CIS Update: Inspiring a Growth Mindset

2021 Virtual Speaker Series Kick-Off

Please join us for our next virtual speaker series on January 20, 1-2pm, featuring Judy Mondello, VP of R&D – Consumer Foods at the J.M. Smucker Company.

CIS Innovation Leaders

The Center for Innovation Strategies (CIS) is excited to announce a new feature of its newsletter, CIS Innovation Leaders, featuring interviews with sponsors, members and partners of our center. These dynamic leaders will share insights from the innovation front lines.

As our first interviewee, we are honored to feature Joan Smith, Associate Director of Mobility Innovation at 99P Labs. 99P Labs is a digital proving ground for mobility and energy innovators, backed by Honda and The Ohio State University. 

Please share your background and what brought you to a role in innovation.

My background is in mechanical engineering. I started at Honda R&D Americas as a reliability engineer, gaining experience as a chassis systems test engineer. This work was inherently focused on the later stages of the vehicle development process. I moved into material research to understand the early stages of development, where almost all the decisions are made about what a vehicle might look or feel like. My job was to help set the interior material strategy for future vehicles. It was in this role that I truly caught the innovation bug—because here we have to understand what our customer wants and what they are willing to pay for a product, based on the value they perceive it (and its technology) will provide. 

I realized that this impacted the efficiency with which we developed our vehicles. So I started a project entirely designed to better understand customers before we identified how we would meet their needs with the technological feature(s) that we wanted to put on a vehicle. As part of the project, we asked a student to design a hypothetical car for themselves 15 years into the future. Through this process, we understood why they desired certain features and what they would do with them. And then we were able to identify a wide range of technology at different cost points to meet those needs. We had many more options as researchers for how to solve a real need for a customer—that is where innovation started for me. We went from tech push to customer pull and built that into our research process.

This innovative work led me to my current role at 99P Labs, where I conduct advanced research in connected, autonomous, shared, and electric (CASE) technologies with our partners at Honda R&D Americas and Ohio State. 

Given your work with Honda, can you speak to its long history as an innovative company, driven primarily by the vision of its founder, Soichiro Honda? He once said “we have only one future, and it will be made of our dreams, if we have the courage to challenge convention.” What does challenging convention look like on a day-to-day basis at Honda R&D Americas and how are you bringing that to 99P Labs?

I’ll answer this in two ways. First, challenging convention is about getting out of your own head; it’s about trying not only to understand what customers desire but also what they are frustrated about. What are the pain points in their daily routine? How can we find ways to solve customer problems, and also surprise and delight them in ways that are unexpected?

The second piece of challenging convention is about anticipating future needs; it’s not just keeping up with the competition but surpassing it by focusing on the customer. How do you stay one step ahead of retaining that customer, bringing the customer joy and a level of satisfaction they didn’t know they wanted or needed until they had it?

At 99P Labs, we collaborate with other industries to create that unexpected joy.  It is in these creative collisions between two dissimilar entities that true innovation occurs. 

CIS has been fortunate to develop OnRamp, our student innovation platform, through a partnership with Honda R&D Americas that is now entering its third year. What has been most beneficial about this program and partnership?

Honda R&D Americas first partnered with the Center for Innovation Strategies in 2017, to anticipate future customer needs and trends using a CASE framework. CIS helped gather Honda engineers, Ohio State faculty, staff and students for a two-day session to generate forward-thinking ideas to fuel innovation into 2030 and beyond. Some highly innovative concepts were created, and CIS proposed a program, led by program manager Christian Lampasso, in which students would be guided through a process to validate and de-risk some of these concepts. It has been very helpful to our innovation process.

What has been most beneficial about OnRamp and our partnership is the speed of innovation and the variety of insights and ideas generated. I am consistently surprised and delighted with the outcome. Each time the students take on a challenge I think I know how they might solve it. I’ve already created in my mind the ideal solution, and yet students never envision the same solution. Every time they seem to come back with something different, better, or more creative. They don’t see the world the way I see it, and that is exactly why we tap their talent and insights.

What advice would you give to your fellow innovation leaders?

I would like to provide advice based on Honda’s management policies:

1. Proceed always with ambition and youthfulness.
2. Respect sound theory, develop fresh ideas, and make the most effective use of time.
3. Enjoy your work and encourage open communications.
4. Strive constantly for harmonious flow of work.
5. Be ever mindful of the value of research and endeavor.

I think the first principle, “Proceed always with ambition and youthfulness,” is the most important. When you can put aside your own ideas of what the solution should be and listen and empathize with the perspective of the creator of other ideas—as we do in OnRamp—you really get to the heart and soul of innovation. It can be extremely difficult to get out of your own head, but it is so important.

Respect sound theory, develop fresh ideas, and make the most effective use of time. Where this applies to innovation is that many people think that great, unique, one-of-a-kind ideas need to come from a great, unique, one-of-a-kind human. This is false. Every person has the ability to develop great ideas. It is more about the process used to draw the idea out of them than about the person themselves. OnRamp uses sound theory and an innovation process based in design thinking, lean start-up, and jobs to be done, to bring out these ideas. That process unleashes people to generate fresh ideas. It’s also important to keep in mind that ideas can die; we can “fail” an idea, and that is absolutely needed because we trust that we’ll always create more ideas. If an idea or innovation initiative is not getting traction, move on—that is using time effectively.

Enjoy your work and encourage open communications. This is about living in the moment of the idea; if someone brings an idea and it’s immediately criticized, they won’t bring an idea forward again. Encourage the ideas and let people know they are the valuable part of the equation, not the idea itself. The value is in the people and in the process, the enjoyment of the creativity, and a focus on keeping that a joyful process.

Strive constantly for harmonious flow of work. This relates to the idea that in an innovation group, the creator of the idea often isn’t the one seeing that idea through to its implementation. Those who carry an innovation forward at a later stage need to understand and value the effort to create the concept but also add value; at each stage, everyone needs to add value and recognize that it’s okay that the innovation changes as it develops. That is how harmony works; the energy used to create the idea is continued throughout its lifecycle. Continually adjust, evolve and change—this needs to be accepted by everyone in that flow of work.

Be ever mindful of the value of research and endeavor. This relates to the genesis of the name of our innovation space, 99P Labs. Research is about fundamentally learning and creating, not just producing. Mr. Honda said success represents the 1% of your work, which results from the 99% of failure. That 1% is proof of the value of all that hard work. You can’t get the success unless you have the failure; it is one and the same. So don’t let the fear of failure prevent you from achieving a larger, greater success.

Browse Fisher College of Business faculty expert commentary about the pandemic and other relevant topics at Fisher Forefront.

 MoBiz Student Innovation Sprint, sponsored by Honda R&D Americas

The Center for Innovation Strategies is pleased to host the MoBiz Student Innovation Sprint, sponsored by Honda R&D Americas, with a goal of exploring how to develop and grow a “living lab” cyber-physical proving ground to test mobility and energy innovations. Over a period of six weeks, multi-disciplinary teams of students will complete four 1-hour workshops to develop cutting-edge proposals to design and deploy smart mobility and energy systems to achieve campus carbon neutrality by 2050. Winning student teams will pitch their proposals on Tuesday, November 10 from 11:30am to 12:30pm via Zoom.

Are you interested in learning about innovative energy and mobility solutions developed by our talented students? A limited number of spots are available to attend the pitch session on November 10. If you are interested in attending, please contact Christian Lampasso, Lampasso.1@osu.edu.

What We’re Reading

How AR Is Redefining Retail in the Pandemic – Author of Augmented Human Helen Papagiannis shares how the pandemic has accelerated the prevalence of augmented reality (AR). Increasingly, companies are offering “virtual ‘try-before-you-buy experiences ranging from previewing furniture and products in your home with everyday brands like IKEA and Home Depot, to virtually trying on luxury fashion such as Louis Vuitton and Gucci. Once a nice-to-have feature, AR has quickly become an essential technology for retailers.” And the technology is proving effective at promoting purchases: e-commerce company Shopify recently revealed “that interactions with products having AR content showed a 94% higher conversion rate than products without AR.” Papagiannis notes that the next phase of AR will likely involve “gamified social experience…where you can play, explore, and shop with friends,” such as Burberry’s “B Surf” mobile racing game. “Now is the time for business leaders and brands to not only re-imagine retail, but to catapult these immersive shopping experiences into the future.”

Book Recommendation

The Power of Experiments: Decision Making in a Data-Driven World
Picking back up on our experimentation theme from last month’s newsletter, we’re immersed in recent scholarship on this topic. Authors and Harvard professors Michael Luca and Max H. Bazerman discuss the evolution of experimentation from the realm of academic research to current day, “where the randomized controlled trial has gone mainstream.” Insights from behavioral economics combined with experimental techniques have been implemented in the public and private sectors to guide choices. You may be familiar with “nudge” units that provide behavioral insights to inform not only public policy but also to “influence behavior and drive results in solving some of the most pressing issues for today’s companies, from talent management to customer retention.” Experiments are ubiquitous in many tech companies, where the digital environment is highly conducive to experiments. In 2018 alone, Google ran more than 10,000 experiments. The authors offer helpful insights on how experiments can guide organizational decision making:

1. Experiments can help evaluate an existing product or policy: “Sometimes organizations know exactly what they want to roll out. In these cases, an experiment can help measure the impact of the new policy or product and clarify both intended and unintended consequences.” For example, Uber ran an experiment to test whether its Express Pool product (which allows users to walk to a pick-up location and rideshare to cut costs) benefited customers and was financially feasible for the company.
2. Experiments test a theory or hypothesis: “Even if you have a particular product or policy in mind, it’s often helpful to understand why or how the policy is having an effect. In these cases, experimentation can help to test a specific hypothesis.” For example, when Airbnb made changes to address discrimination on its platform, it needed to test whether the changes corrected hosts’ beliefs or made race less prevalent in the decision process, in order to better understand and reduce discrimination.
3. Experiments can help develop or refine frameworks: “Experiments can also help organizations develop frameworks to apply across decisions. The more frequently an organization encounters a certain type of decision, the more valuable having a framework can become.” Experimentation allows organizations to refine existing theories and understand how they apply in a particular context.
4. Experiments can be used for fact finding where no theory yet exists: Sometimes we don’t yet have a hunch or hypothesis about whether certain messaging or product placement is more effective, for example. “In these cases, experiments can still help with fact finding to help you get a sense of what might be missing from existing frameworks.”

Luca and Bazerman also offer recommendations for enhancing the transparency around experimentation, noting “that consumers are smart: they know that companies tinker with changes in products and services and assess customers’ reactions. Companies should be held to high standards for transparency and ethics in experimentation. In turn, if they are candid about their research, they will be able to defuse suspicion, enlist support, and perhaps even deepen customer engagement.”

How are you using experiments to enhance your innovation efforts? Let us know—we would love to hear from you.

Browse Fisher College of Business faculty expert commentary about the pandemic and other relevant topics at Fisher Forefront.

 How to Run an Innovation Experiment

A leading innovation practice is to spend a little to learn a lot. This simple rule enables organizations to test many concepts quickly and cheaply while avoiding sunk cost issues. It's best to avoid overcommitting time and resources to the point that it becomes what innovation scholar Vijay Govindarajan calls “a prolonged, expensive failure.” Failure is common when testing new ideas, but to learn quickly and avoid costly, floundering projects, run your innovation initiatives as disciplined experiments. It may sound daunting, but you likely have many elements in place to do so, particularly as the pandemic accelerated experimentation and rapid innovation across your organization.

Govindarajan offers the following simple steps for running an innovation experiment:

1. List the unknowns – what are the unknowns your project faces? Do you understand the customer problem? How will your solution address the problem? What are your costs, pricing and go-to-market strategy? Who else is competing in this space?
2. Rate each unknown for uncertainty and importance – Govindarajan advises rating each unknown on a one to five scale; for example, if you are fairly certain you nailed the customer problem, rate that a one for uncertainty, but if you are less clear about the price you have established for your solution, you may rate that a five for uncertainty. Then, rate each unknown for importance, with one for less critical and five for the most critical assumptions.
3. List the highest rated unknowns first – Add up the scores for each unknown.
4. Test the unknowns with the highest scores first. Be sure to test the most critical unknowns first; in other words, what assumptions, if wrong, would sink your project?

Test assumptions as inexpensively as you can, using a series of evolving prototypes to develop, test and refine the solution.

It’s also important to avoid common mistakes with innovation experiments, noted by Nathan Furr and Jeff Dyer, in The Innovator’s Method:

• No hypothesis or metrics: Be sure to state a clear hypothesis and define how you will measure what you learn. Don’t leave it up to intuition.
• Wrong tools: Be careful with focus groups, which can get caught in group think.
• Bad samples: Speak with a relevant sample of customers. Don’t reformulate your solution too quickly; wait for a pattern to emerge and then reformulate.

Give it a try, and before long it will become second nature to say “how might we test that new idea quickly and cheaply?”

What We’re Reading

How to Foster Psychological Safety in Virtual Meetings – We’ve previously explored how psychological safety enhances innovation. Psychological safety scholar Amy Edmondson and leadership consultant Gene Daley share timely tips to ensure that “people [feel] they can raise questions, concerns, and ideas without fear of personal repercussion” in virtual settings. Virtual meetings involve additional challenges of distractions, technical delays, video fatigue, and difficulty with detecting social cues. It’s therefore important to understand the benefits and risks of virtual meeting tools. For example, you might ask attendees to use the raise hand feature in response to a question; however, for personal or potentially contentious questions, consider a yes/no response or anonymous poll. Use breakout rooms with strategic report outs of key insights to encourage connection and conversation. Consider hiding self-view in video meetings, and while audio-only calls may be a relief from video calls, be sure to solicit engagement with active inquiries. Careful planning before and after virtual meetings is essential; for example, engage a facilitator to encourage participation, or reach out to quiet participants for post-meeting feedback via email, text or phone call. “Building psychological safety in virtual teams takes effort and strategy that pays off in engagement, collegiality, productive dissent, and idea generation. The good news is that the tools and techniques that engage people — and lower hurdles to engagement — can become habitual and serve managers well today and long into the future.”

Book Recommendation

Beyond the Idea: How to Execute Innovation in Any Organization — How can organizations both sustain ongoing operations while building the next growth engine? In Beyond the Idea, innovation scholars Vijay Govindarajan and Chris Trimble offer helpful guidelines and tools for managing the two-part challenge of innovation: ideas and execution. Organizations must succeed at both, yet the authors note that most organizations are not designed for innovation execution; they are designed to be performance engines that excel at ongoing operations. Drawing on over a decade of research, the authors propose frameworks and tools to shift more focus from generating ideas to innovation execution as its own unique discipline.

First, we must acknowledge that innovation and ongoing operations are inevitably in conflict. Anyone who has worked part-time on an innovation project while managing their ongoing responsibilities is painfully aware of this. Innovation leaders should actively understand and manage this challenge in a respectful manner. While the performance engine strives for repeatability and predictability, innovation is inherently uncertain and non-routine. Accordingly, their research underscores the importance of using different organizational models for executing innovation, based on the type of project, with a specific emphasis on understanding the allocation of people’s time. The more the innovation initiative differs from ongoing operations, the more essential it is to create a special dedicated team (often with outside hires to bring in new skills and mindsets) and a special plan for execution. This does not mean that every execution initiative needs to operate as a separate “skunkworks” operation; rather the authors contend that a special partnership must be formed with active support from senior leadership, to ensure optimal leverage of existing capabilities and assets as well as a smoother handoff as the initiative scales, ideally to become the next performance engine. Govindarajan and Trimble also offer guidelines for managing and measuring innovation, noting that innovation leaders should be evaluated by assessing whether or not they are running innovation initiatives as disciplined experiments (see lead article).

Are you running disciplined innovation experiments in your organization? Let us know—we would love to hear from you.

Browse Fisher College of Business faculty expert commentary about the pandemic and other relevant topics at Fisher Forefront.

 Help Your Team Manage Stress and Enhance Employee Engagement during the Pandemic and Beyond

You’ve seen the headlines: employees are maintaining productivity while working remotely, but are working longer hours, often while balancing multiple priorities at home. Not surprisingly, leaders are increasingly concerned about helping their teams manage ongoing stress, whether they are working from home or on-site. Recent research conducted by Tracy Dumas, associate professor of management and human resources at the Fisher College of Business highlights how personal commitments can add value in the workplace and the importance of encouraging employees to step away from work. Harvard Business Review offers 8 ways managers can support employees' mental health, which includes being open about your own struggles, modeling the way with healthy behavior (for example by “prioritizing a staycation (and actually turning off email),” and offering flexibility in an inclusive manner. Work-life law expert Joan Williams points out that the pandemic has exposed the fallacy of the workplace built around the “ideal worker,” who is available continuously and full-time. Recent research on employee experience from McKinsey reveals the importance of creating tailored responses to ongoing workplace challenges, “expanding on the goodwill and camaraderie earned in earlier phases” of the pandemic. Recommendations include “identif[ying] who is struggling and what they need” by conducting frequent pulse surveys and engaging employees in a continual dialogue to foster a supportive culture.

Interestingly, talent expert Josh Bersin notes that amid historic levels of stress about health and financial security, “employee engagement is skyrocketing.” A Quantum Workplace study from late June compared “Best Places to Work data among 700,000 employees in 2019 against 470,000 employees in the first five months of 2020. It concludes, after looking at more than a decade of data, that employee engagement increased by 11% this year,” an all-time high. With high unemployment, some of this change can be attributed to sheer gratitude over having a job, but Bersin points out that “the data shows a much deeper trend. Employers are treating people exceptionally well.” Bersin notes “executives are communicating daily, raising wages and benefits, improving sick-pay, and finding creative ways to build relationships and reduce stress.”

Let’s continue to reimagine the world of work to build resilient, innovative organizations.

What We’re Reading

Create a Crisis Growth Plan: Start with Opportunity Marketplaces – To innovate successfully, companies organize around opportunities, rather than force fitting opportunities into existing structures. To that end, an opportunity marketplace is a relatively new talent management strategy that gets the right people working on the right opportunities. Schneider Electric implemented an open talent platform in 2018 that has become increasingly useful during the pandemic as hiring freezes take effect. The platform allows managers to post projects, training, and mentoring opportunities for employees to pursue according to their interests and availability. “Opportunity marketplaces offer companies the ability to learn more about the competencies and capabilities it already has. That understanding, in turn, improves management’s ability to direct talent where it can generate the most value.”

Is the Experimentation Organization Becoming the Competitive Gold Standard? – Recent research from Harvard scholars Luca, Bazerman and Thomke provides context on the value of experimentation when seeking your next competitive advantage. In experimentation organizations, data from well-run experiments inform decision-making more so than intuition or rank. Innovative, learning organizations “try a lot of things and keep what works.” Many high tech firms are highly proficient at using experimentation to enhance their digital offerings. For example, “Booking.com conducts thousands of tests every month. Evidence from a test always trumps executive opinion. Even the failures that tests often produce are regarded as opportunities for learning rather than costly mistakes. The only failure is a poorly-designed test, one with weak hypotheses, poor data, the lack of a control group, and careless analysis of the results.”

Book Recommendation

This month we’re reviewing another innovation classic, The End of Competitive Advantage, by strategy expert Rita McGrath. To stay ahead of relentless competition, companies must continually seek what McGrath calls “transient competitive advantage.” Based on her research on “growth outlier” firms, she provides an updated strategic playbook to help organizations develop a sustainable and repeatable process for capturing opportunities, exploiting them, and rapidly moving on once an advantage has lost its luster. In a transient-advantage oriented firm, resources are allocated in a way that enables rapid reconfiguration of structures, people and processes with relative ease, so that new value-creating opportunities can be discovered, validated and accelerated. Resources are managed through a central governance mechanism, rather than being held hostage in business units. Transient-advantage firms employ a balanced portfolio and real options approach to evaluating their innovation initiatives. They proactively pull resources from fading competitive advantages and put them to work on creating new advantages. McGrath cautions companies who relegate innovation to only a side game. The “growth outlier” firms developed a continuous and sustainable innovation proficiency which includes “a governance system, systems for ideation, discovery and assumption testing, for market validation and incubation, and finally for commercialization and incorporation of the new business into their ongoing operations.”

The Increasing Importance of Open Innovation

Open innovation has brought us many innovative consumer product solutions, such as P&G’s Swiffer Dusters and Mister Clean Magic Eraser, developed through their Connect+Develop open innovation program, which launched in 2003. Ideally, open innovation will lead to a vaccine to resolve the pandemic. The term open innovation was coined in 2003 by Henry Chesbrough, who defines it as “the antithesis of vertical integration where you do everything yourself inside your own four walls.  Instead it’s a collaborative process that involves bringing in external knowledge for your innovation activities and equally, allowing unused ideas in your organization to go outside for others to use in their innovation activities.” In a recent HBR podcast, Chesbrough notes that 78 percent of North American and European companies engage in open innovation, but there are problems stemming from a gap between development and widespread distribution. Innovation has increased rapidly in the tech sector, for example, yet productivity and income levels have stagnated in a phenomenon Chesbrough calls the exponential paradox. To counteract this, Chesbrough recommends private and public sector solutions; for example, private companies need to invest in hiring and training employees, while the public sector needs to invest in infrastructure that enables wider dissemination of innovative technologies (such as widespread access to 5G internet).

In “Why Now is the Time for Open Innovation,” innovation scholars Linus Dahlander and Martin Wallin note how recent examples of collaboration in response to the pandemic remind us of open innovation’s great potential to expand value creation “through new partners with complementary skills or by unlocking the hidden potential in long-lasting relationships.” The authors offer guidelines to help companies embrace open innovation through the pandemic and beyond:

• Forget about the IP for the moment: While concerns about oversharing valuable intellectual property are valid, Dahlander and Wallin note that during the Covid-19 crisis “it could be wise to focus more on creating value than capturing value.” Savvy organizations will focus on collaborating on important items, which may help them ramp up their own operations or form collaborations that will later prove fruitful.
• Leverage two-sided motivation: While the initial rush of enthusiasm will carry the collaboration forward, over time it’s important to gain a deep understanding of each party’s motivation for participating. The authors’ research on open-source software notes a diverse range of motivations among developers, from the desire to build their resume, to strong feelings about the inherent transparency of code, to gaining access to complementary skills and assets. Put in the work ahead of time to understand motivating factors on all sides.
• Embrace new partners: Vetting and establishing new partnerships involves time and risk; however, the shared crisis has led senior leaders to assume that risk. For example, Ford’s President and CEO Jim Hackett “says he has empowered his engineers and designers to be ‘scrappy and creative’ when collaborating with GE Healthcare to find solutions to the crisis.” Additionally, with everyone facing the same crisis, there are many more partners looking to collaborate.
• Urgency leads transformation: In normal times, a company may crowdsource ideas, yet structural and organizational barriers often impede the execution process. The crisis has forced many companies to rethink their innovation infrastructure and rapidly remove barriers.

Ideally, organizations will embrace open innovation and other practices that unleash growth and as a result will be that much better prepared for the future.

What We’re Reading

Innovation in a crisis: why it is more critical than ever – McKinsey’s latest survey of over 200 organizations reveals that 90% feel the pandemic will fundamentally change the way they do business over the next 5 years. Yet many feel ill-equipped to face this challenge, with only “21% hav[ing] the expertise, resources, and commitment to pursue new growth successfully.” While organizations are understandably tightening belts and mitigating risks, McKinsey recommends the following actions:

• Adapting the core to shifting customer needs
• Identifying and quickly addressing new opportunity areas
• Reevaluating the innovation initiative portfolio and ensuring resources are allocated appropriately
• Building the foundation for post-crisis growth in order to remain competitive in the recovery period

Book Recommendation

In Unlocking the Customer Value Chain: How Decoupling Drives Customer Disruption, Harvard professor Thales Teixeira emphasizes the importance of thinking about disruption not from a technological standpoint, but from the standpoint of your customers’ desires to reduce the costs of acquiring goods and services. Based on eight years of research with tech companies and large incumbents, Teixeira emphasizes understanding the logic of customer needs and wants, specifically the customer value chain–the series of activities that customers perform in order to fulfill their needs and wants. Customer-centric business model innovation is a key theme in the book. A business model indicates how a company creates value (and for whom) and how it captures values (and from whom). Teixeira notes that from the customer standpoint, “a business model consists of the value a business creates for me, what it charges me in exchange for that value, and what value it erodes for me.” Companies need to map their own customer value chains to determine 1) Can we deliver more value in the value-creating activities without charging more 2) Can we afford to capture less in the value-charging activities, everything else being equal? 3) Can we reduce eroded customer value without diminishing what we’re offering or capturing? It is through decoupling this value chain that start-ups have eroded the value captured by large incumbents. Teixeira offers a roadmap that innovators can use to disrupt via decoupling:

Step 1: Identify a target segment and its customer value chain (CVC).
Step 2: Classify the CVC activities (according to whether they are value creating, eroding or charging).
Step 3: Identify weak links between CVC activities.
Step 4: Break the weak links.
Step 5: Predict how incumbents will respond.

To determine your company’s vulnerability to disruption, ask “how much time, money and effort must your customer expend to do business with your company? How much must she expend with a disruptor? Does the difference run in your favor or against you?” Teixeira also offers guidelines for companies to respond to and defend against disruption.

How are you developing customer-centric business models? Let us know—we would love to hear from you.

Browse Fisher College of Business faculty expert commentary about the pandemic and other relevant topics at Fisher Forefront.

​Psychological Safety Boosts Inclusion and Innovation

Organizational theorists have long touted the benefits of psychological safety. Harvard business professor Amy Edmondson first coined the term in 1999, and her research reveals how psychological safety helps organizations perform better. Google’s intensive study of teams listed it as the number one factor in its highest performing teams. It’s important to understand that psychological safety isn’t a sense of “coziness.” As Edmondson notes, “it describes a team climate characterized by interpersonal trust and mutual respect in which people feel comfortable being themselves.” She clarifies further: “what it’s about is candor…being direct, taking risks, being willing to say ‘I screwed that up’” and asking for help when needed. It’s particularly important for leaders to repeatedly model this behavior.

Why is this so important? Psychological safety enables your team members to feel valued and included, so that they can do their best work. It enables members of your team from historically excluded groups to feel comfortable raising issues they may be experiencing as members of a non-majority group, so that you can build diverse and inclusive teams that outperform homogeneous teams. It enables everyone to pitch new ideas that could lead to successful new products, services or business models and to voice concerns about initiatives that aren’t going well, so that adjustments can be made.

How can you build psychological safety? Edmondson offers three steps leaders need to do repeatedly: 1) set the stage; 2) invite engagement; and 3) respond productively. Setting the stage involves ensuring everyone is on board with the nature of the work you’re pursuing and the level of complexity and uncertainty. The more complexity and uncertainty, the more open feedback is needed. Leaders need to remind teams that their thoughts and feedback are integral to success. Managers can ask “what ideas do you have?” and “how can we test them quickly?” Inviting engagement involves continually asking “what are you experiencing with customers?” and “what help can I offer?” And most importantly, responding productively means avoiding anger or defensiveness if a project is off track or team members surface a problem or challenge an idea; instead, thank your team member for bringing the issue or idea forward. Then, discuss their needs and ideas for moving forward.

Innovation in the Pandemic

We continue to be impressed by ingenuity in response to the pandemic. A few recent examples:

• Fighting the Coronavirus with Innovative Tech –  Read more about germ destroying robots, robotic dogs that monitor social distancing, thermal sensors that detect fevers from 10 feet away, and hand-washing sensors.
• Cloud Kitchens Are Now Serving – Delivery services started out supplying a service to restaurants; now cloud kitchens are supplying a service to delivery firms.
• Retail Therapy: Zappos Offers to Listen to Pandemic Worries – Have anxiety related to coronavirus—or just want to chat? Zappos customer service reps will listen.

What We’re Reading (and Watching)

McKinsey’s recent webinar, “5 Priorities for Rapid Recovery during COVID-19,” notes that the e-commerce acceleration of the past few months exceeded that of the prior ten years. McKinsey suggest methods for emerging stronger include multi-speed management; in other words, focusing two-thirds of our time on navigating the now, while reserving the remainder of our capabilities to focus on planning for the recovery and long-term growth. Organizations are also encouraged to reimagine their businesses to emerge stronger, noting that companies are twice as likely to be selected if their digital experience is outstanding. Other recommended focus areas include virtual agility, fast and data-driven decision-making, removing structural inefficiencies and reallocating resources to where it matters most.

Book Recommendation

In this innovation classic, The Innovator’s Method: Bringing the Lean Start-Up Into Your Organization, strategy professors and consultants Nathan Furr and Jeff Dyer offer a four-step process for turning uncertainty into opportunity by employing design thinking, jobs-to-be-done, and lean start-up methodology:

1) Generate an insight

Use techniques (associating, questioning, observing, networking, and experimenting) to search broadly for insights about problems worth solving.

2) Deeply understand the customer problem

Discover the job-to-be-done; rather than starting with solutions, start by exploring the customer’s needs or problem—the functional, social and emotional job the customer is trying to accomplish—so that you can pursue a problem worth solving.

3) Rapidly prototype toward a great solution

Instead of developing full-scale products, leverage theoretical and virtual prototypes of multiple solution dimensions. Then iterate on each solution to develop a minimum viable prototype and eventually a minimum awesome product.

4) Align the business model with the solution to scale it

Once you’ve nailed the solution, you’re ready to validate other components of the business model, including the pricing strategy, the customer acquisition strategy, and the cost structure strategy.

Keep in mind that each step is critical and requires repeated experimentation to test major assumptions in a “hypothesis, test, learn” loop.

How does this compare with your own innovation process? Let us know—we would love to hear from you.

Browse Fisher College of Business faculty expert commentary about the pandemic and other relevant topics at Fisher Forefront.

​Identifying Opportunity in Uncertain Times

We continued our speaker series virtually on May 20 with a discussion on “Identifying Opportunity in Uncertain Times,” featuring Jeff Curran, Founder of Innovation Outcomes, LLC and Innovation Leader at National Church Residences. While individuals and organizations grapple with this highly uncertain environment, innovation experts note that keeping an eye on changing business models and habits is a key area of focus right now. A recent article by innovation expert, Scott Anthony, noted that “new habit formation is often an early warning sign of disruptive change.” Clearly, new habits are being formed as people work from home, are cooking more, practicing social distancing, and engaging in new ways of working and living. Jeff Curran noted that the pandemic created an immediate change that brought on instant disruption for many businesses. Think of the restaurants who had not yet adopted online ordering or a delivery model – they either had to innovate quickly to online services, or face the potential end of their business. The pandemic is forcing innovation on a daily basis, and 72% of respondents (n=104) to our poll in the session noted that it was very important for companies to continue to invest in innovation and growth opportunities.
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Join Us for Our Next Virtual Speaker Series

Managing Innovation in the New Normal
Thursday, June 4, 1:00-2:00pm
Featuring Micah Fening and Jenny Young, Sr. Consultants, Nationwide Financial Innovation Team

Organizations are grappling with unprecedented uncertainty while attempting to maintain forward momentum on initiatives that are crucial to future growth. How can we ensure that we are working on the most important projects, while balancing immediate customer and organizational needs? In this interactive discussion, innovation experts Micah Fening and Jenny Young will discuss how to prioritize near term, medium term, and long term initiatives and will also share tips for continuing to develop your organization’s innovation proficiency through virtual workshops and events.
 

What We’re Reading

Discovery-Driven Digital Transformation, by strategy expert Rita McGrath and Techtonic.io CEO Ryan McManus outlines a way for incumbent businesses to digitally transform their companies while minimizing disruption to the existing business. Based on the discovery-driven planning (DDP) methodology introduced by McGrath and colleague Ian McMillan in the 1990s that is now a foundation of lean start-up practices, the approach outlines five steps established companies can take to test out digital strategies and “learn their way toward a new business model.” As McGrath notes, “a discovery-driven approach gets leaders past the common barriers to digital transformation. By starting small, spending a little on an ongoing portfolio of experiments, and learning a lot, you can win early supporters and early adopters. By then moving quickly and demonstrating clear impact on financial performance indicators, you can build a case for and learn your way into a digital strategy.”

How Innovation is Driving Productivity During and Beyond the COVID-19 Pandemic – “Every single one of the technologies upon which the world now depends on to function…is the result of years - and often decades - of vision, leadership, expertise, perseverance, big bets, a healthy flow of investment in R&D, dependable intellectual property protections, and affordable technology licensing. If the value of the massive investments in technology and innovation that we saw over the last ten to twenty years wasn’t already abundantly clear before this crisis, it should be now, particularly in several areas that have played a critical role in helping us adapt to the radical changes that were thrust upon us so suddenly: Network connectivity, the digital devices that we interface with, and the software that powers them.” The author goes on to note that continued investment in innovation is crucial, particularly in fundamental R&D and connectivity. 

Browse Fisher College of Business faculty expert commentary about the pandemic and other relevant topics at Fisher Forefront.

Is COVID-19 Our Next Sputnik Moment?

Our team, like all of you, has been grappling with the immense changes wrought by the pandemic. A recent question we discussed was whether the pandemic is another Sputnik moment, the 1957 Soviet launch of the first human-made object to orbit the Earth, which galvanized the space race between the U.S. and the Soviet Union. The ensuing panic that the U.S. was woefully behind in technological terms spurred significant government investment in science and education. In response, the Defense Advanced Research Projects Agency (DARPA) was created in February 1958 to build and maintain the technological superiority of the United States with respect to military objectives. DARPA is credited with laying the ground work for many technologies that have driven decades of economic growth, from the foundation for the internet, Wi-Fi, supercomputing, GPS, robotics, AI, voice recognition and more.

While COVID-19 is a biological threat rather than a military threat, it is an urgent reminder of how public health and economic health are tightly coupled. Providing military protection to our citizens is a public good. Likewise, providing for the public health, particularly in the aftermath of the pandemic, will highlight the importance of providing for overall health as a public good, driving public and private investment. As a recent Forbes article notes, COVID-19 reminds us why innovation is often a public good. We are seeing fast movement along these lines;a public-private partnership was formed in mid-March, leveraging AI to review and uncover insights from the avalanche of scientific research related to the pandemic. Such innovations will advance our progress toward a vaccine as well as accelerate the applicability of AI to other use cases in the long term. Our hope is that the many innovations arising from this pandemic will foster a new era of investment in innovation for the public good, driving future economic growth and providing a stronger foundation from which to combat complex challenges such as global health crises and climate change.

Necessity Drives Innovation

We’re seeing many examples of real-time innovation in response to the pandemic, from an agile bakery owner who adeptly transitioned to a free delivery site for local eateries, to 3D printing of medical supplies. Here are just a few we’d like to share. Let us know how your own organization is innovating in real time.

Local bakery owner rolls out free delivery site for Seattle businessesXRHealth to provide medical center’s coronavirus patients in quarantine with virtual reality telehealth servicesFDA approves Ohio State COVID-19 test kit innovations: sterile transport solution and 3D printed swabsHow hospitals are using AI to battle COVID-19Why a coronavirus vaccine takes over a year to produce - and why that is incredibly fast

What We’re Reading

Don’t Let Uncertainty Paralyze You – Innovation and strategy expert Nathan Furr offers tips for managing uncertainty, based on his research with people who excel in the face of uncertainty (innovators, entrepreneurs, CEOs, Nobel Prize winners, etc.) He encourages us to develop our “uncertainty capability” with three habits: 1) Open our eyes to all options, present and future; avoid becoming so focused on the immediate situation that we overlook the broader context and make rash decisions; 2) Think in terms of probabilities; avoid either/or thinking and consider the range of outcomes, and the probability of each; and 3) Remember that possibilities always exist, even in the face of tragedy. Here the author invokes a powerful quote from Victor Frankl. “Everything can be taken [from a person] but one thing: the last of human freedoms—to choose one’s attitude in a given set of circumstances, to choose one’s own way.”

Book Recommendation

Seeing Around Corners, by acclaimed strategy expert Rita McGrath, offers tips and frameworks for identifying major shifts in the business landscape—inflection points—before they happen. Clearly, the pandemic is a momentous inflection point, where major assumptions have been immediately called into question. She provides 8 practices leaders across an organization can employ to avoid being blindsided by inflection points.

1. Ensure direct connection between the people at the edges of your company and the people making strategy.
2. Go out of your way to include diverse perspectives in thinking about implications for the future.
3. Use deliberate decision-making processes for consequential and irreversible decisions. Use small, agile, empowered teams for reversible experimental decisions.
4. Foster little bets that are rich in learning, ideally distributed across the organization.
5. Pursue contact with the environment – “get out of the building.”
6. Make sure your people are incentivized to hear about the reality, not the reverse.
7. Realize when your people are in denial.
8. Expose yourself and your organization to where the future is unfolding today.

Which of these 8 practices are you doing well? Which do you need assistance with? Let us know if you would like to discuss these tips or other innovation practices—we would love to hear from you

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Maintaining a Growth Mindset in a Different World

Our lives have shifted beyond recognition within just a few weeks. Businesses and individuals are rapidly adapting, and our personal and professional domains will be forever changed as a result of the COVID-19 pandemic. While we are all intensely focused on managing our families, work and households through this crisis, we may also be asking big questions. How can we make decisions when faced with this much uncertainty? What does the future hold for us personally and professionally? In times like these, adopting a growth mindset is of even greater importance.

Many of us are familiar with the concept of growth vs. fixed mindset based on the work of psychologist Carol Dweck. She notes that individuals who believe their talents can be developed have a growth mindset, and that “they tend to achieve more than those with a fixed mindset (those who believe their talents are innate gifts)” because they are more open to learning and less worried about appearing to be smart. In “What Having a Growth Mindset Actually Means,” Dweck states that “organizations that embody a growth mindset encourage appropriate risk-taking, knowing that some risks won’t work out. They reward employees for important and useful lessons learned, even if a project does not meet its original goals. They support collaboration across organizational boundaries rather than competition among employees or units.” Exhibiting a growth mindset involves “sharing information, collaborating, innovating, seeking feedback, or admitting errors.” When faced with uncertainty, sharing information, collaborating, seeking feedback and admitting mistakes will help us develop new solutions and rapidly adapt to changing circumstances, so that we can help our organizations achieve their goals.

It can be challenging to remain in a growth mindset mode, particularly when we are stressed or face setbacks or criticism. According to Dweck, “Everyone is actually a mixture of fixed and growth mindsets, and that mixture continually evolves with experience.” We also have our own “fixed-mindset triggers.” The good news is we can learn to recognize triggers that make us feel threatened or defensive, and learn to remain in growth-mindset mode, where we can learn as well as develop and test new solutions. As we adapt and build resilience in response to the pandemic, may we all remind ourselves to employ a growth mindset as we learn to live and work differently in these challenging times.

OnRamp Continues Virtually Via Zoom

We are pleased to report that we are continuing OnRamp, our student innovation program, through Zoom. Students will work virtually in teams to assist our current OnRamp sponsoring companies, Honda and Nationwide, with their innovation challenges. After Ohio State’s spring break was extended and classes moved online, Christian Lampasso, student program manager, quickly revised the OnRamp schedule and format to be delivered via Zoom. Currently, the student teams have wrapped up their customer validation and are now proceeding to mine data insights and unmet customer needs. The virtual whiteboard Miro has come in handy as each of the student teams collaborate to create post-it note categorization, customer personas, and journey maps. Moving forward, the teams will reveal their findings to their respective company sponsors, with a goal of presenting insights and unmet customer needs that may be sources of future value.

Learn more about OnRamp

Contact Christian Lampasso for more information, Lampasso.1@osu.edu.
 

What We’re Reading

As we settle in to this new normal, we’ve been focused on how companies are managing these huge changes. Some compelling reading includes:

McKinsey: “Responding to Coronavirus: The Minimum Viable Nerve Center” offers a framework (discover, decide, design, deliver) for understanding common crisis management failures and a graphic depiction of how an organization might design an integrated COVID-19 nerve center. McKinsey also offers frequent analysis of COVID-19’s implications for business.

Harvard Business Review: A throwback to 2010, Roaring out of a Recession reveals results of a study of how 4,700 companies responded to prior recessions. The authors note four types of organizational responses to a slowdown: prevention, promotion, pragmatic and progressive. The study “suggests that enterprises that cut costs by focusing on operating efficiency even as they spend more than rivals on marketing, R&D, and assets are likely to be post-recession winners.” Companies that only drastically cut costs didn’t flourish after the recession ended. During recessions, progressive companies invest in both existing and new businesses, and “stay closely connected to customer needs—a powerful filter through which to make investment decisions.”

Book Recommendation

Dual Transformation: How to Reposition Today’s Business While Creating the Future, by Scott D. Anthony, Clark Gilbert, and Mark W. Johnson. Check out this brief 2 minute video for an overview of how to maintain your existing business while creating future growth engines.