Peter Skarzynski and David Crosswhite: An interview by Bob Morris, Part Two

Posted on: June 13th, 2014 by bobmorris

Skarzynski

Peter Skarzynski is a founder and Managing Partner of ITC Business Group, LLC. He advises large, global organizations on strategy, innovation and organizational change and is recognized as a leading expert in enabling organizational renewal and growth through innovation. His experience cuts across industries and includes technology, consumer products & retail, healthcare, energy, financial services and transportation companies. His primary focus has been to help client organizations renew their core business through competence leverage and break-through business concept innovation. He has led and delivered client work in Asia, The Americas and Europe. Before co-founding ITC, Peter was CEO, Chairman and a founding Director of Strategos, a firm initially chaired and founded by Professor Gary Hamel. He also served as a Vice President in the strategy practice of Gemini Consulting and held several senior-level consulting roles in its predecessor, the MAC Group.

A frequent corporate and conference speaker, Peter has written thought pieces for The Wall Street Journal, CEO Magazine, and The Drucker Foundation. His 2008 book, Innovation to the Core: A Blueprint for Transforming the Way Your Company Innovates, was the first to describe how large organizations can build and sustain a company-wide innovation capability. Peter holds an MBA in Finance and Marketing and a BA (with Honors) in Policy Studies and Economics from the University of Chicago.

Crosswhite

David Crosswhite is an experienced management consultant with more than 20 years of work in the field of growth-focused strategy, innovation, and innovation capability development within large organizations. He is a currently a Managing Partner of ITC Business Group, LLC and a former Managing Director of Strategos. His work focuses on assisting clients with their growth strategy and strategy development processes and systems. His work in this area spans multiple industries, including consumer products, durable goods, healthcare, medical devices, financial services, and heavy manufacturing. David’s experience cuts across B2C and B2B sectors. His work with the Whirlpool Corporation is well-known and documented in Strategic Innovation: Embedding Innovation as a Core Competence in Your Organization, authored by Nancy Tennant, EVP of Leadership and Competence Development for Whirlpool. His work is also heavily documented in Innovation to the Core, and in multiple Harvard Business Review cases and other business journals. .

Prior to Strategos, David was a Principal at the MAC Group and Gemini Consulting in their strategy practice. At MAC/Gemini, David focused on marketing and process design for growth issues in the telecommunications industry. David worked domestically and internationally across many of the major telecommunications providers to develop their go-to-market, service, and product development strategies and processes.

David earned his MBA at the Kellogg Graduate School of Management at Northwestern University, and holds a BS in Electrical Engineering from Lehigh University.

Peter and David’s most recent collaboration is The Innovator’s Field Guide: Market Tested Methods and Frameworks to Help You Meet Your Innovation Challenges, published by Jossey-Bass/A Wiley Brand (2014)

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Morris: Briefly, please explain to what extent the methods and frameworks in The Innovator’s Field Guide have been “market-tested.”

Skarzynski:
It’s fairly road-tested. First, the principles reflect leading practices across organizations of all stripes. Not just the ones mentioned in The Guide but others we researched but, could not put in to the book because of space constraints.

Crosswhite: The frameworks reflect our expression of ways to action the the concepts and principles articulated. And, as we say in the book, these or other frameworks are scaffolding for individuals and teams. They help you ensure that you are asking the right questions. But its all about the right questions and the new learning they facilitate.

Morris: You introduce and discuss nine Principles of Innovation (i.e. “why you are doing what you’re doing”). For those who have not as yet read your book, please suggest what is the key point to be made about each. First, articulate a clear definition of innovation

Crosswhite: What outcomes do you want from your efforts? What constitutes innovation for your organization? What qualifies as “what you want” when you – your organization – says it wants innovation?

Skarzynski: Yes. What is the job you want innovation to do for you and your organization.

Morris: Aim your efforts at the business concept, and focus not just on the “what” but also “who” and “why”

Skarzynski: Innovation efforts fall short when you lock on a single focus. Technology companies think too much about technology, for example. Product companies think about what’s the next product or product iteration they want to introduce.

Crosswhite: To Peter’s point, in the work of innovation consider all aspects of the business concept and model. Not just the “what” of product; not just thinking of ‘new’ products. But, new targets (who) and new benefits or reason to believe (Why). Take the time to consider all dimensions of the business concept and business model. In doing so, you’ll open up the aperture of innovation for your organization a great deal more.

Morris: Understand that innovation means new learning

Crosswhite: If innovation is about “new and different” that means you need to build new, foundational learning. You have to ask new questions about product market and industry context. We share techniques about how to ask new questions in new ways, systematically, in the guide. But our view is, no new learning, no new innovation. Or not much, at least. .

Skarzynski: Christensen speaks to new learning through the “jobs to be done” framework. Think of the job the customer is hiring the product or service to do. Ask yourself, is there a better way to perform that job. This type of thinking is fundamental to disruption. It is a mirror to “Design thinking,” which has become mainstream in the last five years.

Morris:
Earn the right to ideate through insight-driven innovation

Skarzynski: Before you go to ideate, have an insight based POV. Make that your foundation to ideate

Crosswhite: Yes, it goes to the “new learning point.” No new learning, no new ideas. Give yourself a chance to break frame first. Gain some new bases for the conversation. Then go have the conversation. Putting people in a room to develop new ideas without new learning in hand is very likely to yield the same old ideas and conversations. Why wouldn’t it?

Morris: Make the work of innovation not merely the generating of new ideas but an end-to-end process through to successful commercialization

Crosswhite: As a starting premise, we think of innovation as a new idea, realized in market. If you start there, then the work of innovation is not just ideation. It’s the end to end work of developing the new idea, getting it to a point of action, and then implementing. Or testing, iterating, and implementing if that’s what’s called for. That’s an end-to-end process, not just an ideation process.

Skarzynski: Which is worth highlighting as a key principle since so many organizations, and even consultancies either implicitly or explicitly think of innovation as just getting some new ideas, some new post-it notes, created. And then the rest is “just execution”. We believe that’s a mistake, and there’s a better way to frame the work of innovation to get you more meaningful results.

Morris: Build innovation capability through a learn-by-doing approach

Skarzynski: In practical terms this is the best way for an organization to get innovation and capability that stick. Pick meaningful innovation issues and topics, frame them, and apply the right techniques and approaches to work the issue. It gets you results sooner, and capability that is deeper and more sustainable. It beats a classroom training format any day of the week in terms of results achieved for the organization.

Crosswhite: Nothing to add. Agree in full.

Morris:
Be systematic and systemic in your approach

Crosswhite: Be systematic: Adopt specific, tangible, tried and true techniques that attack the issue in a deliberate and organized fashion. The Guide, of course, puts forth techniques to apply to common challenges. But most important is that you have a point-of-view about the actionable approach you want to take to the challenge. Be systemic: Look for all the appropriate levers to apply to your organization to achieve sustainable innovation capability. Not just process and tools only – although these are important levers. But skill-building, leadership engagement, metrics, incentives, communications, and multiple others. Use as many levers as you can avail yourself of to create the most sustainable and robust innovation capability.

Skarzynski: And a key to the systemic point is that of making sure the combinations of specific organizing actions – Dave refers to them as levers –you choose align and work well with one another. In other words, they’re specifically selected to work with the grain of your organization and synch up with one another – as opposed to inadvertently “fight” one another. This sounds obvious but too many organizations think of selecting organizing levers for innovation as an exercise of simply picking from a set of menu items those that you deem most attractive to pick. And it’s really a more in depth design exercise than that. We speak about this a great deal in Chapter 8 – which speaks to “Organizing for Innovation”.

Morris: Embrace and employ Open Innovation (OI).

Skarzynski: Briefly, the notion is the pool of know how and talent in a given domain is massively larger than that which is present within your particular organization. In a hyper-competitive world, tapping in to external talent (IP, especially) is value-creating. We share a brief example from Mondelēz. Henry Chesbrough pioneered this management practice, of course, and he leads a center focusing on open innovation at Berkeley. And of course P&G among others leaned hard in to it.

Crosswhite: In addition…and again, borrowing from Henry, organizations successful in OI first must become “open” internally before being open externally. Open internally means success at working across organizational silos and, critically important, being as comfortable working across networks as working within traditional hierarchies. Success in OI takes time and requires smart, fit-for-purposes changes to internal processes.

Morris: Of the nine, which seems to be the most difficult to follow? Why?

Crosswhite: They are all hard. And for any given organization, one may be more difficult but, they are all hard.

Skarzynski: For sure they are all difficult. But they are not impossibly so. And the best way to build your skill is to get going. Pick a challenge or area of focus…and aim your efforts at that challenge.

Morris: You also invalidate a number of misconceptions about innovation. Misconception #1: Innovation is about tools and process only. What in fact is true?

Skarzynski: As we mentioned before, innovation capability is about leveraging as many organizing actions at your disposal as you can, systemically. It’s about process and tools, skill-building, leadership, measures, communication, priority setting. But well beyond simply installing a process.

Crosswhite: I like to say “skills more than process and tools”. Innovation process and tools are scaffolding, and tremendously helpful to skill-building. But focus first and foremost on your skill-building at asking new questions, using new insights to create new ideas, and getting those ideas framed and elaborated into an actionable state for the organization. This is a tall order, and a lot of skill-building to do. But doable.

Morris: #2: Innovation is about technology only. What in fact is true?

Crosswhite: Its about focusing on many dimensions of innovation. Not just “what” but “who and how.” It speaks to the earlier discussion about business concept and business model

Skarzynski: Yes. Business concept innovation opens the aperture for you: Who, what, how, and why. And opens up the prospect of product innovation, technologies converted to new products or new applications. But also process innovation, new business model or new venture innovation – lots of things. Innovation considered broadly in that sense offers so much more potential than technology or product only. Both of those things are good, but we encourage organizations to capture the benefit of viewing it more broadly.

Morris: #3: Innovation is about ideas or creativity only. What in fact is true?

Skarzynski: It goes back to and end to end view of the work of innovation, which we discussed earlier. Not ideas only, or insights and ideas only. But insights, to ideas, to framed and actionable business concepts, and even in-market learning both pre-launch and post launch and scaling. That’s the work of innovation. Not just creative ideation. A great example of this is one shared by Ericsson’s Magnus Karlsson – their M-Commerce opportunity which is, essentially, one of their plays for the digital wallet. It is scaling well through an interesting ecosystem which includes an alliance with Western Union.

Morris: #4: Commercialization is about execution, not innovation.” What in fact is true?

Crosswhite: Commercialization generally and Channels, or Routes to Market, are hugely under-innovated. We make two points in the book. First, that a promising but uncertain opportunity should be de-risked prior to fully scaling. And you should do that through rapid test, learn, and refine cycles. Second, that Post Launch Innovation is an innovation practitioner’s frontier. And the techniques you use on the “front end” can and should be applied to capture more of the upside from concepts already in-market, but perhaps not being fully leveraged from an innovation standpoint.

Skarzynski: And, of course, you have to do this in a fit for purpose way. By that we mean you have to adjust the techniques to the real environment of the particular product or service that is in market.

So the point we are making about “commercialization” is that you should not stop innovating once you hit the the commercialization stage of the offering development and management process.

Morris: #5: Innovation can be delegated down. What in fact is true?

Skarzynski: We touched on it earlier. Leadership needs to engage in appropriate ways in the organization’s innovation efforts. If the organization is truly conceiving of something entirely new, and looking to launch, scale, and manage an offering new to the industry or even new to the world, how can that possibly occur with any efficacy and chance for success without leadership involvement? If it’s that new, and leaders don’t know it, understand it, and support it, you’re done, obviously. When we were doing our research on innovation at U.S. Special Operations Command (USSOC), James Geurts reminded us of a great quote from Eisenhower and it fits your question nicely: Eisenhower said that ‘leadership is infectious, whether it is good or bad,’ and we think the same is true of leading innovation.

Crosswhite: And so this may sound obvious. But it’s not. For two reasons. One is that leaders have achieved their success and positions by successfully managing the existing business or businesses and the existing models. So we’d suggest you not take it for granted that leaders will see, know, or accept truly new innovations upon first exposure to them. It usually takes work and engagement of everyone, including leadership. The most effective innovations are often non-intuitive to industry long-timers. The second reason we’d say that it’s not an obvious point is that of long-time observation. Plenty of organizations “delegate down” the work of innovation. Not a good idea. Thus worth making the point to avoid the mistake.

Morris: #6: The work of innovation stops at launch. What in fact is true?

Crosswhite: It’s really about the commercialization point above. Don’t stop with the work of new learning, and application of the new learning at launch. Don’t make that mistake. As an example, look at the Whirlpool Corporation. We quite like Moises Norena (Whirplool Corporation) framing of Post Launch innovation as “launch and love.”

Morris: Which of these misconceptions seems to cause the most serious problems? Why?

Skarzynski: They’re all pretty important. We had to work hard to prioritize down to these few to mention in the book. But if you had to pick one, the leadership engagement point is a pretty important point. Very high priority.

Crosswhite: Yes, agree.

Morris: As I indicate in my review of The Innovator’s Field Guide for various Amazon websites, I think the information, insights, and counsel you provide in the book are directly relevant to almost any organization, whatever its size and nature may be. That said, although all organizations need innovative thinking at all kevels and in all areas of operation, residents of the C-suite have specific leadership and management responsibilities.

I am curious to know what you think the single most important Take-Away is for a few of them. First, the CEO

Crosswhite: Be certain that you and your leadership have a shared view of “the job” you want innovation to do. And, over time, that you have a clear point of view about how you are “organizing” – using all the organizational levers at hand – to achieve that outcome. Leading that dialogue and effort and thought process is critical. And something that won’t get done if it’s not deemed as important at the top.

Skarzynski: And, also, that innovation stays on your agenda as a priority. The CEO is the leader best positioned to ensure cross unit collaboration – where disruptive opportunities often lay. We mention Saint-Gobain’s Tom Kinisky in The Guide; he is a good example of a CEO who stays focused on making innovation work. SPX Chairman and CEO Chris Kearney is another example. And for your readers – full disclosure – Chris was kind enough to endorse the book.

Morris: The COO

Skarzynski: Along with the CEO, make innovation a priority by way of your actions and words. Not words alone, but both. As COO, you’re in charge of making sure operations are up to standards. In that position you have the tremendous leverage to make innovation and equally important priority, not a second or third priority. But on level footing.

Crosswhite: Which is, we would argue, another “mistake to avoid”. Implicitly making innovation a second or third or fourth priority and not really on level footing. The COO is in a strong position to make sure the organization does not mistakenly do so.

Morris: The CFO

Crosswhite: Track your “innovation math” and results along with your operational math and results. Be sure you are tracking both leading and lagging indicators of innovation. If you only measure the output, it is too late to take action, if you find efforts are falling short.

Skarzynski: So, what this amounts to are things like: Do you have a pipeline of “upstream concepts” in the pipe? Is some percentage of them turning into experiments for de-risking and optimization? Is some percentage of those turning into commercialized concepts? And so on. Don’t just measure the “innovation revenue”, or you’ll find yourself empty handed too much of the time when it comes to innovation results.

The chief officer (or equivalent) for HR

Crosswhite: Stay focused on capability building to enable innovation. Rethink your high potential development program to build capabilities in a “learn by doing” way. Classroom training is good for some things. This is one where action learning is a more effective technique.

Skarzynski: And stay focused on engagement across the enterprise. In the same way that senior leadership needs a shared view of the job to be done for innovation – every one in the organization needs to understand it to. And what we as an organization are doing, activities-wise, to get that “job” done.

Morris: The chief officer (or equivalent) for marketing

Crosswhite: What constitutes “new insights” for us? How will the organization go get those? Then utilize them? How can we diversify and add to the perspectives we already have? Is anyone in our organization doing that work? If not, perhaps something to consider adding to your current portfolio of work for your organization.

Morris: The chief officer (or equivalent) for technology

Skarzynski: How am I going to “mix” what my organization develops or produces with the rest of the work of innovation in the organization? I.e., as, for example, the Chief R&D Officer, how can I proactively take our R&D new learning, combine it with the rest of the organization’s new learning – market learnings, for example, and create the newer and more innovative concepts. Said differently, if innovation is not about new technology converted to new products or offerings only, then what is the work and interaction I should be doing to make that broader look for innovation a reality, given what we – the “R&D” organization – know and do?

Morris: When Fortune’s annual rankings of companies that are most highly admired and best to work for are announced, many of the same companies are also on the annual lists of those that are most profitable and have the greatest cap value.

Here’s my question: To what extent does innovation drive the success of companies that are best to work for and most profitable?

Crosswhite:
Certainly innovation leads to a much more vibrant and exciting organization to work for, and with. It leads to growth, which creates opportunities for development and advancement. It leads to “new” and original, which has its own obvious benefits. It clearly has much higher appeal than an organization that has stagnated both in terms of thought and growth. There have been numerous studies correlating innovation and growth. I don’t know about studies which show correlations between innovation and employer appeal. But intuitively it seems to be there. Just looking at all the companies with broad ranging appeal – they’re all demonstrating growth and opportunity, and through innovation. Some of them have innovation with sex-appeal to them: Google, Apple, and the like. Some are less well known. But the story remains the same.

Morris: Of all the great innovators throughout history, with which one would you most want to share an evening of conversation if it were possible? Why?

Crosswhite: Pretty tough to pick just one, obviously. I think of all the entrepreneurs that helped make the 20th century America that we all know and prosper from. Carnegie, Vanderbilt, Rockefeller, Ford, and others. They built not just companies but actually entire industries as we still know many of them today at their core. I think it would be fascinating to talk to any one of them and understand what that was like, and what they had to go through and persevere through. There are modern day examples of course, as well. I suppose the fact that one can hear from those folks still today makes the appeal of those we can’t hear from any longer all the more intriguing.

Skarzynski:
Lincoln, for improvising continually through the Civil War while being unwavering in his goal to unite The Union and end slavery.

Morris: If you were asked to speak at an [begin italics] elementary school graduation ceremony [end italics] and explain why innovative thinking is important to personal growth as well as one’s career (no matter what it turns out to be), that would be your key points?

Skarzynski: I’d remind them of their K-8 journey. That what seemed difficult in 4th grade seems easy now. What was hard in 7th grade, you’ve now mastered. Don’t stop learning. Follow your interests. Stay with Math, Science and Humanities because the world needs thinkers playing at the intersection of these three discplines

Crosswhite: Stay curious. Ask why. Challenge the status quo and bring solutions that will make a positive difference. Innovation is a fulfilling path to personal renewal.

Morris: Long ago, Thomas Edison observed, “Vision without execution is hallucination.” Your response?

Skarzynski: There is a reason he was successful and you just showed why.

Crosswhite: Kind of a version of “innovation equals a new idea, successfully commercialized”. Ideas but no realization, don’t matter. I’m happy to say that we agree with Edison.

Morris: Let’s say that a CEO has read and then (hopefully) re-read The Innovator’s Field Guide and is now determined to establish or strengthen a workplace culture within which creative and innovative thinking are most likely to thrive. Where to begin?

Crosswhite: Leadership alignment. Make sure your leadership team is aligned on several key points: 1. What is your definition of innovation you want to achieve? What constitutes successful innovation? And then 2. What is the work that we believe the organization should be doing to “get there”. “Get there” means achieve that innovation , commercialized in market. And, build a sustainable capability so we can keep doing it. Getting alignment on those two items is on the critical path. From there, many other good things and good action will ensue.

Skarzynski: Agreed. Focus on that.

Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in The Innovator’s Field Guide, which do you think will be of greatest value to leaders in small companies? Please explain.

Skarzynski: Experimentation. It is easier to do in a smaller company

Crosswhite: I agree. I think new ideas in a small and entrepreneurial organization can benefit greatly from experimentation skills and techniques, properly applied. And it’s not necessarily too expensive or resource intensive for them to do and benefit from.

* * *

In addition to the hyperlinks, Peter and David cordially invite you to check out the resources at these websites:

Innovator’s Field Guide link

Our Growth practice link

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