Chatted to Marty Neumeier, president of the design think-tank Neutron last week, and we discussed a new list he and some colleagues at Stanford University put together of “wicked problems” that plague businesses everywhere. Having surveyed 1500 CEOs and senior business leaders, they came up with a list of ten problems “so persistent, pervasive, or slippery” as to seem insoluble.
We discussed a couple of the problems in last week’s Innovation of the Week podcast, and we chatted further offline about some of the others. (Apologies — I fully intended to post this to accompany the podcast going live, but instead I got walloped by the nasty flu that’s going round and spent the week in bed.) Anyway, check out Marty’s take on some serious issues:
Balancing long-term goals with short-term demands Sustainable earnings can be addressed by serial innovation. This problem can be addressed by becoming a “designful” company. By avoiding being merely a “deciding” company, you can create sustainable earnings because you’re always innovating.
Predicting returns on innovative concepts This is about design rigor and the design process. If you do your homework, come up with a range of options, prototype them, test them with customers… then you end up de-risking innovation. Of course you can never totally predict the returns of innovation as there’s no past measure to measure against. But after you’ve de-risked an idea, release it in a stagegate, venture capitalist way. If you get good feedback, spend a little more, then more and so forth. If it doesn’t look like it’ll get through the gate, shut it down.
Innovating at the increasing speed of change Over the last century, companies focused on ownership: the means of production; factories; patents. They owned money, basically. That’s not going to help you when things are changing quickly. So take the focus off ownership and put the onus on agility. There's a big shift here from lone ranger creativity to networked creativity.
Winning the war for world-class talent Have a bold vision. Take Google's mission statement: "to make all the world’s information accessible." That’s going to be a lot of work! But that's what they tell everyone they're doing -- and they give employees responsibility. But also, companies should train people from within. Take people with potential but not necessarily recognizable or demonstrated talent and have a training program that brings them on rapidly. GE has a super executive training program which teaches management -- and the company culture.
Combining profitability with social responsibility Treat responsibility as a design opportunity or a cultural opportunity. Fact is, good design is virtuous design. If a company is designed to be good, it can do a lot for sustaining the company and can give it a long term future. But it can also be good in the short term.
Protecting margins in a commoditizing industry This is a matter of branding and innovation. If your products are differentiated and new, margins stay high. When they’re commoditized, margins go down. My definition of a charismatic brand is that if it disappeared, people would want it to come back. Apple's a good example.
Multiplying success by collaborating across silos This is the elephant in the living room. Companies have all this knowledge and skills distributed throughout a company, but it's locked into silos because of the way people are rewarded. Generally, companies have no culture of collaboration: Everyone's working on their own so a company doesn’t get the power of multiplication. Remember the saying: Intelligence shared is intelligence squared. The way to collaborate is basically rewarding people differently. Redesign the reward system so you don’t just reward individual performance, you reward assists too.
Finding unclaimed yet profitable market space The question of where to find profitable market space takes analysis and prototyping. If you find a space where nobody’s acting, it could be because there’s no potential market or that no one has seen it. So try. Sketch. Map. Mock up. See if it works and see if it makes sense relative to your mission and who you are. Perhaps surprisingly, there is an extraordinary amount of white space out there. So turn mental models upside down and have the courage to try.
Addressing the challenge of eco-sustainability Take a company like Applied Materials, which makes the machines that make the materials that go into everything. It'll be the company that enables a truly green manufacturing movement.
Aligning strategy with customer experience This one's about creative collaboration and bringing the customer into the design process. That hasn’t happened as much as it should. In the old world the lone hero designer had a hunch and would do something without considering the audience. That turned into a company approach of "we know what’s right, we know what people want, research can’t help us". Apple still does it that way –- "who needs research? We have a hunch." But they also have Steve Jobs, who has a nose for customers and is personally so focused on making cool stuff for people, that substitutes for having consumers in the mix. You can do it that way but it’s not scaleable or transferable.