of growth.


2. Behind all business transformation concepts, empowerment is most important.


3. Use recognition and personal touch to promote relationships.


4. Encourage people in your company to be Intrapreneurs, and treat Innovators like rockstars.


5. Embrace and celebrate diversity, as for it creates opportunity.


6. Pay attention to good design in everything, it's the best way to stand out.

The Pursuit of Wow Summary In 10 Minutes

Wow! is excitement that makes you and your company stand out from the crowd. It’s enthusiasm, excellence and success. Here’s how to pursue the “Wow!” for your organization. First, you have to get up and get going.

From loosing weight to giving up those cigarettes at last, just get moving and get it accomplished. The basic principle is to muster your determination to do whatever it takes, and to start now. Decide to be the greatest, and then start acting so. In a nanosecond, make that decision to meet the “Wow!” and then work passionately toward that goal to make it happen. Along the way, you may experience errors, but that’s part of the process, since the only way to advance is to play a new game and risk doing something wrong. In fact, respect the mistakes you make and learn from them. Anticipate making some very large errors, because that is the sole means of moving forward in big jumps. Just learn as you go.

A big snafu can turn into a big gain. For example, the Bon Marche store in Seattle incorrectly advertised a compact disc (CD) player for $99, instead of the correct price of $179, discounted from $199. But the store kept its word, sold the CD player at the advertised price and even took an extra 4,000 orders at that price. Though it sold the units below cost and lost about $200,000, it gained a feature story in The New York Times that more than paid for its loss. And, it built a reputation for trustworthiness and value.

Business Transformation

Businesses today must become familiar with a half dozen key concepts that are sparking corporate transformation. In order of importance, they are:

1. Empowerment

Give people at all levels of your organization more responsibility and power, especially those on the front lines. Focus on “the folks who actually do the work.” The supercharged corporation will rise or fall based on how much faith the people in charge have in the people they hire to teach, nurse, clean or build.

2. Virtual organizations

You don’t have to own all the resources you want to use. Buy access to them when you need them.

3. Curious organizations

Innovation is imperative. Take chances. Hire daring, edgy people, even if they make you anxious. Try new inventions and ventures. Try again when those fail.

4. Leveraged knowledge

Gather and share information. Get the facts, but also try to understand the “psychology and sociology” that affect your firm and your customers.

5. Reengineering

Deflating your hierarchies is not as important as reexamining the way your company carries out its processes. Take advantage of any links among departments that might make your company’s efforts more linear and efficient. Avoid the paper chase that is usually part of reengineering.

6. Total Quality Management

The key word here is ‘quality.’ Your products should work without fail.

You and Your Employees

Recognition is a good way to promote better relationships with your employees. For example, don’t just phone someone to give a compliment. Sending a handwritten thank you note makes them feel that they have earned more of your personal regard. Other techniques for recognizing good work include giving awards or holding ceremonies to acknowledge achievements or celebrate the positive conclusion of a project.

Give praise and credit to everyone who earns it. When you are generous continually, you create an aura of altruism, which inspires people to behave in a more positive and supportive way. Generating this atmosphere is like collecting obligations that you can call in when you need support. Gather “small wins” and use them later. They build favors people will owe you. George Bush once campaigned around the United States to help many Republican candidates, even those running for low-status local positions. When the Republican primaries and the presidential election campaign came to those candidates’ states and hometowns, he called in his chips, and won the nomination and election.

Encourage the people in your company, whatever their background, to think of themselves as entrepreneurs. Treat them well. A little TLC goes a long way. Employees who are treated with respect are more likely to treat customers the same way. They will do more professionally. Just smile. It will boost everyone’s spirits.

Be super-attentive to your employees. People often feel overlooked or ignored. They love it when you do little things to make them feel good, such as promptly returning their phone calls. This kind of attention helps people feel empowered and motivated. But don’t just do things for people. Let them do great things for themselves by removing impediments from their work, so they have the support to do their jobs well. Show your employees and peers that you are sincerely committed to mutual goals.

In business, you are on stage. Manage yourself the way you want to be perceived. What people perceive is what’s real to them. That’s why dressing for success works. There is a look and smell of power – cultivate your appearance to increase the power you project, and you’ll increase the power you have.

Practice your interviewing skills. If you have a number of people to interview – for instance, to track down a problem within the company – save your most critical interviews for last, and conduct them after you have a general idea of what’s happening.

Encouraging Your Unique Employees

Recognize each person’s uniqueness. The age of mass production is fading fast. Increasingly, companies should value personal knowledge, imagination, curiosity and talent. In today’s environment, your employees view your company as another tool for promoting their personal growth. Companies that take advantage of this instead of resisting it will have more motivated, loyal employees and fewer turnovers. Encourage employees by organizing their work into projects. Foster each person’s desire to create a special niche or career. Let employees select their career paths within the company.

To encourage initiative and productivity, cut down on the number of rules you issue. Avoid giving out lists of “don’ts” in your manual. Instead, give out “do” manuals. Keep rules and procedures as short as possible, so employees step up and take on more responsibility. Trust that their common sense will help them make good decisions. Most will welcome an opportunity to show initiative. Do not tell them how to deal with customers. Instead, instruct them to treat every customer as a unique human being. Encourage front-line employees to develop their own ways of relating to customers.

Keep your employees and customers well informed. People want information about problems. Keeping them in the dark will only antagonize them, whatever the news. When you are dealing with an issue or controversy, even telling people that you don’t have fresh news or that you don’t have useful information is better than not saying anything.

Where possible, use word of mouth to promote your services. Try giving away products for free. If people like them, they will talk about them and promote your brand.

Deliberately Design to Please the Market

To make your product or service more distinctive, pay attention to good design. It matters, even for everyday items, such as Rubbermaid bowls and Pentel pens. With good design, you can make almost any product or service a star, even in the world’s most competitive marketplaces. Always keep your design simple. Consider everything your company issues with design in mind. Design is the primary way to make your product, service or catalogue distinctive.

Good design, like innovation, is vital in keeping a product from becoming a commodity. When that happens, the product’s value goes down and people buy it at the lowest price they can find. Consumers are willing to pay more for good design, because it makes your

product distinctive. Packaging also helps increase your product’s perceived value.

For instance, a company that sold $500 laser components had used ordinary plastic bags to package its high-tech product. When the company repackaged the components in an attractive vacuum-sealed container with a gold label, more parts sold at higher prices, because the component’s perceived value increased. You can make any product or service special – even parking cars. One company created a “Passion for Parking” newsletter that kept customers informed and interested.

Work Like a Rock Star

Find ways to make your employees stand out. De-Mar, a plumbing company, turned its workers into Service Advisers. It required its employees to conform to a grooming code and to take Dale Carnegie courses. De-Mar trained its employees in a juiced-up, revival meeting environment to get them excited about their work.

Unfortunately, many companies split employees into two tracks: one for future managers and one for each contributor, and they don’t sufficiently reward either set for being innovative. Often, inventor types are pushed out of the corporate mainstream. That discourages innovation. Instead, treat your innovators like sports heroes, because they bring increased value to your company.

Planning can only go so far. In today’s rapidly changing environment, greet disruptions with bold strategies. Use inconsistencies or surprises to create “Wow!” ideas. Surprise can motivate employees and delight customers.

New Boss on the Planet: The Coming Influence of Asia

To compete over the long range as a company owner or manager, make yourself knowledgeable about the global economic environment. Asia is particularly crucial. As it makes more use of its size, population, strength and money, Asia will exert its will over the financial well-being of the rest of the globe. To learn more about the growing influence of Asia first hand, consider taking a trip to one of the nations that is a key player in the Asian economy, most notably Thailand, Japan, China or Malaysia. India is also gaining in economic strength. Asia is the enticing, resource rich, nearly new frontier of this century. Your company’s future will be shaped by how it responds to the challenges Asia presents.

Trade and foreign investment in these countries is growing rapidly. At the same time, an increasing number of companies in Asia and elsewhere are adapting and using U.S. mechanisms and techniques. They are deploying these approaches at a relatively low price to make goods that resemble U.S. products, and to sell them at lower prices. They are catching up, and their employees are taking more jobs away from U.S. workers, through either outsourcing or competition. To withstand this onslaught, companies in the United States must compete even more strongly and must not respond with fear. Though the decline of U.S. commerce is a distinct possibility, it doesn’t have to happen.

In responding to this growing global competitiveness, business owners and managers must recognize the differences among people and adapt our products, services and ways of relating so. For example, U.S. society tends to be oriented toward achievement and planning for the future, while other societies – such as some Hispanic and Asian cultures – may put a higher priority on family and personal history. Embrace diversity. Regard it as an opportunity that will bring increased creativity into your organization. Help your employees become more sensitive about how they use language, make jokes and otherwise relate to people from different cultures. Build awareness of cultural diversity in your organization. Encourage sensitivity and communication by holding a diversity training session as a forum where employees can discuss their experiences and perspectives.

 

Grown Up Digital Summary

This is a summary of Growing Up Digital by Don Tapscott

In a Tweet

Millenial's values: Freedom, customization, scrutiny, integrity, collaboration, entertainment, speed and innovation. (tweet this)

In 2 Minutes

The technology that Millenials grew up with fundamentally shaped them, and they are shaping it.

Millenials use computer technology naturally and easily, share eight norms: Freedom, customization, scrutiny, integrity, collaboration, entertainment, speed and innovation.

They prefer to learn and work collaboratively. They anticipate fast, frequent communication. They also customize their purchases, and expect to work with businesses to improve them; are close to their families, and find them safer and more democratic than earlier generations found theirs.

Millenials judge corporations by their integrity, workplace practices and concern for the environment. They want to be evaluated on performance, not seniority or loyalty.

Millenials don’t make sharp distinctions between work and play, or their public and private spheres.

Grown Up Digital Summary

Who Are the Net Geners?

[caption id="" align="alignright" width="210"] Grown Up Digital Summary[/caption]

You may have heard that members of the Net Generation (or Net Gen) are selfishly addicted to their computers, which have rotted their brains, destroyed their social skills, and left them violent and immature. This generation is definitely different from earlier generations, but how could it not be? It’s the first generation to grow up taking digital technology for granted. Net Geners assume continual, constant access to computers, the Internet and each other, via phone, text or some other still-emerging technology. Those factors have changed how Net Geners act and even how their brains function in some areas. However, many of these changes are positive.For context, start with Net Gen’s place in history as the latest in a series of generations with distinct identities. The introduction of television defined the technological tone of the baby boom (born 1946 to 1964). The baby bust, or Generation X, (born 1965 to 1976) is a much smaller cohort. Though its members are quite educated and regularly use advanced communication technology, they didn’t grow up with computers, and many feel somewhat excluded from the central cultural debate. The Net Generation (born 1977 to 1997) is again a larger group, a kind of echo of the baby boom. They’ve been around computers since before they could speak. For them, technology is like air, necessary but invisible. They can’t imagine living without it. Their continual connection to others worldwide has produced the first truly global generation. Immigration to the U.S. has made Net Geners increasingly multiracial and tolerant.

Because Net Gen members were bathed in bits – that is, immersed in computer technology their whole lives – they are far more adept than earlier generations. This has produced a generational lap in which the younger generation must guide and educate the older. Net Gen uses the media differently than its predecessors. Rather than being passive receivers, Net Geners are more active. Almost 80% of them read interactive blogs daily, leaving comments and adding links. They multitask, watching TV while texting, talking on the phone or surfing the Internet. They’re more likely to use their cellphones as everything from alarm clocks to GPS devices. They may even use their phones’ cameras as a kind of instrument for social action, for instance, to document police misconduct. They see the computer as more than a tool, as a place to congregate with friends. Their safe communal spaces aren’t mainly in the physical world, but rather online, on social networking sites like Facebook. Rather than being antisocial, Net Geners are developing an entirely new set of social skills.

Net Geners share eight norms that unify them as a generation:

1. Freedom

Net Geners expect and demand freedom, choice and variety in all areas of their lives. Rather than finding a job after college and holding on to it, they keep looking for the right job. They want to live and work where and when they choose.

2. Customization

Previous generations accepted mass-produced products. Net Geners regularly customize their purchases and even their jobs.

3. Scrutiny

Having always been exposed to countless competing media channels, Net Geners almost instinctively scrutinize any information they encounter. They expose hoaxes quickly, and make short work of false pretenses. To communicate with Net Geners and to sell to them, you must be honest and open.

4. Integrity

Net Geners demand integrity. They expect companies to display honesty. They can forgive genuine mistakes, but not deception or harmful practices.

5. Collaboration

Members of previous generations sometimes swapped stories about work over a drink, but they did their actual work alone. Net Geners grew up collaborating; it is natural for them. Their collaboration goes beyond teamwork or social contributions, and often takes the form of co-creation (think Wikipedia).

6. Entertainment

Net Geners love to be entertained. They expect to take regular breaks from work to relax. In fact, they don’t even see clear lines between work and play; they want to have fun at work. That’s why Microsoft and Google put so many games online.

7. Speed

Net Geners are fluent users of texting and instant messaging, which are built on high-speed connections, so they expect everything to happen quickly. Their Internet connections and computers have become faster and faster. They want rapid answers, decisions and action. Slowness makes them bored, worried and irritated.

8. Innovation

All their lives, Net Geners have seen new products and technologies arrive in a steady stream of change. They expect change and want the best, latest toys.

Brain Change

Interaction with computer technology has changed Net Geners’ brains. Recent studies show that when new neural connections form in the most-used parts of the brain, they continue throughout adulthood. Thus, Net Geners’ experience tracking multimedia has made them more visually acute and better at spatial awareness. Video games have benefited them in surprising ways. They’re better at hand-eye coordination, and are more effective decision makers and collaborators.

Their memorization skills have gone downhill, but omnipresent Internet access makes those less necessary. You don’t have to know all the facts anymore; you need to know how to search and evaluate what you find. Net Geners can do that. They’re skilled at zooming from site to site, sorting, sifting and assessing information. What hasn’t improved? Critical thinking. It still requires focused attention, so Net Geners may need to learn to disengage from distraction.

How the Net Gen Will Change Social Institutions

Traditional education mass-produced information and distributed it in the same way to everyone. Content flowed to students as passive receptacles. That no longer works; education’s methods are outmoded. Far too many students are dropping out of high school, and those who stay often find school an obstacle to real learning. Education must evolve to meet Net Gen’s changing demands and to teach students what they need to know to thrive in an information-based economy. Since students can access factual data instantly online, and since the body of knowledge in any given profession now becomes obsolete quickly, education should not focus on transmitting knowledge, but on teaching students how to learn. Teachers should shift from lectures to interactive, collaborative guidance, and let students explore and discover on their own. Schools should use computers to individualize access and maximize the use of student time.

Net Geners also will be different in the workforce. Rather than being loyal to one employer, they will follow their own career paths – changing jobs, pursuing independent entrepreneurial ventures or returning to earlier employers after adventures in learning. Rather than annual performance reviews, Net Geners want regular – even daily – feedback. Rather than being rewarded for seniority and for working set hours in a set location (like the often-mocked cubicle), Net Geners want rewards for performance. They want to work flexibly, in terms of time and place. They want work to be fun and they expect the workplace to emphasize interpersonal relationships (even if they are virtual). They want to collaborate, invent and advance quickly. Net Geners can seem entitled, but they bring waves of talent and technical expertise to their jobs.

Net Geners are not passive consumers. They expect interactive relationships with the companies they buy from. To use Alvin Toffler’s word, think of them as prosumers: consumers who also produce. Net Geners approach commercial activity differently, so marketers must approach them differently, starting with their immersion in media. Net Geners have swum in ads since they were born, and are adept at ignoring commercials or using technological tools to skip them. Rather than flooding Net Geners with standard broadcast ads, marketers must approach them on their terms: via relationships.

Net Geners look first to their peers for feedback on new products, so sellers need to gain access to someone within their N-fluence networks. For instance, get bloggers to comment on your product and bring it to the attention of people on social media sites. Once Net Geners have your product, expect them to customize it and share their opinions about it. When they ask questions, they want answers. They will judge your company not just on its products, but also on its behavior. Any ethically dubious practices or environmental harm will come back to haunt you.

Net Gen at Home

Baby boomers grew up in hierarchical homes with limited access to the global community (few TV channels, no Internet). Net Geners were raised in more democratic homes. Unlike boomers, Net Geners didn’t have to leave home to have a say in their lives; they already had a say. Boomer kids ran around outdoors playing, but the outside world seemed more dangerous and complex by the time Net Gen kids were being raised. Fear of crime spiked. Parents tightly scheduled trips to the outside, driving their Net Gen children to lesson after lesson. Home was a safe place where Net Geners could socialize via computer with no fear or constraint.

College costs have skyrocketed, making it far more expensive than it was for earlier generations. Thus, living at home or moving back home bears little tension or stigma.

This closer family tie is also necessary because the Internet bears many dangers from which even tech-savvy young Net Geners need adult protection: pornography, cyber- stalkers, cyber-bullies and big risks that open up from simple errors in judgment. The most common risk is keeping too loose a rein on personal privacy. Kids don’t realize that embarrassing comments or images posted on social media Web sites may pop up later to damage their jobs or school prospects.

Barack Obama’s successful presidential campaign shows how Net Geners will change politics. Once they were largely uninvolved because they didn’t trust politicians or the entire political structure, and because traditional politics approached them the wrong way. The slow pace of organization and policy change turned them off; engaging them required a dramatic combination of factors. The September 11, 2001, terrorist attacks were the first activism trigger. Subsequent attacks on Net Gen social values, like tolerance, further pulled them into the political arena.

Since Net Geners are likelier to vote as Democrats, they were ready when Obama engaged them via social media. Obama let some of the traditional party hierarchy dissolve, giving Net Geners more of a voice and more independence. He actively used YouTube and Twitter. He employed Net Gen-style collaboration in campaign videos showing him speaking amid a mix of volunteers’ music and commentary. This may sketch out where Net Geners will take politics: interactivity; faster mobilization; a more genuine, online marketplace of ideas; and closer, more democratic scrutiny of mainstream media claims (including attack ads).

How Net Geners Will Change the World

Net Geners won’t just inherit the world. Instead, they’ll actively alter it. In fact, it’s already happening: Witness the Davos Six. The British Council chose six teenagers to attend the World Economic Forum in Switzerland. They addressed the assembled global leaders about their community activism, from raising funds for schools in other countries to planting trees in Mongolia to help fight sandstorms. That’s the sort of immediate, grassroots, experience-based political change to expect from Net Gen members, who assume they have the right to be heard and to act. They won’t wait for some higher- up to take notice. Given the interconnected nature of the Internet, they know that they can make a global splash immediately. Volunteering is up and Net Geners are far more concerned than earlier generations about the global implications of their actions. Many seek out green products and insist on integrity from their institutions.

The Net Gen isn’t perfect, and neither are the Internet and digital technology. The technology makes it possible to steal music, see pornography easily, and cheat or bully people in new ways. However, many of these accusations are old flaws in new forms. Individual Net Geners, especially younger ones, need guidance on ethical action, on responsibility, and on constructing and keeping boundaries. Talk to your kids. Meanwhile, studies show that the rest of older generations’ common worries about Net Geners are ill-founded. Kids today are not just fine – they are flourishing, and they will make the world a better place.

Good Strategy Bad Strategy - Summary

This article is the Summary for Best Selling Book Good Strategy Bad Strategy: The Difference and Why It Matters.

In 1 Tweet

#GoodStrategy discovers critical challenges then designs a coordinated plan of focused actions to resolve. (tweet this)

In 2 Minutes

A good strategy is not about vision or goals. It is a carefully researched and well designed action plan designed to meet a challenge. However, leaders often substitute targets, exhortations and slogans for strategy. Bad strategy, a form of magical thinking, contains fluff, dodges problems, mistakes goals for strategy and sets unrealistic goals. Good strategy focuses on critical issues and decides how to address them. It requires research and analysis, hard choices, decisive planning, and action. Identifying and leveraging your competitive advantages are the first steps in strategizing.

A diagnosis a guiding policy” and a set of coherent actions” form the kernel” of a good strategy. Master strategists” design their own novel approaches to solving a problem; they don’t choose from standard options. Strategic objectives should always be practical and feasible. Good strategy represents a hypothesis, an educated guess, about how to increase your business in the most productive way.

Good Strategy Bad Strategy - Summary

Our Strategy? To Be the Best!

A graphics firm asked author and strategic management consultant Richard Rumelt for his help in defining its strategy. At their first meeting, the CEO said he had a “20/20 plan” that would serve as the company’s basic strategy: Each year the firm’s revenues would increase 20% and its profit margin reach achieve 20% or better. The plan listed projections of costs, revenues and profits, and it included strategy statements such as, “We will be the graphics arts services firm of choice,” and “We will delight our customers with unique and creative solutions to their problems.”

After reading the report, Rumelt asked the CEO how the company planned to meet these goals. The CEO replied that setting such ambitious goals would inspire his employees to realize them. After listening to the executive expound on the power of motivation, Rumelt explained to the CEO that his projections were big plans, but they were not a strategy. Rather than focusing merely on broad goals, the CEO and his team should instead work to uncover opportunities and find the best way to pursue them. Success depends not just on motivated employees and grand visions but also on competencies and strategic insights.

Good Strategy 

Good strategy is simple and straightforward. It involves “strength applied to the most promising opportunity.” Strategizing means identifying pivotal issues within your market and industry, and making a plan to focus forceful, results-oriented action on those crucial points. Strategy has little to do with ambitious goals, vision, leadership, innovation or determination. For many business leaders, unfortunately, strategy is nothing more than an exhortative exercise that generates impressive (but generally unrealistic) goals and meaningless slogans.

A good business strategy presents a specific action plan to overcome a defined challenge. Good strategy involves multiple analyses and the painstaking development of thoughtful, expertly implemented policies, designed to surmount obstacles and move the firm profitably ahead. Good strategy is a highly focused, problem-solving activity that tackles fundamental issues, not ancillary or specious ones. It uses the intelligent application of advantage to reach new heights.

The Importance of Advantage 

Recognize the major differences or “asymmetries” that can help your business secure important advantages over your competitors. Often, those asymmetries come from identifying strengths where others might see only weaknesses. Take, such as, the biblical story of David slaying Goliath: The small, defenseless shepherd boy uses his precision with a slingshot to exploit the armored warrior’s only weak spot – his unprotected forehead.

In business, such advantages separate winners from losers, but no company leads in every area. Your job is to pinpoint your firm’s particular advantages so you can leverage them in the most effective way. Never engage in any form of competition in which you hold little or no edge. Such a situation is akin to “wrestling the gorilla” – it’s completely counterproductive and gives someone else the upper hand. For instance, a pioneering start- up firm that has developed a revolutionary new fiber for textiles would lose its advantage by diverting its talent and resources to building a clothing company, an entirely different business that demands different skills.

Make change an advantage. The quicker you “grab the high ground” – that is, discern change, get out in front of it and turn it to the benefit of your firm – the more strategic success you can achieve. You must be able to deal with the granular details of your particular situation to get a jump start on your competitors, particularly those that are mired in inertia.

Bad Strategy 

Bad strategy isn’t just the opposite of good strategy; bad strategy materializes from “specific misconceptions and leadership dysfunctions.” Four characteristics typify most bad strategies:

1. Fluff
Empty slogans filled with trendy buzzwords take the place of important insights.Consider this example from a bank’s internal report: “Our fundamental strategy is one of customer-centric intermediation,” or, translated into plain English, “Our bank’s fundamental strategy is being a bank.” Many so-called strategies are equally banal.

2. Failure to face the challenge
You can’t have a strategy if you don’t isolate and find your firm’s main problem. Heavy-equipment maker International Harvester sought to revamp its organization with charts and analyses but never addressed the main cause of its internal issues: poor employee relations.

3. Mistaking goals for strategy
Objectives are just a wish list if you don’t pair them with concrete action steps.

4. Bad strategic goals
Leaders must set overarching, but always realistic, aims.

Executives who develop bad strategies tend to ignore problems or to see them as pesky irritants; indeed, some believe that acknowledging difficult issues equates to negative thinking. Bad strategy, then, becomes no more than a rallying cry, similar to the speeches of a football player who exhorts his teammates to win. It can be motivational, but it is not strategic.

Bad strategy is distressingly common because it is much easier to conceive than good strategy, which involves rigorous analysis, logical thinking, difficult choices and focused action. Instead, bad strategy involves fill-in-the-blank, template-style thinking.

The Core of Good Strategy 

Good strategy always starts with the “kernel,” a foundation with three components:

1. “Diagnosis ”

Don’t just ask, “What’s going on here?” Take the next step to find patterns and facts that might steer your thinking into new and different areas. Strategizing is an exercise in thinking and imagination, but it also involves judgment and evaluation. To improve your judgment, list your strategic ideas. Cataloging your ideas gives you a reliable system for turning concepts into actions, and it also helps you counter your biases and shortcomings, the mental myopia that afflicts everyone. The more knowledge you gain about your company’s challenges and the ramifications of its strategic options, the better positioned you are to tackle a diagnosis.

After you’ve made a diagnosis, don’t settle on the first solution or insight that presents itself. Instead, attack the ideas you develop with a “create-destroy” mind-set. Develop robust alternative viewpoints that can open up new avenues of thinking. Then do everything you can to tear them apart to prove how well the ideas stand up to pressure. To help in this aspect, create a “virtual panel of experts”: Imagine how people you greatly respect would rate your views, and hone in on their possible critiques. Experts that Rumelt mentally summons to challenge his ideas include the late Steve Jobs, chairman of Apple.

2. “A Guiding Policy ”

Once you’ve diagnosed your firm’s strategic intent, you need an overarching method that will direct your teams’ actions. For example, Wells Fargo satisfies its aim of fulfilling all its clients’ financial demands by cross-selling its services, a guiding policy. Your guiding policy is a signpost that shows you the way to go ahead.

Good strategy focuses on the advantages – the heart of strategy – your firm must leverage to overcome its obstacles. This leverage comes from the way you focus your policies and coordinate your actions to meet a desired outcome – actually, a cascade of positive outcomes. A guiding policy provides the reasons for the actions you need to take to meet your goals.

Consider the example of a corner grocery store. Its proprietor, Stephanie, knows that for her store to compete with its giant supermarket rivals, it must present some competitive advantage to its customers. She narrows down her strategic choices to serving the affluent but time-pressed professionals in her neighborhood in preference to the area’s numerous but cost-conscious student shoppers. With that as her guiding policy, Stephanie set up a prepared foods section, opened a second checkout line after 5 p.m. and allocated more parking spaces.

3. “A Set of Coherent Actions ”

The concrete, “consistent and coordinated” activities your company undertakes to carry out its strategy are critical tests. These steps should create the momentum your firm needs to succeed. A plan of action gets you where you need to go and calls for the thoughtful allocation of resources. For example, applying your sales and marketing knowledge to expand your capacity or alter your product is a coherent action, one that synthesizes your strengths. Think of strategy as something you impose on a challenging situation through your actions.

As you plan, be aware of “chain-link logic.” Any system or organization is only as strong as its weakest link. Reinforcing all your stronger units is fruitless unless you also improve your weakest area. In your analysis, find if your potential bottlenecks – or weak links – can harm your strategic plan.

Chain-link logic also can have a positive aspect: Consider the example of IKEA, the Swedish assemble-it-yourself furniture retailer, which has a strong chain-link structure that rivals cannot easily replicate. With its overall dedication to excellence and quality, IKEA handles its marketing, manufacturing, inventory and product delivery with a distinct approach that defines its personality.

Design Your Strategy 

Master strategists don’t choose or decide on a strategy; they design novel responses to challenges. Strategy always involves three points:

1. Premeditation 

Strategy represents planning carried out in advance of action; “winging it is not a strategy.”

2. Anticipation 

Figuringouthowothers(forexample,yourcompetitors)willactin the future is an important part of the strategic planning process.

3. Design of coordinated action 

Your strategy is far more than your choice among various options – it’s something you construct. You are customizing a performance race car, not choosing a souped-up vehicle from a car lot.

What About Growth?

[caption id="attachment_117" align="alignright" width="240"] Get the full book on Amazon: http://amzn.to/Vei6gl[/caption]

Few business people would question the concept that growth always equals value.Unfortunately, many CEOs will do almost anything to make growth, including making acquisitions for which they pay way too much. You create value when you buy good businesses for less than they are worth. Or you add special value that no other firm can parallel when you buy a business and improve it by leveraging your advantages. If you don’t create value, the true worth of your enterprise remains static. Growth depends on such factors as innovation, increased product demand and upgraded offerings. Strategize about those hands-on factors and the steps you can take to shape them.

Prove Your Hypothesis 

In the last analysis, the proof of your strategy will be if it actually works. Good strategy represents a hypothesis, an educated guess about how to increase your business in the most productive way. You will know if you guessed right whether your strategy has succeeded. If and when you meet strategic success, you can draw from it to develop valuable proprietary information that will help you finesse your operations to make even more in the future.

 

The Elegant Solution - Book Summary

Toyota’s Formula for Mastering Innovation 

The Elegant Solution in a Tweet!

To Master and De Risk Innovation make Lean-Little-Bets with IDEA loops (Investigate/Design/Execute/Adjust).

In Two Minutes

[caption id="" align="alignright" width="300"] The Elegant Solution[/caption]

Toyota uses specific methods to innovate constantly, consistently and productively, allowing it to solve a problem better than anyone else in its category.

For Toyota, the best to innovate is by producing tons of small improvements, instead of seeking a single game-changing solution. Use your business's craft until you perfect your design to fit its social context.

Innovate by employing methodically a series of IDEA loops: "Investigate/Design/ Execute/Adjust."

Give people specific constraints to ensure creative solutions to challenges. Base all your creative process to hard data and direct insights from your customers. Make sure you get workers and consumers emotionally involved.

Take advantage of standards to make the Innovation processes easier to learn. Innovate via "systems thinking." and make all the elements your product and experience play well together. Thrive for perfection by cutting out all complexity and excess*.

Make it lean!

*You Might want to take a look at Laws of Simplicity

The Elegant Solution In Ten Minutes

Toyota’s Principles of Innovation

Innovation is crucial for any business, but it can get tricky. Toyota rises to the challenge, coming up with more than a million ideas per year that its employees can apply to their process.

How do they do it? Toyota Innovates at all level, and so should you. Get everyone in your organisation devoted to think of new ways to do things and improve your customers life's. Think like Toyota: don't seek a single game-changing solution. Instead, produce tons of small improvements, look for 'the elegant solution – the singular and deceptively simple idea with huge impact.' Such ideas cut through the complexities that distract people from new opportunities, reframing problems in new, productive ways.

Toyota’s quest for elegant solutions started in the nineteenth century when Japan’s Sakichi Toyoda found ways to improve the weaving process. His work led to Toyoda Automatic Loom Works, which eventually became the Toyota Motor Company. Toyoda did not seek new 'toys' nor technological frills. Instead, he researched for 'ingenuity in craft', so he could manufacture things that people wanted by looking for better ways to perfect his work and make his innovations fit their social context. That is ultimate elegance, and to get it right you have to understand innovation. Start by defining it. Don’t get caught up in false distinctions like the one between 'incremental and breakthrough innovation.' Innovation means 'solving the problem of how to do something better than before.' Your challenge is to Innovate until you reach perfection – and then to keep improving.

Creativity isn’t a mystery. You can generate 'applied creativity,' a core principle of innovation, by engaging in your situation – that is, connecting emotionally – and exploring it. What are you really trying to do? Don’t be trapped by job titles. Instead, focus on who you are and who you are to your organisation. Do you generate new ideas? Do you apply others’ ideas? Are you at your best improving existing processes? Or do you focus on relationships and help people get along? Hone in on the focus that suits you until you get to the bottom of your organisation, your job and your immediate tasks, while continuing to seek your ultimate goals.

Examine what you do everyday. Ask difficult and challenging questions: How do I serve people? Why is my work important? Can this be done better? How can I improve this job, process, company or product? Use your answers step by step. Both history and Toyota show that seeking a single idea that will turn the world upside-down is not the best way to achieve radical improvements that can revolutionise your business and lead you toward perfection. A big breakthrough idea sounds glamorous, but it is risky and not the best way to Innovate. Instead, seek evolutionary, small changes that make your product a bit better each time. Generate innovation by reversing standard questions. Instead of asking what you can improve, ask what is keeping you from perfection. Now, eliminate those obstacles.

That is how Toyota’s experts designed the Lexus. First, they established a clear, ambitious goal: Create a luxury car better than a Mercedes or a BMW. Then, each core member of the design team rented a better luxury car and drove it almost 150 miles, tracking performance and the experience of the ride, until they identified the 'Mercedes S class and BMW 7 series' as targets to beat. Wicked isn it?

They studied U.S. luxury car owners, examining everything from where they ate to how they worked. Toyota used direct observation, focus groups, academic studies and reverse engineering of BMW and Mercedes cars to establish criteria for the car that would become the Lexus. The team set and pursued impossibly high standards. The crucial final steps included acts of elimination: the team cut weight, noise and other obstacles to achieve perfection.

Toyota's design team Innovated on its goals. To do the same, you need to think in terms of the bigger picture. Make sure your changes work with the way your entire solution fits together and functions. This isn’t easy, since "System" nor 'solutions thinking' are natural, but you can learn to do it. Look ahead to see how your changes will move through the solution. Seek each problem’s 'root cause,' which is often hidden behind what seems to be the source. You can’t do this alone. Your entire organisation has to be devoted to this kind of thinking. This is easier in small companies, especially start-ups, but it can be done anywhere. Everyone should examine how suggested changes will fit into the larger whole.

10 Rules to Guide Innovation
& Building The Elegant Solution

As you apply Toyota’s principles for innovation, let these practical rules provide direction:

1. Let Learning Lead

Many potential innovations fail because those involved failed to really understand the situation, which can happen when people don’t value or understand learning. To avoid this, make learning everyone’s first responsibility. Give people time to observe, and teach them how. Many conceptual tools or learning models can help your organisation learn. Toyota uses the 'Deming Wheel,' a sequence of Plan/Do/Check/Act (PDCA). Adapting such a standard model of learning leads to other crucial components of gathering information, such as developing standardised vocabularies and methods. A more generalised, applicable four-step learning model, is called 'IDEA Loops' (investigate, design, execute and adjust)'. To use it, investigate what is going on. Design solutions. Execute experiments to see if the solutions work. Adjust your actions, incorporating what you’ve learned. Then start over again with an investigation. Record the results of each IDEA loop in a standardised document, so your organisation has access to what you discovered in a known format. To build reflection into your process, take the time after you’ve acted to examine your actions.

2. Learn to See

As you Innovate, things won’t always work out as you planned. Some new product or item might function but still not solve your real problem. This happens when you don’t understand the situation deeply. To solve this, 'learn to see' the problem in full context; understand how, when, where, and why it happens, and what impact it has on people. First, get the facts. Build your perceptions until you see things as the customer does. Use three general tools. Initially, note what customers do. Watch them in context. Make your focus groups and lab experiments as realistic as possible. Then 'become the customer.' Go where the customers go. Do what they do. Future Toyota managers become mystery car shoppers, so they experience the purchasing process. Next, 'collaborate' with customers, involve them. Ask what they want and need. Now give it to them.

3. Design for Today

Often something you try just doesn’t work as well as you hoped. This can happen when you get addicted to invention for its own sake or to an idea just because it’s yours. To prevent this, design for a need that actually exists now. This doesn’t mean you can’t develop new products if they demand a long lead time, but begin by solving problems that are impediments in the present, not ones you anticipate in the future. Hybrid cars are a good example. It took Toyota a long time to develop them, but they met a real need. Focusing on existing needs also grounds your development process in the real world; it allows you to master, as Sakichi Toyoda suggested, every inch of the production process. Incorporate your understanding of trends into the design process, but stay anchored in today’s market.

4. Think in Pictures

You’ve involved people in your innovation project by telling an engaging story, but to really explain it, use pictures. Draw or diagram the problem (and solution) or use photos to bring the dream alive through images. You don’t have to be an artist; you can use stick figures, clay models, collages, or existing graphic or software tools to evoke your dream. You can do this in words, like thinkers from Walt Disney to Martin Luther King Jr. As they ask and answer questions, people can literally visualise solutions to the immediate challenge. This process allows participants to connect thoughts their own way, and shatters logjams created by enforcing linear processes.

5. Capture the Intangible

Sometimes you know what the goal is, but something is missing. This can happen when the people focus too narrowly on the specific object being created and miss its larger purpose. To illuminate your vision, try to explain that intangible missing essence. If you buy a Cadillac, you aren’t buying just the transportation function. You’re also buying the feeling, the meaning, the personal connection – the intangibles that come with the car. The most common intangible need is the desire to avoid risk. People who might buy your product fear that you’ll waste their money, that it will fail or hurt them, or that they’ll look bad. If you can show them these things won’t happen, you’ll come closer to selling the intangible. Moving up, you want people to love your product, and to have a sense of collaboration, to feel that when they buy it they are part of creating something great.

6. Leverage the Limits

If Innovation is essentially dead at your company, the organisation may have gotten too comfortable. To reignite its start-up spirit, use limits as Toyota does (and as artists do) to force more creative solutions. Set 'stretch goals' to push beyond the current level of performance. Align these bold, but specific, goals with the organisation’s core function. Jane Beseda set such stretch goals to revolutionise Toyota’s North American Parts Operation. She set a target: cut $100 million from distribution costs and eliminate $100 million worth of inventory from the supply chain. At the same time, she wanted to improve customer service by 50%.

While you might be able to improve your results by 10% just through working harder, you have to change how you work to improve by 50%. Beseda found that better departments worked at cross-purposes. To solve that problem, Toyota adopted a new planning approach called, 'Vertical-Horizontal-Vertical.' Each unit’s team planned on its own, met with teams from other units to plan integrated efforts, and then updated its unit-specific plans.

7. Master the Tension

If your team is solving problems, but in a flat, uninspired boring fashion, try to 'work through creative tension.' Toyota applies 'dynamic tension' that is, establishing goals that pull the organisation in two opposite directions, and then finding a solution that balances both. Use each half of these paired forces to frame your efforts to resolve the opposite challenge. Then reverse. Using paired challenges can push your teams past the mental blocks and lazy thinking.

8. Run the Numbers

Often teams come up with solutions that simply don’t work. This happens when you treat innovation as an art. Instead, balance your vision with hard data. Re-examine the challenge. Measure your process. Keep analysing it until you can articulate the issue in ways that lead to new solutions. Toyota pushes its engineers to refrain from 'immediate action,' because the first action is always along overly familiar lines. It emphasises the need to move past hearsay and even experience.

9. Make Kaizen Mandatory

If your company Innovates, but does so erratically, it is not managing creativity correctly. To solve this, integrate the 'kaizen ethic' throughout your organisation. In kaizen, you engage in an ongoing process of developing a standard, following it, and then developing even better methods, which become the new standard. Many creative people run away from standards, thinking it restricts creativity. That’s false. A standard is simply the best way known to do something, but you should adhere to it only until you find a better way. When you set a standard, make sure it is the best method. Document it completely. Distribute the information companywide, and shape your training programs so people live the standard. Kaizen accents quality over the long haul. If crunch times pull on you abandon your standards, fight that temptation.

10. Keep It Lean

Many companies assume that 'more is better.' They add options and features, making products hard to use and burying their core functions. Instead, keep solutions lean. Focus on fulfilling customer desires and refuse to add anything else. This isn’t easy. Complexity is the opposite of lean. Complexity stems from inconsistency, overload and waste. Seek the sources of these problems solution-wide and fix them.

 

Thank You Economy - Book Summary

This is the summary of The Thank You Economy by gary vaynerchuk.

In a Tweet

Competitors are bigger, cheaper, got celebrity status and you don’t? You just have to out care them.

In 2 Minutes

Social media likely will change in the future as new technologies give rise to new ideas and platforms, but the vibrant, vocal online community is here to stay. If your forays into social media haven’t worked, you’re probably doing it wrong.

The “culture of caring” must start at the top and reverberate through the organization. If you want your culture of caring to reach the customer, your employees must share your philosophy. Care more about them than about your clients or your competition. Interactions with your customers must be heartfelt, visceral and authentic.

Your great-grandparents grew up in a world where good customer relationships mattered. But corporations’ restless pursuit of profits has led to the elimination of all unnecessary niceties to cut costs. Social media have returned power to the customer, making firms more mannerly and creating the “Thank You Economy,” which cares “obsessively” about customers.

Quality is more important than quantity when it comes to social media initiatives. “Use shock and awe to blow your customers’ minds and get them talking.” Despite – and due to – technological advances, marketing is more difficult now than ever.

In 10 Minutes

Most grandparents can recall living in a very different world – one where they knew their local grocery store owner all their lives, and where good customer relationships mattered. “Courtesy and respect” were prevalent in those days, and word got around if someone in the community was rude. If customers were pleased, they told their family and friends. If customers were unhappy, they told even more people. Businesses “lived and died” on their reputations.

The growth of big corporations and the pursuit of profits changed these “old-world values.” Firms cut corners and “manners took a nosedive.” No longer did businesses build trust and loyalty through the countless small, personal interactions so crucial to all good human relations; instead, they tried to enhance their profits by eliminating all unnecessary niceties.

Enter the Internet, which dramatically changed the face of business. At first, its electronic remoteness and sheer size only extended individuals’ sense of isolation; people experienced fewer human interactions when they could buy anything they desired online – they “never had to leave the house.” But since the début of Web 2.0 (now known as social media) in 2003, the “silent, anonymous, private Internet suddenly turned extremely chatty, personal and revealing.” People began talking to one another again. Social networking sites – Facebook, Twitter, YouTube, LinkedIn, and so on – now offer a way to reconnect and recapture the social satisfaction missing from many business transactions. “Word of mouth is back.”

The rapid development of social media has led to the emergence of the “Thank You Economy,” where business leaders revert to old-world ideals. The Thank You Economy will reward only companies that authentically learn “to mind their manners in a very old-fashioned way,” online and off. Organizations must join online conversations. Customers want to know they care. If they suspect that firms don’t care, people will tell their social networks. Happy customers can become your strongest advocates. Unhappy customers are your best tutors.

Bad Excuses Companies give

If you are tempted to dismiss the potential value of social media, make sure you’re not buying into the typical justifications that short-sighted non adopters proffer. Disregard these 11 criticisms:

1. “There’s no ROI”– Even if you can’t prove it with numbers, you know in your gut that gaining the trust of a customer is basic to making the sale.


2. “The metrics aren’t reliable” – Advances in gathering and interpreting data about social media initiatives already have and will continue to become more accurate.


3. “Social media is still too young”–Early adopter shave the clear proven advantage. Don’t wait and see. Do it now. Playing catch-up is not fun.


4. “Social media is just another trend that will pass” – If Twitter and Facebook lose popularity, users will move to the next new platform. Savvy firms will move with them.


5. “We need to control our message” – Smart companies aren’t afraid that angry customers might post unflattering comments on Facebook, Twitter, YouTube or their blogs. If you are apprehensive, it’s time to check your business practices.


6. “I don’t have time to keep track of what every Joe or Jane is doing”–Disregarding the importance of customer comments is business suicide.


7. “We’re doing fine without it” – If that’s your attitude, you clearly don’t care about your customers. Competitive firms are proactive and are “always on the offensive.”


8. “We tried it; it doesn’t work”– Using social media is a long-term commitment. If it hasn’t worked yet, reconsider your corporate culture and how you value your customer.


9. “The legal issues are too thorny”–Company leaders must direct the legal department to serve company goals, including the firm’s new embrace of social media.


10. “It takes too long to pay off” – The benefits of social media far surpass those of traditional marketing at a tiny fraction of the cost.


11. “Social media only works for start-up, lifestyle or tech brands” – This is untrue.

Social Media in the Thank You Economy

Effective use of social media in a business context involves more than just setting up a token Facebook page or sending a weekly tweet. To succeed in the Thank You Economy, you must care “obsessively” about customer service. The “culture of caring” must start at the top and reverberate through the organization. If you want your culture of caring to reach the customer and spread by word of mouth, your messengers (that is, your employees) must share your philosophy. Care more about your workers than you care about your customers or your competition. Achieve this by treating employees like grownups and ensuring they feel as though their “individual needs are being met.” Employ the six building blocks of employee culture development:

1. “Begin with yourself”
As your organization’s leader, exude your company’s culture. Don’t try to create a hip workplace if that’s not what your firm is about. “Self- aware leaders don’t waste a lot of time or money trying to be something they’re not.”

2. “Commit whole hog”
The “mental commitment” to enhanced social media marketing is more critical than the “financial commitment.” Once you are resolved to pursue a social media initiative, you’ll reallocate your budget to find the money you need.

3. “Set the tone”
Take a personal ,one-on-one interest in your customers. Don’t just tell your workers how to interact with your customer base; show them.

4. “Invest in employees”
Identify staffers who want to start your corporation’s Facebook or Twitter account, or who have other ideas about moving into the social media mainstream. Give their ideas and suggestions the credence and support they deserve.

5. “Trust your people”
Let your employees express themselves about the firm in their uncensored tweets and blogs. Give them the freedom they need to offer top quality customer service, open communication and transparency.

6. “Be authentic”
In this era of instant social networking, good news and bad news both travel fast. If you make a mistake that receives public attention, take public responsibility and make a public apology at once. Authenticity brings long-term benefits.

When you find a special employee who cares enough about your firm and its products or services to “adopt a sense of ownership and identification” with your customers, do everything in your power to keep that person working for you.

Quality vs Quantity

While passion is critical to any personal or business success, the “most important differentiator” in the Thank You Economy is “good intent.” Customers will recognize when your intentions are good, and they will flock to you. On the contrary, if you lack good intentions, people will expose you in a heartbeat, and they now have the tools with which to do it on a very large scale and quickly. If your only reason for using social media is to sell at any cost, to garner more fans or to direct people to your store, you’ll lose. Having a huge following merely means you have a lot of “contacts, not connections.” If you stand aloof from the “emotional center” in your interactions with your audience, customers also will distance themselves from the emotional center, making them less valuable clients to you. Social media campaigns should never be forced, but rather based on authentic engagement. Two practical mantras that ought to define your day-to-day intentions are “water as many plants as possible” and “put out every fire.”

Shock and Amaze

Every once in awhile, amaze people with something so outrageous that not only will they be wowed on a personal level, they will spread the word. This genre of campaign is difficult to execute, but it is effective. Rapper 50 Cent is familiar with the advantages of generating shock and awe. Responding to a critical slam by a disgruntled fan, Canadian teenager Pierce Ruane, who posted a YouTube video claiming that 50 Cent was a sellout for advertising Vitamin Water and other products, 50 Cent flew Ruane to New York City and posted a new YouTube video of them having fun hanging out together.

What can firms learn from 50 Cent’s example? What if, say, a large electronics retailer spent $4 million to send everyone on Twitter who turned 21 on April 21 a coupon for 50% off an iPhone 4? Or what if chocolate giant Hershey gave some of the people it interacts with frequently online all-expenses-paid family visits to Hershey Park, its chocolate-themed amusement park? These customers would speak positively about the firms, spreading precious word-of-mouth publicity and creating much more value than “a Facebook ad or even an SEO manager’s salary.” You don’t need to spend a lot of money creating shock and awe. Even sending your top 20 or 30 social media followers a handwritten thank-you letter and a rose will create a positive effect.

The Thank You Economy in Action

The following case studies illustrate how businesses can use basic social media principles to great advantage:


— “AJ Bombers: Communicating with the community”
Angie and Joe Sorge launched their Milwaukee hamburger restaurant in March 2009, and they have spoken with its market about nearly every aspect of the diner since day one. The owners use social media to embrace customer advice on menu items, prices, decor, promotions, and more.

— “Hank Heyming: A brief example of well-executed culture and intent”
Virginia attorney Hank Heyming uses social media to enhance his professionalism, connect with his clientele and offer affordable help to start-up entrepreneurs.

— “Irena Vaksman, DDS: A small practice cuts its teeth on social media”
A pioneer among medical professionals, Dr. Vaksman uses Facebook, Twitter, YouTube and LinkedIn to educate the public, to exchange information and interact with her patients, and to differentiate herself from thousands of other dentists in San Francisco.

— “Avaya: Going where the people go”
Known for high-performing communications systems and services, Avaya demonstrates that even a business-to-business company can use social media to great advantage. While Avaya mainly uses Twitter to handle customer questions and complaints, one astute marketing director noticed a terse tweet that simply said “shoretel or avaya, need a new phone system very soon.”

Avaya signed a $250,000 contract with the tweeter

—“Joie de Vivre Hotels: Caring about the big and the little stuff”
Aiming to perfect the “art of customization,” California’s largest boutique hotel company tries to bring the “joy of life” to its customers daily. Every month, employees vote to give the Best Dream Maker Award to the co-worker who found the most uniquely thoughtful way to deliver an “over-the-top experience” to a guest.

Marketing Has Become Really Hard

Despite – and due to – technological advances, marketing is more difficult now than ever. Markets are shifting and splitting into niches, customers are located in the least likely places, and the online world constantly is changing. Companies must be willing to learn and adopt social media strategies. Firms that wholeheartedly embrace the principles of the Thank You Economy, rearrange their budgeting priorities and figure out how to use social media to their best advantage will realize “an incredible return on any investment they make.” If you’re waiting for social media concepts to become mainstream and produce Wall Street-style metrics before you make the commitment, you’re going to be left in the dust.

Customer expectations and behaviors have changed irrevocably, and businesses must take dramatic, creative steps to meet them. Social media likely will change in the future as new technologies give rise to new ideas and platforms, but the vibrant, vocal online community is here to stay. For success, invest the necessary time and energy now.