CMO 2.0 Influencer Conversation with Steve Shapiro, author of Best Practices Are Stupid

Written by on September 28, 2011 – 7:56 pm -

steveshapiro(Re-posted from the Collaborative Innovation Community) It was a pleasure to interview Steve Shapiro about his latest book – Best Practices Are Stupid. I love the title, although for reasons that are slightly different from the reasons that Steve gives in his book. For him, implementing best practices is copying what others have already done and therefore not the best way to innovate. For me, best practices are so context sensitive, that it is really hard to recreate them within a different organization. Companies are better off understanding worst practices and avoid those rather than recreate best practices – no matter how you look at it.

Many companies try to innovate by asking customers and employees for ideas – not a good practice when it comes to innovation. As Steve explains, when you ask people for ideas you end up with a whole bunch of really bad ideas. The signal to noise ratio in open ended idea generation campaigns is typically very low. The sheer volume of ideas that needs to be sifted through to find the good ones would stretch the organizational capabilities of most innovation departments – creating frustration among those who have to manage the process. Not only that, but the low number of ideas that typically gets implemented also frustrates the idea submitting community, who feel like they are not being listened to. So frustration all around and poor results – maybe it’s time for companies to STOP asking for ideas.

Instead what companies should do is focus on giving employees and customers business challenges – problems for which you are actively seeking solutions. A good example of that is when Netflix launched its $1M Netflix prize to get outside teams to help them refine their recommendation engine by 10%. Not only did they only pay for results, they also outsourced the failures that are typical with the serial trial and error nature of  innovation processes. In the podcast we discussed the differences between innovation tournaments and innovation bounty campaigns and when to use one over the other or when to set them up as competitive challenges versus collaborative challenges.

We also talked about the power of the crowds in innovation, and how crowds are notoriously bad at helping you find the good ideas among a mountain of ideas. If you use the simple voting up and down system, like the ones that are very popular in crowd-sourced innovation programs, you often end up with the most popular idea – not the best one. A better use of the crowd is to have them help you identify the duds – something they do really well.

It is amazing to realize that the main reason for new product and service failure is still “not meeting customer expectations.” While companies are getting better at doing market research, most need to change as their “market research really sucks.”  Instead of asking people questions that make their conscious part of the brain find an answer, which is not the part of the brain that makes buying decisions, companies should use anthropological techniques and metaphor based methods to uncover people’s unconscious needs. They also need to get out there and talk to non-customers instead on blindly focusing on their in-house customer data.

Motivators are another important factor to understand when managing innovation – and companies should understand the limitations of monetary incentives to stimulate proper behavior.

Steve closed the conversation by talking about USAA and how they found a way, through an innovation center for excellence and innovation ambassadors within the business units, to make innovation part of their DNA. This should be the ultimate goal of companies looking to change their practices. As an organization, you need to create an adaptability to change that will match the rate of change that is happening outside your corporate walls.

Other things we talked about include:

  • How companies who are 2nd or 3rd in their markets need to change the game in which they are playing rather than to play by the rules of the leader
  • VC like boards in innovation management initiatives
  • How Innovation Centers and giving people 15 or 20% of their time to innovate outside of their area of responsibility is better for recruiting purposes than for actual innovation
  • How measurements can kill your innovation initiative
  • How you need constraints to foster innovation
  • How expertise and innate cognitive biases can kill innovation
  • The importance of culture in innovation

You can listen to this podcast on the Collaborative Innovation Community.

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Posted in CMO 2.0 Influencer Conversation | 1 Comment »

CIO 2.0 Conversation with Dan Greller, Consultant, Speaker and former CIO at Legg-Mason

Written by on September 27, 2011 – 12:57 pm -

dan_grellerDan Greller, the former CIO at Legg Mason, and currently technology innovation consultant, speaker and writer (with a great blog), was kind enough to join me for my second CIO 2.0 Conversation.

Dan has 30 years of experience managing global technology organizations, mostly within the financial services industry. Having first entered the job market when the debate between mainframe and desktop computing was raging, Dan has seen his share of technology innovation battles – which made it particularly interesting to discuss this latest battle between innovation and control taking place within most companies around adopting new technologies.

According to Dan, that balance between innovation and control has remained the hardest balance for CIO’s to manage. Between the increasing demands that organizations put on their IT departments and their CIO’s, the accelerating pace of change, and the ease with which employees can now bypass their IT department – that balance will become harder to manage, not easier.

The consumerization of IT, which refers to the phenomenon that consumer technology innovations are increasingly driving enterprise tools development, and also to the fact that many employees now expect their personal tools – their phone, tablet and home laptops – to work within their work environment, is clearly here to stay. The user experience that enterprise tools provide sorely lacks the experience that consumer services provide. Think of doing a Google search vs searching for content in your corporate knowledge management system, compare your corporate procurement process with the Amazon buying process, or look at how your corporate software provisioning differs from the experience you have in the iPhone or Android app stores. There is no comparison, and it is that difference in experience that leads to the consumerization of IT. CIO’s react to these forces in different ways – some say NO, and some put their head in the sand. Clearly neither one of those strategies is a workable strategy. Both will leave your users dissatisfied and relegate your IT department to irrelevance. CIO’s need to partner with key constituents and business unit owners and decide on strategic technical directions that match the culture of the company and deal with the risks associated with those strategies – human resource (HR) risks, compliance risks, legal risks, reputation risks, security risks, IP leakage risks, etc.

Risks are a thorny issue for many companies, and one that can stop innovations in their tracks. Many people, who by nature are averse to change, will hide behind potential risks, often unreal ones, to avoid having to deal with that change. In assessing risks, Dan suggests that people look at the Netflix manifesto about their culture, where they talk about a concept called the waterline. The way they look at decision-making and risk is that they think of their company as a boat, and they think of decisions being above or below the waterline. If a decision is below the waterline, then the risks of having something go wrong is much higher than if the decision is above the waterline.

We then talked about the changing role of IT and CIO’s as it relates to shifting their position from order takers to strategic business partners. CIO’s need to be the leaders who understand technologies and how they apply to the business. They need to be the ones that recommend and provide guidance on how to leverage social computing, mobility, universal access, cloud computing and “big data” as part of business processes.

Social computing should be on every CIO’s agenda, not because it’s a fad, but because eventually it will have to become part of every enterprise process and the systems that support them.

On the topic of measurements, Dan believes that there are two types of measurements – hard measurements and the anecdotal comparisons with peers. And while Dan is not a big proponent of hard benchmarks, which would require the ability to compare apples with apples, something that is virtually impossible in diverse organizations,  he does believe that comparisons with other people and companies in your industry are important. This makes sense in a competitive environment where the winner is the one that can stay ahead of the others. One of the most important measurement criteria for IT departments should be customer satisfaction, but that needs to be balanced with metrics that reflect the increasing strategic partnership that needs to exist between IT departments and the business units.

Culture trumps all and CIO’s should be thinking about culture as part of everything they do. It is what motivates people to do what they do, and it is what ultimately determines the effectiveness of all organizations. Dan believes that companies should listen to Daniel Pink when he says that people have three motivations, autonomy, mastery and purpose. They want to have a say in their destiny, they want to be recognized as a master in certain fields, and they want to be connected to a higher purpose. It’s important to have a culture that understands and promotes those values, both for your employees and also for your customers.

To create or change a corporate culture, you need to articulate where you want the culture to be, communicate it clearly with your employees, walk the talk, and reward and recognize behavior that supports that culture. The latter is especially important for IT departments, where metrics around on-time delivery and zero tolerance for failure have often stood in the way of creating a collaborative and innovative culture.

Dan ended the conversation with a few pieces of advice for IT professionals – don’t just focus on the bits and bytes, but focus on humans, their cultures and their biases; reach out to other disciplines like psychology and economics; think beyond your technical expertise when you think about the competencies that are needed to get your job done.

Well said.

Other things that we discussed include:

  • How smart companies now deal with risks through a combination of education and guiderails rather than through policies alone
  • The importance of e-discovery and archival systems in regulated markets
  • The positive aspects of operating in regulated environments where everything gets recorded on business communications
  • The importance for CIO’s to stay abreast of what happens to their industry by networking with peers
  • How companies and individuals deal with innate human/cognitive biases like the confirmation bias

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Posted in CIO 2.0 Conversation | 4 Comments »

CIO 2.0 Conversation with Shirley Cunningham, CIO at Monsanto

Written by on September 12, 2011 – 12:04 pm -

shirley-cunninghamMy first CIO 2.0 conversation with Shirley Cunningham, the CIO at Monsanto, was truly a 2.0 conversation. Shirley has a rich background. Hailing from Scotland, she held many positions in MIS departments (Management Information Systems) across various industries before joining Monsanto in the late 90′s through an acquisition. She became the global CIO 3 years ago.

As CIO at Monsanto, Shirley is a member of the strategy team. Becoming a member of the strategy team came with a change in role for  IT – that from being an order taker to a strategic partner sharing responsibility for the business’s growth. They morphed from being the implementers of ERP systems and other technologies to a team that now worries about customer space transformation though information and technology, advanced decisioning, and customer and product pipeline. And while the IT department at Monsanto supports all functions, most of its resources are dedicated to R&D and the customer space.

Being a strategic business partner rather than a support organization requires a deep understanding of the business – that is why over 35% of Monsanto’s R&D IT group has science backgrounds with 10% having PhD’s. They don’t just support the product development process – they are a key driver of it. This shift from being a more traditional IT department not only required a whole new level of leadership; it required a complete mindset shift. If you would have asked a random person in IT what they were doing a few years ago, they might have answered “I am an Oracle DBA.” Today, you are more likely to get the answer “I support a system that helps us collect $3.5B in revenue.”  People now think of their jobs in terms of the value that it delivers to the company, which is not just great for the company, but also energizing for the individuals. And therein lies a virtuous circle – when people are more energized, you have more innovation, more creativity and thus more energy and excitement.

They have a metric-driven culture. Not just one where they focus on understanding the cost of transaction and other classic metrics, but one where they measure the outcomes and values of technology usage. So they will measure the value of being able to assemble a genome on their product pipeline and their ability to commercialize products. A dedicated, and very agile, enterprise information management group helps them do that.

Word of mouth is very important in the agricultural space – with most of it happening in coffee shops. As some of those conversations are moving online, it will be very important for Monsanto to have a seat at those virtual coffee shop tables. That is one reason why Shirley thinks there is a lot of value in having employees be active in communities and social media. They are still in the early days, but plan on developing this capability in the future.

Monsanto is of course known for its culture of innovation – which is driven by its overarching goal to double the yield in agriculture within the next few years. They are passionate about innovations that impact sustainability and they think really big when it comes to their mission. This “change the world”  type attitude makes for a great innovation culture – one in which people constantly think beyond the boundaries. It also helps with the type of people they attract to the company.

Monsanto actually started an innovation lab – which is unencumbered by corporate standards – and where people can work on getting early proof of concepts. Employees first submit ideas to peer review, after which a VC-like board approves funding for further development.

Innovation at Monsanto is not contained to its corporate walls – they also co-innovate with suppliers and academia. Cross-enterprise innovation takes a lot of effort on both parties, and there always needs to be clear win for both of them.

Another interesting aspect of Monsanto’s culture is the fact that they are  non-hierarchical. They have been operating that way for 15 years and they seem to be one of the only companies that has been able to achieve this at scale. Solid lines and dotted lines like you would find in typical matrix organizations are non-existent – everyone has multiple solid lines. Those employees that come from more structured organizations take a while to get used to this non-hierarchical structure, but ultimately it makes for a great place to work. People know that they can walk in and talk to anyone, including the executives.

In closing Shirley had a few words of advice for executives at other companies – CIO’s need to step up and take ownership for things that they traditionally would not have done before so that they can have a bigger impact on the business, and they need to take more risks.

Well said – Shirley is clearly a 2.0 CIO.

Other things we talked about include:

  • What worked and did not work with the “two-in-a-box” concept of pairing up a business leader with a technology leader
  • The consumerization of IT and how all companies will have to be ready for that
  • How they deal with risks, like IP leakage risks, through awareness and education
  • The importance of being active on a local community basis while being a global company
  • The role of rewards and recognition within an innovation culture
  • The importance of a successful collaboration culture in an innovation culture
  • The role of values and the importance of reinforcing those values to ensure a good corporate culture

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Posted in CMO 2.0 Conversation | 2 Comments »

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