The Experience Strategy Podcast: The 6 Reasons Innovation Fails With Dwayne King

March 29, 2022

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In today’s episode, we are joined by Dwayne King who works at the intersection of experience transformation, human-centered innovation, UX design & research. His unique view of organizations has allowed him to diagnose the real reasons 90% of innovation labs fail. Tune in to learn how to lead the other 10% and set your innovators up for success. 

Voiceover: [00:00:00] Welcome to the experience strategy podcast, where we talk to customers and experts about how to create products and services that feel like time well spent. And now here are your hosts experienced nerds, Dave Norton and Aransas. Savis

Aransas: welcome to the experience strategy podcast. I'm Miranda . And today we are joined by Duane king.

So Dwayne built his career really at the intersection of experienced transformation, human centered innovation, UX, design, and research. That is a pretty packed Venn diagram there. But what it's allowed him to do is to leverage these truly complimentary lenses to generate meaningful change within organizations.

That helps them then better connect with their audience to create positive business outcomes. So Dwayne works across [00:01:00] a wide range of industries, solves a myriad of problems as a result, but because of his. Expansive view of things. He is an expert learner and has quickly transformed from a questioning student to a confident strategist and leader, regardless of the problem space or industry.

So we thought he was the perfect person to talk to about the six reasons that innovation fails. And it does most of the time. Yeah, right. So we all understand that innovation is essential to business growth, that without innovation we become stagnant, we become stuck and our market share continues to shrink as opposed to doing what I imagine.

We all hope it will, which is grow. So Dwayne, we're going to put you in the hot seat today and ask you to tell. Really truly based on your research, [00:02:00] why this happened so that everyone listening in can leverage your many years of experience and insights to hopefully grow what matters to them. Thank you for being here to wine.

Yeah, it's

Dwayne: great to be here. Thanks.

Aransas: So kick us off. How have you come to these conclusions? What's what's behind your thinking here?

Dwayne: Yeah, so, uh, I worked in consulting for years, uh, mostly working in, um, design thinking innovation type projects. Uh, so I had a lot of observations through that. Then I went over to Salesforce and was working there and, um, was actually working on their, uh, Professional services side.

So I'm still going out to customers, helping them set up innovation labs. And one of the things that I started thinking about and being concerned about is, you know, looking at, I think a cap Gemini did some research and found out it's like almost 90% of innovation labs fail. [00:03:00] And so, you know, not wanting to, you know, basically sell snake oil.

I wanted to go in and figure out, you know, what are the MCAT? I mean, It's all well and good to say, okay. They almost all fail, but I wanted to really understand the mechanics of what was happening there and why they were failing so that I could try, you know, not to, um, doom these companies to fail innovation labs.

And so it was a combination of, you know, looking back at my experience over consulting as well as then I, you know, called in a few cards, uh, you know, at the heart of my heart, I'm a researcher. And so. Called up some friends that were in innovation spanning from pharmaceuticals, auto manufacturing, high-tech, um, sporting goods.

So really a broad swath of industries and talk to them in there that were running innovation teams and understood from them. You know, when did things succeed and when did they fail and why? And look for the patterns coupled with what I was seeing, compared to what they were speaking about. And I narrowed it down to, I think there are [00:04:00] six.

Elements that go on within an organization that caused their innovation efforts to fail.

Aransas: All right. And as someone who has sat in an innovation lab that perhaps unpaper appeared to fail, but I would argue in practice was wildly successful. I am particularly interested to hear what you found. So start us off.

What, what's the first one here?

Dwayne: Yeah, the first one is. You know, seem straightforward, but, uh, it has some nuance to it. It's really just pursuing the wrong idea, thinking that you have a good idea. It's not, and that, you know, that comes from. Uh, one thing that I often tell people in innovation is just because you find a problem to solve doesn't mean it's your problem to solve.

So, you know, is your company geared up to be able to solve for that problem? Do you have the skills to solve for it? Do you know how to actually take it to market and support it once it's in market? You know, then I also think about like, [00:05:00] you know, is your leadership going to see how this Alliance and their.

Their objectives and what they're doing, are they going to see it as an aside in a, uh, a waste of time? And one of my favorite examples of somebody that switched it before, um, is the other piece is thinking about like, are you the company that can take this to market and people believe and understand why you're bringing it to market and that you're, you're trustworthy in that space.

Uh, and when one of the examples that I really like of that is, um, The smart car that Mercedes is released. The little small cars was originally my understanding of project that swatch. And we've got a ways down the path they started thinking is a company that makes an expensive plastic watches going to be trusted.

The auto manufacturing space and they came up with the answer. No, but they still thought they were onto a good idea. So they ended up basically selling the VIP and the idea to a car company that they [00:06:00] felt could take it to market. That's a great

Dave: example of one that example, you

Aransas: gave two big examples there too, about why it might not be the right idea, uh, is, and one was just because there's a problem to solve.

Doesn't mean it's. To solve because of this credibility issue. But then I also heard you say, is your leadership focused on this now? Is that, is that sort of just an extension of the same thing or is it a different factor that one should consider in deciding whether or not it's the right idea to pursue?

Dwayne: Yeah, I think there's a difference there. Uh, one company I was working with was like, if you get to get our laptops took two weeks after you started to get like, things turned on. Took, you know, like to get extra software, it took months of work to do. And so, like we think about that them in a space they have as a large fortune 1000 company that, um, carried a lot of credibility in a certain space.

But if [00:07:00] the idea, if they didn't have an unfair advantage and. Could they were the only ones that could actually address a problem. I started, I was going to beat them to the punch right away. Even if they start up on something they're going to miss out on the opportunity. Cause they're just, they're just too slow.

So that'd be an example of, you know, it's not necessarily a. You know whether or not the market believes it, but are you capable of, um, bringing something to market in a timely manner? And if not, what is, you know, what is something that you could do? So that'd be an example of how it's

Aransas: a little bit. And are you credible?

Dwayne: Yeah. Yeah. Capable credible too. Yeah. For good. Good, good.

Dave: Can I ask you a question related to this? Dwayne, do you feel like the consumer continues to have expectations companies, brands to stay within their category? I'm thinking about like Amazon, for example, that doesn't seem to have a category anymore.

They're just there, they're all over the place they've been [00:08:00] successful. Although they've had a number of failures along the way as well, but what are you seeing in terms of companies needing to either stay in their category or step away from their category?

Dwayne: Yeah, I think that expanding outside of your category.

If it can, if someone can rationalize it. Yeah. It's definitely something you do on that, you know, an Amazon, I think now, you know, early on like their expansion was okay. We went from books to electronics, to clothing, to whatever, which was a very, like, just looking tangentially, what, what else they could sell.

And then I think, yeah, and then I think the, the big shift for them came when. You know, with the AWS, when they said, oh, we have built a system to deliver this. Other people might want the system, which I think then, you know, that, that one people could rationalize and make sense of. And I think then that also created a sense of like, almost like there's, there's nothing making out do.

So I think [00:09:00] they've kind of earned a right to no matter what market they want to get into, most people would probably say, yeah, probably makes sense. You know, Amazon huge. And they do a lot of different stuff. If you look at. You know, if you look at, um, you know, we brought up a Mercedes before, if Mercedes started making baked goods, I think people would have a really hard time saying like, well, wait a minute, how, how does this make any sense for Mercedes to get into food production?

But they could go into things that are kind of more tangential and eventually build towards that if they wanted.

Aransas: Yeah, it's interesting too, because while swatch couldn't make cars, I think Mercedes could make, watch.

Dwayne: Exactly. Yeah.

Dave: Yeah. I think that's true. '

Aransas: cause we're like, oh, they make good technology and they make luxury items.

And so it's a nice extension and it feels very logical, vice versa. It's going from small to large and, and that's what I'm really hearing in your answer. There is that. Amazon made and small, incremental logical steps until their mission could be. [00:10:00] We're just going to do everything and put it all under this one subscription piece.

And you'll love us for it because they grew so far that that became a logical extension.

Dave: Hey, Francis, you just spoiled my, my wife's birthday gift, um, because I always wanted to get her a Mercedes. And she doesn't know this yet, so we got to keep it secret. She doesn't actually listen to the podcast, so we're good.

But, but I got her an electric Mercedes bike, uh, an electric Mercedes bike. Yeah. And I was like, it's a mercy.

Aransas: Yeah. It's pretty cool.

Dave: So, um, I'm

Aransas: hoping that my husband does listen to this show. So, you know, I'm going to plug in there too.

Dwayne: I, you know, that's, uh, you know, it's interesting that you bring that up because, you know, there's.

Hayton so I think some [00:11:00] fuel, you've got to think about timing of innovation. I think there is a time that Mercedes could have made bicycles and people would've thought that was insane, but there's such a heightened focus lately on multimodal transportation that now it makes a whole lot of sense that they would go into that space.

Sure.

Aransas: That's such a good point. So would you put that in your top set? Is it the right time or is that the, is that part of pursuing the wrong idea?

Dwayne: Yeah, you know, I, uh, my, a woman that I worked with for awhile that, uh, Uh, managing. She is at Medtronic now, I believe. Um, you know, we just talking about the DVF, the DVS scorecard, uh, desirability viability, feasibility, um, where you figure out if, you know, if something is worth bringing to market and she, she was like, oh, but you're forgetting adaptability where I think this is like, so we, we changed it to a DVF scorecard.

Um, and adaptability really is kind of a lot of what we're talking about. The one is that the right [00:12:00] time, you know, The right problem for you to solve or somebody else to solve. So I think it's that kind of that adaptability question.

Aransas: Totally agree. And that's a really useful tool to, to, to introduce into this conversation as a takeaway for the listeners too.

So thank you for that. So what would you say is, is that your second key lesson on why. And I'm still, I'm floored by this number you gave. It's kind of heartbreaking, isn't it? 90% of innovation labs fail. So what's reason number two.

Dwayne: Well, I can give you even more heartbreaking one. I think. Gartner did some research with executives.

And I think 94% of executives are unhappy with their innovation results. Not saying that they failed, but they just weren't getting the return that they hoped. And so, I mean, it's yeah, it's really, we'll just

Aransas: blame that on their outside expectations of their impediment. It's got an heartbreaking.

Dwayne: Yeah.

Yeah. There's that? I think there's [00:13:00] also too, you know, I seen a lot of times where. I don't know that executives fully understand what's going on within innovation labs and aren't actually seeing how much value they're producing. And I think that's one of the things that it's not this isn't in my list, but I think, you know, as innovators, people need to think about how are we going to communicate the value because there's a lot that comes out of there.

That's not as tangible. We made this product and we sold it for X amount of dollars. There's a whole lot of other stuff that happened. So I think, you know, some of that is, they're not actually seeing that, like actually recognizing the value that's coming out of a innovation lab.

Aransas: Sure. Yeah. Tell that story.

Personal experience here at WeightWatchers. We, uh, we had huge campaigns announcing we were going beyond the scale and we said, we are coming out in front and saying that weight loss is not the be all end, [00:14:00] all it is about wellness and it is about an overall sense of wellbeing. And I think consumers kind of looked at us like we had two heads, but you're called weight Watchers.

And then. Joined the company by majority share and said, no, really? And this is what it looks like. And had we not had that campaign, that, that frankly, I mean, this is all well reported. So I don't feel like I'm speaking out of turn failed to drive the results that, that we had hoped. Ultimately what it did.

Was it late at groundwork for a belief in the story that Oprah was then. In the right position and at the right time to tell, and to really help people believe in as a foundational, fundamental shift in the brand. Right. So it didn't drive a bunch of recruitment year one, but it was essential foundation for, for driving the growth of business beyond.

Dwayne: Yeah. It's interesting. [00:15:00]

Aransas: Yeah. All right. So take us down the road. What's next?

Dwayne: Yeah. Number two is. Companies making these really big high-risk bets with very little visibility into the probable outcomes. And I think, uh, Dave knows this I'm big on design thinking. Um, and I think this really comes down to that, you know, one piece of, well, two, two pieces, I think that are really important in design thinking, are the empathy really understanding the audience you're designing for?

Uh, and I see a lack of that a lot of times. So, you know, not really. Doing the work to know whether or not this thing you're making is going to have resonance. Uh, and then also the iteration. And I think that's iteration some important period, but in innovation it's a critical. 'cause you can't, you know, if you come up with 50 ideas, maybe one of those is going to be a good idea.

And the other 49 are going to be a bad idea, but you don't know until you get a little ways down the road. And so [00:16:00] making sure that, you know, you're going through an iterative process where you're incrementally stepping through. And so one thing I hear executives say a lot during annual planning is like what are going to be our big bets for the year.

And I keep trying to tell them. Making big bets and make smart bets like let's rather than picking three things that are going to be our big bets for the year. What's pick those 50 things that we're going to invest a little in and know that we're going to throw most of them away and go after the big ones or go after the ones that prove that they're going to be a big one versus once a we hope will be a big one.

Dave: That's that whole big bet thing is kind of an old Michael Porter, um, uh, Jack Welch kinda mindset. Um, that's continues to this day. I think, you know, it's, it's that, that idea that strategy is, is knowing your strengths, your weaknesses, your opportunities, your threats, and then you, um, you know, you find the big, the really big opportunity area and, and you just go full force against it.

[00:17:00] I totally agree with you on that particular piece. I sometimes worry about the term empathy because, because I think a lot of companies, they don't understand what we as design thinkers are, are trying to say that you really understand the problem. And you understand that, that the customer. There's enough customers that have this same type of problem that they're trying to solve for.

Um, and you know, how they're trying to solve for that problem. And sometimes I think they think we're just going to speak to them nicely and make them feel like they're our friends. Um, and that's not what we mean at all by by it. So sometimes I worry about that term. Do you ever worry

Dwayne: about that? Oh, for sure.

It was. Uh, I'll, I'll leave the company nameless, but, um, there is a company that is working with, I've developed a [00:18:00] brand trust framework, uh, that is kind of like these elements that you need in order for people to trust you and the number one thing. And then it is empathy. And we're working with this company, uh, with their ease of doing business team and.

They were a small team that was tasked with making it easier to do business with this company as a very, very large company. Um, so it's one of those, you know, a million problems to solve, but what's the problem we should go after. So we did a journey mapping research project with them to understand where the pain was most acute for companies or for their customers.

And what we found was the biggest complaint. Customers had about this company was their lack of empathy. Now, granted, they never said, I wish X, Y, Z Corp was more empathetic, but you know, they're talking about, they're so hard to do business with, and they don't even recognize how hard it is to do business with them, or, you know, they see things like that.

And, you know, [00:19:00] We're trying to explain to them, you know, like really understanding what, you know, taking empathetic stance and really understanding the problems that your customers have would help you create better solutions. And the project sponsors look at me and he's like, there is no way I'm going to go to my boss and tell him we need to have more empathy, but it was, it was funny cause, uh, uh, About two weeks later, there was a, um, anchor Forbes article about like what our CEO is reading.

And his CEO was reading a book on empathy and had written about how, why he was doing that. So I forwarded that to him like, oh, maybe you should go back and say we should have more empathy. So yeah. It's definitely, I think

Aransas: it's why that's a problem. So

Dwayne: yeah, you know, I have a, uh, former employee. That has a theory about that.

And it's that empathetic sounds really close to pathetic and like, sort of, it's like maybe just like [00:20:00] a, uh, a resonance in there that like, oh, it sounds too close to that word. Like, uh, you know, um, not, not a conscious, uh, thinking about it, but, but yeah, it's definitely a, uh, a word that is misunderstood and maligned and yeah, it really is.

There's nothing soft about it. It's really just understand really, truly understanding what the needs of your audience are so that you can, you can sell.

Aransas: We had a behavioral scientist on a show recently. And that was really the crux of all of her work was I don't know how you can solve a problem with that understanding who the person is and what, what they experience is a part of experiencing that problem.

And so, yeah, I think I, my, my gut is that the reason there's so much resistance to empathy is because it feels soft and mushy and frankly not. To add to this, but too feminine. [00:21:00] And it's disconnected from so much of how we view business as hard and masculine and. And sharp as opposed to sort of round and, uh, and high touch anyway, um, we could we'll save that for another podcast, but yeah,

Dave: I would love to explore that linguistics of the experience strategy.

That would be awesome.

Aransas: Alright, so what's number three,

Dwayne: no, number three. Uh, for me, um, You know, these are kind of building on each other, but ineffectual funding strategies. Uh, what I find is very few companies define how they're going to fund innovation in a, in a well articulated way. But I find usually what I find usually happens is they overspend early lose patients and understand.[00:22:00]

The innovation really needs it. Um, I had talked to a CEO once and I said to him, if anybody, me or anybody on my team ever comes in here and says, we need a million dollar budget because we have, or we need a million dollars because we have an idea. You have permission to fire me on the spot, because if we don't come in with evidence of why it's a good idea, like, what I want to do is spend a few thousand bucks to figure out.

Yeah. If it's even worth pursuing and then spend, you know, maybe $10,000 and figure out, is there a resonance there and then maybe 30,000, you know, like I'm making up numbers, but like smaller, smaller chunks early on. Because again like that, like we were talking about in the previous one, uh, if you have 50 ideas, 49 of them are probably horrible ideas and you can't, you know, you can't tell at the beginning, which one are the good ideas and which one of the bad ideas without, you know, investing a little bit of time and energy into researching.

You know, some level of money. I think that also leads me to, you know, we hear a lot about fail fast and what I think, you know, when I talk [00:23:00] to executives about that, one of the things I say is it's really about failing cheap as well. Like rather than spending 20 million bucks to find out you pursued the wrong idea.

Let's spend a little bit and find out it's the wrong idea early on and pivot and do something else and keep going until we find the right idea. Um, you know, so I think. Failing fast, failing cheapest and important. And I think that's not usually not usually employed with funding approaches and I, and I, and so often I, I hate to use the term stage gate funding because it sounds a little, I think that presents, uh, the two structured, but like hitting.

Goals and milestones before you move forward. And you know, when that goal milestone might be, we did some secondary research and, you know, maybe we did a DVF, a scorecard, and it looks like there's some, we got a lot of questions, but it looks like there's some promise there. So let's go ahead and invest some more money and to it and start talking to some end users and find out what their, their needs are.

I'm like, oh, okay. That's still [00:24:00] panning out. So yeah, I think, you know, having some sort of innovation. You know, kind of innovation ops and making decisions about smart decisions about funding is something that we don't see a lot of.

Aransas: And, and do you mean this at the organization level beyond just the lab level?

Dwayne: Uh, yeah. I mean, it I've seen it at both actually, but usually it's a, a problem with the organization and I've even seen where. Uh, labs that would try to be rigorous about that. Someone would bring them an idea and, you know, they say, great, here's the process. Here's what we're going to do. And they would say, oh, and this is like a literal example.

I'm going to go to the CEO, asked for a million bucks. Cause I'm pretty sure there's a, there, there, and I'm just gonna run with it. And so you'll see, people's kind of short-circuiting the system and going, or, you know, even when you, even when you think like, oh, we have put this together and nailed down a system, you know, [00:25:00] Bad behavior still exists by people who hold the pocket books.

It's not gonna, it's not going to change things. It's

Dave: almost like a, you need the innovation lab to be very agile and spend the money very successfully, either upfront or at the back, but not so much that it, that it causes trouble for the company. But once the company makes a decision to go, I find also.

They haven't thought about how they're actually going to invest in, and if it changes their business model in any way, shape or form, right? Oftentimes it costs money, a lot of money in order to do it. Do you see the same thing?

Aransas: Let's spend a bunch of money to find an idea. We'll build the mini car.

Voiceover: And

Aransas: then, oh, wait, we have to market the mini car.

Oh, we have to, with that car next to our watches. Oh, we [00:26:00] have to have an entire team to maintain the cars.

Dwayne: Yeah. Yeah. And you guys are actually transitioning and number four, which is unable to take something from an innovation experiment into a full blown product. And so you guys are hitting on some of the exact things there.

You know, not realizing, you know, oh, they came and asked for a million bucks, they're going to make this thing like, oh, well, now that it's a thing. Now we need to hire a sales team that understands how to sell it. We need to hire a support team that gets, you know, like it's the, the spending doesn't stop there.

And so a lot of times when they realize how much it's going to cost to actually take the market, it's a problem. I think also you get a lot of, oftentimes if there's an innovation lab, It gets transitioned into a product team or a BU and there can be, I think, three things that go on there. One is sometimes I think they get moved too early.

They're not actually completely baked and it, so there's still innovation going [00:27:00] on and you put it in a team that's there to operationalize things and make things super efficient in a way that. Get it to market, but not to keep innovating on it.

Aransas: I think also that either.

Dwayne: Right, right. Yeah. But yeah, that's exactly it.

Like there's a change, change the business, run the business. They are very much great to run the business. Yeah. It's a, just a different job, different mindset, different skills. Yeah. But totally agree. Um, I think also sometimes you run into the not invented here, like, oh, the innovation lab through this over, and now it's our problem.

Let's figure out the most efficient way to kill this. Yes.

Aransas: I think if it is hospice,

let's keep it sort of alive. Really. We're actually killing it gently. It's just a little bit of a morphine drip every so often to keep it comfortable.

Dave: Yeah. That wouldn't be large beverage company that we all know that those types of projects, ghosts. They call them ghosts and [00:28:00] they're like, we gotta smell the ghosts.

Dwayne: Yeah. And I think, you know, you're talking about the morphine drip that's, uh, they, they don't want to kill it. Right. They want an executive to come in and kill it. So they're gonna nurse it along until finally, you know, the CEO or the CFO is like, why do we, why do we continue and invest in this? And he'd be like, oh, okay, we'll go ahead and kill it.

I think the third thing that happens in say product teams. So I think it's. A very common one. I think this is the most common is that you send it to a product team and they're very, well-intentioned, it's not, you know, like, I think there's a nefarious illness that we've talked about in the previous one where I think they're well-intentioned, but they get it.

And I think there's a lack of communication about what it is and what makes it special and why it's innovative and that they look at it and they like. I see it, but I don't really get what it is. They start trimming the edges off until it looks like something that they can recognize. Lots of innovation all

Dave: the time, [00:29:00] especially new language, new, um, uh, new skillsets.

They're like, well, can we call it gold diagnostics, but we don't actually do the diagnostics part. We just say, we just asked. What's third goal.

So exactly I see it all the time, which is part of the reason why I think a lot of companies end up creating functional, incremental innovation, because it's a lot easier to, to, um, buy technology and try to get some of that functionality in than it is to create an experience. That is richer and has soft elements to it that, um, um, maybe they need training around or they need a different channel around or, or something along that line in order to be successful.

Dwayne: Absolutely. [00:30:00] Yeah. Yeah. And I also see in companies to an unwillingness. To allow a new offering to cannibalize any of the existing offerings, even when it's in their own best interests. Yes. I worked with, uh, uh, consulting with a company, uh, that had a monopoly and it was because, um, they made a specialized product that had to be like, they had created factories that could.

Uh, thing that was a huge investment. So no one else could really compete with them. Uh, that was immediately wiped out when digital became a thing. Uh, and I guess the media is too strong, a word like it, the writing was on the wall. And so, uh, they brought me in my team and to help think of like, well, what do they look like in a digital space?

And so. Created [00:31:00] a potential solution that everybody was really excited about until it got far enough up the chain. And they're like, well, wait, somebody would buy that. It would be cheaper than our core product. And we would actually lose profit. And what we tried to explain to them, This is going to get built and then, you know, you can disrupt yourself or somebody else is going to disrupt you.

Cause that whole barrier to entry has been taken away now. So, you know, couple, couple of people in the garage could make a competitive offering to you now where, before it had to be somebody that wanted to invest millions and millions and building a factory. Yeah.

Dave: You know, one of the places that we see that the most happening right now, Is in television companies trying to hold on to their core business model, even as, um, streaming is a completely different approach.

And they'll go to great extent to say things like what the customer [00:32:00] really wants is an over the top experience. You know, by which they mean there's a device that sits above the, um, the TV and, um, we would call that a DVR. Right. And that's not what they're talking about. So, um, I, you know, like that, it's really, really hard for a culture to embrace change when the entire business model is going to change because.

Dwayne: Yeah. Yeah. And with that too, you see addiction to bad profits. Like you think, I think back if like, uh, everybody talked about blockbuster Netflix and like, oh, why didn't blockbuster? Like when they were mailing DVDs, blockbuster could have, they had more money. They had more brand recognition. They could have disrupted that, but they were, they were addicted to late fees.

Like that was, you know, that was free. That [00:33:00] was a gravy train and free money. And so they didn't want, you know, they just wanted. Uh, Netflix stuff, fail and go away. They didn't want to compete with them. And so banks are the same way.

Dave: Yeah. Banks do the same thing. Yeah, they totally do.

Dwayne: Yeah. Yeah. There's I think a lot of industries you can look and you can find that kind of hidden addictive profit of like, Profit channel.

That's just kind of a gravy train that nobody wants to, nobody wants to mess with.

Aransas: Yeah. I think that the transition to digital has been that for so many companies, how, and it spans really every industry that was pre-digital to say, how do we, how do we give up the business models that we operated under?

How do we give up these highly profitable? Um, Agreements that we've had with a retail consumer and temporarily [00:34:00] let go of some of that for a longer term view. So take us to number

Dwayne: five. Yeah. Number five is, um, a little bit more meta than the ones that I've been talking about so far, but just really, uh, not knowing how to build a position at an innovation team.

From the get-go. Uh, and so like not structuring it right where you've got representation from business experience and technology, um, and making sure that you've set it up in a way that all three of those, um, offerings have a seat at the table and a voice in, into the innovation process. Uh, and then also.

Not having a connection, a line of communication back into the business. I think, you know, where we talk about the not invented here, um, piece like trying to figure out how you can bridge that sooner. And I can talk about some examples of that [00:35:00] deployed employed in the past. Um, and I think also, uh, We talked about it before with executives, not necessarily understanding all the value that's coming out of there.

And so I think having an oversight board, um, we've, I've set it up in the past where it's like a venture board, basically that, you know, you guys are a venture fund and we're coming back here pitching the different ideas to you getting buy off. And so they can see be into the sausage, making a little bit more and see the process as it progressed progresses.

So I think there's like this really setting up the. Lab for, for a success to begin with. And I think we also touched on this before. I often see, um, them get staffed entirely with people who have been successful in the organization at running the business. And like we talked about, you know, run the business and change the business or different school skills.

I I'm, I'm a big proponent of bringing. [00:36:00] Existing employees in that want to learn the skills. But I think you can't, you can't take a bunch of people that have been doing one type of work, put them in all in another type of work and hope that they just are organically. Get it and do it. You know, it'd be a.

Equally as if you took an innovation lab and said, well, Greg, congratulations, you guys now are a product team that would fail misery. Right? Cause they don't really know how to run the business. And so, you know, but you could take people from innovation and put them in a product team with other product managers and product leads and help them understand how to build that muscle.

But I think what I see is a desire to be like, oh, let's just take all these people that we think. Our good. And we'll put them in this innovation lab and they'll start innovating. And that's just not, they haven't built that muscle yet.

Aransas: Yes. Sort of counter-intuitive honestly what they know is how to run the existing business.

Dwayne: Exactly.

Aransas: So talk to us about the three functions that you mentioned, what role do [00:37:00] they do they play in the process, ideally in your ex.

Dwayne: Yeah. And what I, what I see is, um, so, you know, uh, probably a business experience and technology. Oftentimes I see innovation labs set up in one of those functions and they might have some of the other functions, but that function is in, like, for instance, you know, if, if your innovation lab isn't an ITT, Technology is going to lead the discussion every time.

And really it starts to become more of a, an invention and tinkering team, like, you know, just trying out new technologies versus if you put it in a entirely business silo, you're gonna, we're going to run into like what we were talking about just a few seconds ago of it's going to be the business that drives it.

If it's on a it's on a product team, product is going to rule the show. It's gonna. Take the form of how do [00:38:00] we make new products that look a lot like the existing products we have and get them out to market quickly versus anything more disruptive that you're going to look at. Uh, and then I've never seen a innovation team been siloed entirely in the experience team.

Usually what I see is. It's either put in technology or business and whoever's in there holds the most power. And you know, if it's in the business, technology is basically just a, um, you know, a technology agency for them basically like, oh, we got this idea. Technology says, oh, let me go figure out how to build it.

Versus if you can bring all three to the table where you're thinking about okay. From the get-go. What is the business case for this? How does it align with our bigger strategies? What experience do we want to create and problems do we want to solve? And what are the mechanisms we have to solve it? And, you know, versus versus everybody being reactive to one power player, I think creating a balance of power is creates a better [00:39:00] opportunity for disruption and really finding, you know, kind of groundbreaking innovation.

Okay.

Dave: Can I ask two questions to, to that one? One question is, um, do you think that it works best as a part of a center of excellence, for example, where maybe they stay within their own discipline, but then. Is there a part of a center of excellence that is independent. And the other question is whatever happened to the good old fashioned skunkworks approach

Dwayne: a

Dave: really long time

Dwayne: ago? Yeah, I think, uh, uh, question one. Um, yes, I do think, uh, creating a center of excellence. Basically reports up into that Metro board that's, uh, you know, C level SVP [00:40:00] level paid people, and it, um, makes more sense where they can run independent of the business, independent of it, and really be looking across the organization of what the best opportunities for the organization are.

That's one, one challenge. I find, uh, I'm kind of veering off on a tangent here, but it made me think of it. When, when it sits, like when we talk about business, like if it sits within the product team, product managers, good product managers are very like the, you know, they view themselves as the CEO of that product.

And they're very invested in that product, which is great. When you have a good performing functioning product, it's really hard in innovation. I find that oftentimes. It can be harder for people who have built up a good product management muscle to be a successful on an [00:41:00] innovation team because they get invested in the idea and the solution that's coming out of it when you don't want to at that point, right?

Like you want to, like, you want to be able to say, you know what, we've invested this amount of time and. It's not an effort. We want to continue to pursue let's document our findings and move on and versus having somebody that yeah. Has invested in. It's like trying to figure out like, no, we can make this work.

We just need to do this. We need to do that. Um, and then on your second question on the skunkworks, I think that's where you come into really big problems with the, um, last, uh, Failure point that I had talked about, which is transitioning from the innovation. And then do the business. Cause then it's done.

It's definitely like, not only was it not invented here, it was like, I didn't know about it. And all of a sudden this drop in my lap, like I think it's creates more issues. I think it also, um, is more [00:42:00] likely in a skunkworks. There's more likelihood that solutions that come out are. Not going to be viewed by leadership as something that is aligning with their strategic vision and where they're trying to take the company.

Oftentimes it can come out feeling like a tangent cause they're too disconnected. I think, I think having that independence, like a skunkworks with being connected to all. Pieces so that, you know, there's constant communication flow, both directions, like so that the business understands what you're working on, but you can also see and hear and experience what's going on in the business so that you're designing things that align with the strategic direction of the business.

Yeah.

Aransas: It kind of goes back to, you're not created here risk and I think too, the other thing that you're pointing to is the value of having a. Okay. Process by which employees in all functions at all levels can share those ideas with senior leadership so that the ideas themselves are, are being encouraged, but that the energy and the investment is being [00:43:00] saved for those ideas that are strategically well aligned.

Dwayne: Yeah. I definitely agree. And there's something that, you know, a lot of like open innovation projects. I I'm iffy on. Um, I figured out why recently. And so, you know, if you're too close to the problem, oftentimes your ideas are going to be very incremental. Like how do I fix this one little piece? And you're, it's hard to back up from it and be like, oh, you know, if he thought about it this way.

And so, uh, someone was telling me about how they framed it. And I was like, ah, and I, I apologize. I don't remember who it was because I'd like to credit them, but I don't recall rather than they were doing open innovation. Project. And, but rather than saying, you know, bring us here, bring us your ideas. They reframed it as bring us your problems.

And so, you know, basically what I'm thinking, I've framed that wrong, but like bring us your [00:44:00] problems or, or, you know, basically like, what do you observe out there that could be better? You don't have to have a solution for it. Just like I've noticed this. And I think it also gives people okay. Yeah more, you know, if people don't think they have good ideas, but like I noticed that, you know, every time I go by the space, this thing's happening, but it seems broken.

I can be like, I don't know how to fix up it. This is going on. You know what I mean? Like

Aransas: better creative hygiene. Right? So instead of training people to. Jumped to a solution. We're training people to look at problems and then use that as the path forward. So give me a number six before we run out of time, I'm excited to win.

Dwayne: Yeah. Number six is, uh, just lacking the leadership and culture to support innovation within the organization. So, uh, you know, having leadership that doesn't understand that there's a difference between run the business and change the business, uh, having leadership or a culture that. [00:45:00] Tolerate some of those cannibalistic potentially cannibalistic projects.

Also, I think there's a lot of leadership and culture that won't accept and move into new business. Extensions of their existing business models. Yes. But if it's a whole new business model, I think that scares a lot of leadership and people within an organization.

Aransas: Yeah. And it's so interesting. I think that's come through in so many of these.

So I am going to do my best to send the size what we've talked about as a. Power list based on all that you've shared. And my neck is going to hurt from all the head-nodding I've done in the past 30 minutes. Um, you were so right on Dwayne. So number one, just because there's a problem to solve it doesn't mean that it's your problem to solve.

Number two, stop making big bets and start making smart bets by starting with the right insights and doing the proper design thinking and for three fail, fast and cheap, [00:46:00] and, uh, know that the spending is really going to be most important at the end of the process. Next transition consciously ensure that the right teams.

Uh, technology, the right investments are in place at the right moment. There was something you said that I sort of distilled as know when to hold them, know when to fold them, right. Like we have to, we have to get good at capturing the insights and moving on. We can't expect to win every time and that the learning is the wedding.

And, um, finally build a well-rounded and empowered innovation team and oversight board. Slapping titles and labels on these things does not make them a reality. And finally last, but certainly not least is foster a culture of innovation from the top all the way down. Um, innovation only happens in an organization that is.

Primed to [00:47:00] incubate innovation and to accept innovation as we've, as we've said in so many ways through here that there is, there can be, uh, for so many reasons, resistance to growth and, uh, we all. We all suffer in those cultures. Dwayne, thank you so much. I know it's not easy to distill, um, uh, long career into a 30 minute episode, but I think you rocked it.

And, uh, I really hope that all of you listening will take these words to heart. They're so relevant. They're so applicable at any size organization. Innovation is essential, but it is not promised. It only happens through a thoughtful, intentional practice and through an organization that's ready to support it.

Dwayne, if they want to find out more about you, where should they go?

Dwayne: That [00:48:00] is a great question. I hadn't thought that one through, um, probably just find me on LinkedIn, I think would probably be these easiest.

Aransas: Cool, cool. Well, a be shared, be sure to share that link in the notes, Dwayne. Thank you so much for your time today, Dave.

Thank you as well. And to our listeners. Keep coming back. We want to know what you want to know. So reach out to us and let us put, you'd like to hear about it next. Thank you so much.

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