Jeanne Liedtka, a faculty member at the University of Virginia's Darden Graduate School of Business and former chief learning officer at United Technologies Corporation, recently spoke to the Dental Trade Alliance gathering in Napa, Calif., on "The catalyst: How you can lead extraordinary growth." Following are some of her comments she shared with the audience...
Most managers have one of their top three issues how they can grow their company organically. There are lots of different ways to grow a business, and often innovation is one of the more attractive ways to do that. Innovation in our world is not something novel. Novel doesn't matter to managers or customers unless it creates better value for them. Innovation has to be able to grow profits for a business. Think about wheels on luggage. How long have wheels been around? How long has luggage been around? It took us forever to figure out wheels could go on luggage, but think about how much value that has added for people.
Why is finding growth so hard? Sometimes it's hardest for the most high-performing organizations. Organizations that aren't good at what they do usually don't want to figure out how to do things better. An idea is a way to create a better future, and we can never predict that an idea will have a good ROI. In the end, the finance people will always win that argument. You can't build a case for a better future without a few loopholes in there because no one can predict exactly what will happen with an idea. No one ever grew their business from a conference room. That idea has to actually leave the building.
How do we find better ideas and then how do we actually let those ideas see the light of day?
With R&D-driven innovation, you start spending way too much time on what you care about versus what matters to the market and your customer.
The biggest enemies in any growth environment are the other people in the organization who prevent those ideas from becoming reality.
A lot of what we're talking about regarding new ideas is common sense to a single entrepreneur, but it is often gets twisted and diluted in large companies.
The kind of ideas we see are not independent of who we are. We all see things differently based on our life experiences.
If my company can do something my competitors can copy exactly, I will have a little bit of a head start but that's all I will have. The premium pricing comes from doing something that no one else can do.
The old line of thinking is that you have to have something perfect before it is launched. The best way to spend a lot of money foolishly is to fully develop a product without any type of feedback and tweaking prior to launch. These products fail because the customer doesn't find the value in the product that we believed they would.
Predictions can only be done with data from the past, but the future will always be different. As we move into a much more complex, crazy world, the old toolkit simply doesn't work any more.
Focus groups have a 50 percent error rate. When we ask customers for input, they are notoriously bad about getting us good answers. The problem is that most of us as customers don't know exactly what we want ... other than lower prices. If all we had to was create value for our customers, we would go out of business.
The only thing harder to do in most companies than starting a new product is killing an old one. Think of all of the zombie products walking around your company. Sometimes, you have to be able to call your own baby "ugly."
Time to market is important, but it's not always about that. Getting to speed with successful products means sometimes going slower and experimenting before something reaches market. Speed of learning is more important. Speed can be a trojan horse. Who can be against speed? If you want to get faster, you're entering dangerous territory. When you commit to speed, the whole game shifts. Speed and doing things correctly don't always go hand-in-hand.
Catalysts often see the growth potential that has been there all along. They see something that was always there, but no one else saw or acted upon.
Somewhere in grade school, we pick up at our mindsets that will last us for a lifetime. Those mindsets will form our habits for years and years to come. There is the "growth" mindset where we believe life is a journey of learning. The growth mindset also sees customers as people. There is also the "fixed" mindset where we believe life is a test and we should do whatever we can to avoid looking foolish. The fixed mindset sees customers as data.
Think about people who buy drills from Home Depot. All they want to do is make a h***. When you only think about drills and not how to help your customer make a better h***, you're not focused on your customer.
None of us are trying to find ideas that are going to stay small.
"Design thinking" is a systematic approach to problem-solving. What would be different if managers thought more like designers? Problem-solving would be driven by empathy (deep understanding of human needs), invention, co-creation (inviting customers into the process), and iteration (use the first solutions only as stepping stones to better solutions).