Observing Innovation

When I was in business school, we were offered a choice. We could either look at a business through the resource based view of the company (similar to the way that majors are split up in college) or as a system – going from the opportunity, to launch, to growth and harvest. And while they did their best to sink in a particular process, I haven’t seen any as clearly as this.

If it does anything, it tells you what fire you need to put out first.

It’s not that leaders don’t have visionary moments or that visionaries don’t have moments where they are called on to be leaders. It’s that these are two very different roles with two very different consequences on daily life.

Peter Drucker used to state that he saw no difference between a manager and a leader. To be honest, I struggle to come up with a differentiating characteristic for those two roles. The only one I can come up with is that we call someone a leader when we are introducing them and we call them a manager when they are getting work done. Traditional leaders may spend a small amount of time setting their own direction and thinking about the future, but by and large, it isn’t a new skill set.

Being a visionary is.

Visionaries are the people out in the wilderness. They are the ones trying to discover and communicate the future that no one has seen yet – the same future they are captivated with.  They find little support for their views, often struggle to find the words to articulate the direction they are heading and sometimes suffer through years of neglect before they get what they are due.

A visionary whose time has come to help move an organization is a leader. But the leader is welded to the organization. They drive the community forward by their sheer presence, all the while knowing that they have to have a steady pulse on where the community is at. The leader has to know what the vision is and know what steps happen next.

The visionary can live out in the wilderness and never be acknowledged – for years.  The tough role in our daily life is to know when we are wearing each hat. Are we in a visionary moment where our job is to walk out to the edge and see what could be? Or is our job one of leadership where we have to take stock of where the community we serve is at and slowly build the road brick by brick?

I only mention this because separating the two roles helped me recognize why an early venture of mine failed – and why so many around me keep failing. Visionaries love the idea that they could build it and the people will follow. But that assumes that the visionary’s job is to just call the play. The leaders job is to make the transition. When you are leading and engaging in your community, know which role they are asking you to play. Be visionary when it helps. Weld yourself to the community when you need them to move.

Don’t ever for a moment believe the being visionary plays the role of a leader or that all leaders are visionary.

Lately, I’ve been reading a lot more about a military strategist by the name of John Boyd. In the practical sense, Boyd is famous for his work in designing the F-15 and F-16 Air Force fighter jets. On the theoretical side, Boyd developed something called the OODA Loop which has become an interesting approach of analyzing strategic decisions.

At the moment, I’m slowly working through Robert Coram’s biography of Boyd and an interesting theme has emerged. Consistently, despite being a raving madman in many respects, he has been saved by two constants: superiors who believed in what he was doing and associates that could do what he wouldn’t or couldn’t.  Boyd obviously had his demons throughout his life – yet he found people to balance and protect him.

This has interesting applications to how to start and staff a startup as well. In each case, Boyd was consistent in who he found to back him up:

• they put up with his foibles
• they believed in what he was pursuing
• they were masters at their craft – and used it to challenge him to go deeper, wider and farther
• they believed that the establishment needs an anti-establishment
• they navigated the establishment on his behalf

On the darker side, Boyd’s antics and vindictive ways would have crippled him otherwise. From people I talk to who know of him, they rank him in the same world as Oppenheimer, Nash and Einstein. Hyper-analytical thinkers who almost had their psyche torn apart by their craft.

For the hyper-aggressive upstart CEO – the question should be asked – who holds you back, holds you down and forces you into a wall? Who protects you from yourself and from getting ruined by the establishment? Who believes in your work and suffers your worst faults?

Find those people and devote everything to them. Unless you nourish them, you’ll lose them – and yourself soon after.

If you haven’t read it yet, Ben Horowitz NAILS the problem about bringing big company execs into startup environments.  Really – stop here, go read it and come back.

His method of integrating execs into the new company is a bit too narrow though. His three rules don’t just work for big company execs, but piddly interns that are still trying to find out how to create a dent. As he tells it,

”

• Force them to create—Give them monthly, weekly, and even daily objectives to make sure that they produce immediately. The rest of the company will be watching and this will be critical to their assimilation.
• Make sure that they “get it”—content-free executives have no value in startups. Every exec must understand the product, the technology, the customers, and the market. Force your newbie to learn these things. Consider scheduling a daily meeting with your new exec. Require them to bring a comprehensive set of questions about every thing they heard that day, but did not completely understand. Answer those questions in depth; start with first principles. Bring them up to speed fast. If they don’t have any questions, consider firing them. If in 30 days, you don’t feel that they are coming up to speed, definitely fire them.
• Put them in the mix—Make sure that they initiate contact and interaction with their peers and other key people in the organization. Give them a list of people that they need to know and learn from. Once they’ve done that, require a report from them on what they learned from each person.

”

Depending on the size of the organization, filing a report on what they learned from each person may be a bit burdensome – but reporting out in whatever method can only be helpful. It would be even more helpful if both sides of the conversation were captured.  One of the most efficient methods I know of measuring someone’s character is to put them in a situation where they are learning and where that knowledge is challenged by others.

Too many times, people (myself included) fail to respond with the attitude of wisdom that is necessary to prevent huge blunders in the future.  Most candidates will experience flight or fight – both of which can kill a startup. Finding a way to corral dissension and manage pushback is essential to scaling an organization.

A common theme has been running through several of my conversations lately. Whether talking about tribe mentalities, financial bubbles or strategy, the conversation is always about the grand ideals of innovation against the grubby details of imitation. The trouble is when those two things are seen as extremes and polar opposites.

Perhaps one of the most dangerous to happen to these concepts was our inclination to put them as points on a line. You are either innovating or imitating. In reality, all innovating involves imitation and all imitation is necessary for innovation. Innovators being pissed about imitators in the marketplace then have an ironic frustration.

Strategic folks often talk about the first mover advantage. What happens in large effect is the first movers disadvantage. They took a lot of time and effort to explore what didn’t work, what wasn’t viable and wasn’t a good marketplace product.  Then they priced it high because there was no comparison product or anchor. So high in fact, that it allowed a competitor to swoop in and scoop up market share as a fast imitator.  As the early innovators hand ideas off to early competitors (whether they like it or not), older markets, customers and products are pushed down the daisy chain of an industry. Eventually, it pushes everything down to where it is a commodity, which blows the doors wide open for creating value in ways that no one ever expected.

For a new read on this, check out copycats, the new book by Oded Shenkar.   For older reads, check out Crossing the Chasm by Geoffery Moore.  You may also appreciate the TED talk by Mike Rowe of Dirty Jobs fame. He does a great job of describing the beauty of imitation in the work life.

For real innovations to work, they have to be innovating on a bedrock of imitation – in the mind of their customers, their investors and their industries. Until you find the imitation bedrock for your innovation and learn to talk about it as a direct improvement, it will likely be a difficult thing to sell to your adoring and waiting customers.

While my startups are still in stealth mode, its been tough to describe what I’ve been doing. So in the meantime, here is an update on some of the extra-curricular activities that have been keeping me busy.

First, we launched a speaking series on the complex issues of humanitarian aid, poverty and development.  And people came, listened, talked and wrestled. And they will tomorrow too…

Then, I performed as a  judge for several rounds of the Dell Social Innovation Competition.

Then, I threw my application in the ring for being the Community Impact chair at Net Impact – Austin. So now I’ve got even MORE work and blogging to do.

Then a nice lady named Sunni Brown took an idea I had a few months ago about visual book summaries, ran with it and became an even bigger star.  She even got re-tweeted by Dan Pink.  What a rock star she is to have the talent and audience that when she tried something, it blew up big.  I think about Seth Godin’s remarks on getting permission to be great in the world – and she’s got it. (Which is also to say even if I had done EXACTLY the same thing, it wouldn’t have happened. The audience knew her – so it worked. Just like when I did my business models for poverty talk.)

Then, I got to hang out with Muhammad Yunus and the RESULTS crew in Houston.  The result of which is that yesterday it was on my mind to reach out to a startup virtual bank and get them involved in the US in filing a crucial gap for the unbanked in the US.  And they said yes.

Now, I’m spending my time at TechRanch trying to launch two startups – the race is on to see which one gets funded first.

Somewhere in there – I spoke at the Wilco Entrepreneurship Network, participated in 3DayStartup and lost a hard drive.

So, Mom, now you know what to tell people I’ve been doing.

A lot of research, time and effort has been poured into understanding the nature of discovering opportunities in the marketplace. Forget the traditional lines of research surveys and the like – we’ve narrowed it down to two types of opportunities. Those you stumble across either in the path of doing what you do or knowing what you know and the ones you search for.

Until Tuesday of this week, all my opportunities were looking for large scale problems and then searching for solutions that fit those. In the process of trying to create one of those – I stumbled, trip and bumbled into an opportunity. Largely because a friend said, “I want to do X…” and I said, “That could be really useful. I’m at a roadblock and it could help me do that if we tweaked it here, here and here.” Now I think its an amazing opportunity that accomplish goals that are important to us both and is one of those ideas that everyone gets instantaneously and would pay money for.

And there is the added bonus of having a project that is easy to explain that isn’t a niche solution.  I love my niches, but its hard to get anyone outside the niche excited.