Gary Hamel

I was lucky last week during the APM convention in Lyon to have got some insights from the very famous Gary Hamel of Strategos. Wall Street Journal, named Gary Hamel as the world’s most influential business thinker last year. His message could be summarised in 3 chapters: 1. Speed of change 2. Intensity of Change 3. The transition from the knowledge economy to the creativity economy.

I went through the series of articles which I held from Gary Hamel which although written in 2003 remains valid and up to date.

The challenge of systemic, radical innovation leads to two questions: How do you generate breakthrough ideas? And how do you manage that process to achieve breakthrough performance?

Innovation typically comes from looking at the world through a slightly different lens. In talking with innovators, four perspectives—four lenses—seem to dominate:

1. Radical innovators challenge the dogmas and the orthodoxies of the incumbents.

When most people think about the future, they typically take 98 percent of the industry orthodoxy as a given. Before they start, they’ve already limited their potential for innovation to about 2 percent of the available “space.” To innovate, you need to spot the absurdities that no one else has spotted, to ask the stupid question that no one else has asked, to take some existing performance parameter and push it so far that suddenly you have illuminated a new possibility.

A good place to start is by looking for trade-offs, situations where a competitor is telling itself or its customers, “You can have one or the other.” Twenty years ago, the U.S. auto industry said that you could have either quality or low cost. Toyota offered both. The U.S. airline industry said that you could have the lowest fares or the highest customer satisfaction. Southwest managed to deliver both. When you hear “or,” it’s an invitation to innovation.

2. Radical innovators spot trends that have gone unnoticed. I’m not a big fan of forecasting or scenario planning, because you can’t predict the future, but you can ask, “What things are already changing that most people (especially my competitors) haven’t noticed yet?” The way to find new answers is to look where your competitors aren’t. Every CEO needs to spend some time on the fringe of technology, entertainment, fashion, and politics where new possibilities first present themselves.

3. Radical innovators learn to live inside the customer’s skin. This is not another plea to be customer focused. Getting “close to the customer” rarely provokes real innovation, because you’re talking to customers whom you already serve, and you’re listening to what they’re saying—not paying attention to what they’re feeling.

Innovation almost never comes from an articulated need; it comes from an insight into an unarticulated need. We never asked for eBay, Starbucks, or downloadable music, but somehow, we got those things. Radical innovators have a boundless empathy with human frustration that allows them to see beyond articulated needs to the unexpressed need.

To get to the unexpressed need, you must develop an experiential sense of what it means to be a customer. My company recently worked with a major hospital that was trying to create a more customer-centric experience. We took a slice of the hospital’s employee base—a dozen or so people—and we asked them to list their 10-best service experiences. Maybe it was a day at Walt Disney World or a first-class flight to London on Virgin Atlantic. Then we asked them to take cameras and notepads and go enjoy some of those experiences. Anytime something they experienced evoked a great feeling—anytime they felt respected or had their expectations exceeded—we asked them to take a picture, make a note, and tell us exactly what happened.

Next, we asked the same team to live through the experience of being patients in their own hospital, to lie in bed with an IV, to use a bedpan, to traipse around in one of those gowns that flap open in the back, to put up with a procession of medical personnel poking and prodding them. Not surprisingly, the inpatient procedure teased out some not-so-great feelings. You have to do two things to get at deep, unvoiced needs: Get an experiential insight into what it feels like to be your own customer, and assemble an inventory of first-person analogies (like the Disney World or the Virgin experience) from which you can draw out potential solutions.

People get the courage to try new things not because they are convinced to do so by a wealth of analytical evidence but because they feel something viscerally. Until you feel something in your gut, until you’ve experienced it and know it to be true, you simply won’t have the courage to act.

4. Radical innovators think of their companies as portfolios of assets and competencies. The real foundation for growth and innovation consists of a company’s assets (its brand, its customer relationships, its subscriber database) and its competencies (its skills and the ideas that are locked in people’s heads). One trick you can use is to think of the world as a Lego kit of different competencies and assets, owned by different companies, that you can put together with the skills and assets that already exist in your company. One company that has done just that is Swatch.

Revolution/Evolution

CEOs are starting to understand that without radical innovation, decline is inevitable. We all must start to take innovation more seriously.

Still, barriers to innovation seem to be everywhere. But what sustains me—and everyone who wants to build an organization that is consistently innovative and allows us to bring the full measure of our creativity to work—is this: There was no such thing as a large corporation 150 years ago. There was no AT&T, GE, GM, or Sony. These are products of our imagination. We invented them—and we can reinvent them. There’s no law of nature or act of God that keeps us laboring in organizations that treat people as mere factors of production.

Let’s respect that the large corporation has brought us unmatched material prosperity. If you have two cars, three televisions, and a couple of PCs, you have industrialization to thank for that. We have built companies that can efficiently churn out products and services by the zillions. But in building those companies and in reaping those efficiency gains, we have also made a burden for our own backs to bear.

We’ve produced organizations that aren’t much fun to work in and too often fail. And as they fail, so do the aspirations of the people who have devoted their lives to building them. What we invented can be reinvented. We should take revolutionary steps to achieve evolutionary goals.

We’re not going to build companies that are capable of systemic, radical innovation in one gigantic leap. We’ll get there the same way we have gotten to total quality and real customer service: through a series of steps where we build the new skills, metrics, processes, and values that turn rhetoric into reality.

The challenge is to know where you’re headed, so that those steps can lead you in a new direction. And then, one day, you’ll find yourself in territory where no one has gone before.