[[[ 9 -- The Product Innovation Players ]]]
The new technologies are highly knowledge dependent and not so capital dependent. This is what makes them different from the older technologies. Based on my interviews, I have found that product innovation--the heart of the new technologies--is a cycle involving four kinds of people: inventors, salesmen, technical managers, and general managers. Here is what I've discovered about these four kinds of people.
Inventors
The inventors are the people who do the actual designing of new products. They turn ideas into circuits, boxes, and programs. They are very industrious people, and usually quite patient, but they tend to be very passive about promoting their ideas and doing their designs. Average inventors like to have ideas presented to them. They have their own ideas, but they realize that their own ideas are less likely to get promoted than those brought to them so they tend to bide their time about presenting them. When an idea is presented to them, they then turn it into boxes, chips, and wire. The above-average inventor still doesn't like to promote much, but recognizes its importance, and often turns to salesmen to promote the ideas they have.
Salesmen
The salesmen do the scouting to find out where a product can be used. They present and sell products they represent; they are usually the first to see and hear how their products compare to other competing products; they learn first-hand what the customer wants. The average salesman tries to explain how his product will fit customers' needs. The above-average salesman takes on the function of passing back customer needs to the company inventors and marketers in a way they can respond to with improved product. This means pointing out specific features that need addressing.
Technical Managers
At their best, technical managers are the backbone of the innovation process. They are the ones who see marketable needs, and marshal the inventors and salesmen to properly meet them. They are the link between the scouting salesmen and the waiting inventors. But they are also in a high risk position because they are only as good as their "vision" of a product, and that vision depends heavily on their being able to understand how available technology can be put together to suit customer needs. By the time their vision is fulfilled, or the technology they are intimate with becomes obsolete, they need to have retrained themselves or moved on to general managing.
In spite of this lofty goal of understanding the product and how it fits into the market, the average technical manager uses very little market vision. Like the general manager, he looks for his answers in surveys and report numbers. Even Product Managers fall prey to number myopia--they become deeply immeshed in scheduling, but pay little attention to what the market acceptance will be of what they are scheduling. The above-average technical manager understands what the product is being used for, and is capable of distinguishing between important and superfluous features, as well as looking at the numbers. The outstanding technical manager can see beyond the specifics of what various customers are asking for, and make the result a limited-feature but highly useful product.
General Managers
The general managers have the toughest and the easiest time. They are no longer dealing directly with technical issues: they deal with the universal issues--money and people. They are the link between ideas and money. Their role is to make the inventors and technical managers translate their ideas into financially understandable terms. The easy part is that all ideas that reach them must be converted into one common language: money. The tough part is that a lot of information is lost in that conversion--it is difficult to tell a technically feasible or marketable idea from an infeasible one by the time they are both proforma financial statements. So, general managers have to rely heavily on their knowledge of who is presenting the idea: they manipulate money and people, not technology or things. The average general manager looks at numbers and tries to motivate people. The above-average manager either understands the technology and market well enough to get involved in the goal-setting process, or is exceptionally good at picking and properly motivating good technical managers to use their vision to the fullest.
I remember my first encounter with the Innovation Pool.
I was working in Lexington, Kentucky on a summer work-study job during my college years. I was sitting down for lunch beside the vending machines in the break room talking with one of my fellow employees. After talking for a while about life and business in general, he decided to confide in me that he had a "hot idea" that was going to make him millions. I listened patiently while he told me bits and pieces of his scheme. Finally, I asked him who else he was planning to tell about this.
"No one." he replied.
"Why not?" I asked naively. What he had said sounded like a good idea.
He looked around carefully, then said "If I tell someone, they'll steal it from me!"
As far as I know, that was the end of his good idea. And this is the end of 99.9% of most good ideas. They end up forgotten -- cast into oblivion because they aren't treated right.
Good ideas come from people. They all start as notions in the mind of one person. But, a notion is worthless. It's like an emotion, something a person feels warm and fuzzy about, but can hardly describe.
Many people have notions; many can have the same notion at the same time. Notions become useful when refined into something concrete and communicatable. For example, here is a notion:
There ought to be a better way to get gas mixed into air in a engine than by using a carburetor.
But the notion by itself is useless, except as an inspiration for hours of work by an inventor or team of inventors to perfect one of many different techniques that may solve a problem, such as the way fuel injection schemes solve carburetor limitations.
But this point seems hard for some people to understand. It's hard for some people to understand that a notion is not the same
[[[ 10 -- The innovation pool ]]]
as a perfected product. When a person doesn't understand, they turn bitter and feel those who succeed in turning one of their notions into a useful product or concept "stole their idea". They have trouble seeing a couple of major points:
First, if the other person hadn't, then it is likely that still some other person would have. An idea who's time has come will be seen by many inventors at the same time.
Second, if they had done it themselves, the outcome would likely have been quite differently. And,
Third, if they don't share their ideas, who's going to help them exploit them? The other person succeeded in "stealing" their idea because he or she was willing to work with it, refine it, and expose it to other people so they too could understand it, modify it, finance it, and get excited about it. Very few, if any, ideas can stand on their own. They need to be shared if they are to do any good at all.
So, assuming an inventive person gets an idea, and shares it, what happens then?
Good ideas compete for resources. It takes money and talent to turn good ideas into useful products or services. Now, which ideas out of the many available get resourced? Imagine yourself at a horse-race. You have a 'sawback' to bet, and it will take the pot. You can bet it on any horse you like: will you bet on Ole Tenbrooks, who has won his last five races? Or Molly, who hasn't ever won and likes to run using just three legs? Unless someone is offering odds, there is little question of which way to bet.
Managers, (and just folks too) feel the same way about betting on ideas: they like to bet consistent winners. So, the more winning an idea looks, the better the price it will command. Notions have no track record: they are not winner ideas. The winningest ideas are those that are already fully developed and making money. That's why companies like to buy other companies and why doctors and lawyers buy real estate--they know what they are getting (at least, they think so).
The next most "sure things" are imitations of winning companies. For that reason some well-financed companies with new innovative ideas will sometimes start a whole new company just to prove a concept. Corning Glass, for instance, started Owens Corning FiberGlass just to prove to other businessmen that there was a market for products made from fiberglass. Once they had proved it, they spun off the company and let it develop on it's own in competition with the many other fiberglass fabricators they had convinced to enter the market.
The growing profitable company represents the ultimate in proven ideas. To get to that state, most ideas have to start with humbler beginnings. When they are beginning they present more risk, so the investors must be offered a better payback to become interested (they will likely be different investors too). This is why our society has developed institutions like investors, venture capitalists and the Small Business Administration. They help ideas (actually, they help the idea's presenters) prove themselves.
But, regardless of where it starts, the idea must be shared, and must be handed off from one person to another, from one organization to another if it is to grow mighty and become a significant contribution to our society.
Inventors must recognize that their ideas are part of the "Talent Show" process. This means that the more complete they look, and the more proven profitable, the easier their acceptance will be. This means inventors must be sensitive to the marketing of the product. If they are designing products for others, then they need to be especially receptive what the product will be used for, and have a feel for what they can contribute that isn't necessarily easy, but what will make the product easier to sell. They must beware the "Creeping Feature Creature"--where easily engineered ideas are added to a product simply because they are easily engineered. The problems caused are two-fold. First, these ideas do take some additional time to implement, so they will delay product introduction. Second, they are distracting to the salesforce. If too many bells and whistles are added, they and the customers will loose sight of the main purpose of the product.
Finally, inventors with very original ideas should recognize that these ideas are unlikely to be easily accepted in a big established company. The company has its goals and plans already decided upon. If new ideas don't fit into those plans and goals, then the inventor needs to look elsewhere. In other words, the inventor should moonlight.
And both the company and the inventor should understand why this is okay. It's okay for the inventor because he or she finds a useful outlet for ideas that the company can't use. And it's okay for the company because it can stick to it's goals without having to accomidate some of the wild and crazy ideas that are part of any inventing process, yet still has the services of the inventor.
The first part of an inventor's career typically consists of learning how to present an idea to an organization. This can best be done in larger organizations that are working on "polishing engineering"--making rough ideas suitable for public consumption. Ultimately, the inventor who wants to keep inventing new and different things will probably want to be part of a small organization to avoid the communcations problems mentioned in Chapter Two. If he or she prefers managing and polishing up the ideas of other inventors to make them presentable to end-users, then they should stay with bigger organizations.
Salesmen need to be very open to customer ideas. They must listen as well as present ideas. They must understand why a customer wants something; what they want to use it with; and how to present these ideas to the marketing and technical managers in a way that makes the requests sound reasonable.
Salesmen have the widest contacts in the organization, and they spend the most time communicating with others. They are the most outwardly directed. This need to spend so much time communicating and meeting is why they often function as their own business, or as a mini-business in the organization. The time they spend dealing with organization internals is considered a necessary evil. For them, small is definately better.
Technical Managers need to be very empathic with customers. If at all possible, they should use their products. They need to understand why end-users like certain features. Technical managers spend a lot of time worrying about product schedules. But the delays that occur are most often caused by changes to the product specs. Many of the changes are caused by fuzzy product understanding. If the TM can understand the product better as it is being designed, many of the subsequent changes can be avoided.
What does a technical manager do who doesn't understand the product? Probably the best thing to do is become a General Manager. But, failing that, become like a salesman. Listen, empathise (even at the risk of sounding the fool), and spend time with the customers to understand how they are using the product.
Technical Managers muster resources. They must be part of large groups to do so. If they are recommending, but not implementing, then they can be consultants, and not part of large groups.
[[[ 11 -- Know your players ]]]
General Managers need to know what to expect from their people, and be able to tell them what is expected of them. Their primary job is to make sure people know what is expected of them, and that they have the resources to accomplish it. The General Manager is a trainer. He helps people distinguish right from wrong in terms of company goals.
General Managers maintain contacts almost as wide as salesmen. They too are very meeting-oriented, and this leads to an interesting conflict. By the nature of their job functions, General Managers should be parts of small groups--so they can spend more time communicating. But they are also resource musterers--which means they must head up large groups. This dichotomy is why General Managers are so hard to peg (both time-wise and function-wise), and why it is such a difficult position for the average person to fill satisfactorily.