Jeff Degraff's Blog, page 16

Time To Turn Michigan’s “Three Economies” Into One

When it comes to economic growth in Michigan, one size does not fit all. Take a look at the varying scope and scale of companies here and you’ll find a general pattern of three different types of businesses associated with different regions:  large multinational corporations in Southeast Michigan, small high-tech start-ups in Ann Arbor, and family-owned, mid-size companies in Western Michigan.

Each of these micro-economies has its own set of dynamics. In the Detroit metro area, big companies connected to the auto industry and heavy manufacturing dominate. These organizations are sensitive to changes in the economic climate, and when the industry falters, nearly everything falters with it. The good news, though, is that these large organizations provide stability in the region.

The story in Ann Arbor is completely different. Despite its proximity to Detroit, Ann Arbor does not depend on the same massive companies. With the University of Michigan as an intellectual, cultural, and financial hub, the industry is knowledge and the spirit is an entrepreneurial one: people don’t depend on pre-existing companies—they start new ones. Consider the fact that the founders of Google and Groupon, and dozens of other successful new economy entrepreneurs, got their start in Ann Arbor.

CREDIT WIKIMEDIA

The thing about Ann Arbor,  though, is that all this start-up energy and growth is unsustainable. The people who start new companies don’t stay in Ann Arbor. They move elsewhere, to places where they can get the capital they need to quickly grow.

There is yet another economic reality in Western Michigan, where neither big businesses nor small start-ups dominate. From Kalamazoo to Traverse City, mid-size, family-owned companies thrive. Grand Rapids serves as its economic center. Excellent sources of jobs, these organizations are sustainable units of reliable profitability. They make the region a particularly stable place and grow at a steady pace. But attracting younger, highly skilled talent into this region can be a challenge given its distance from a vibrant cosmopolitan center.

In an ideal world, these three different economies would be interconnected like concentric circles with the large companies at the center, encouraging the growth of adjacent mid-size companies, in turn promoting the development of surrounding smaller companies.

The problem is that these three economies simply don’t sync up. They are so disconnected from each other, both ideologically and economically, that we don’t benefit from the rewards of their potential synergistic relationships. It’s time to bridge the gaps between these three regions.

So what’s The Next Idea?

If we consider our community as a collection of companies, organizations and inter-related civic interests – not as discrete entities – we will begin to see ways in which to create valuable connections. Think of it like a shopping mall: A few anchor stores like Macy’s and Nordstrom, a wide variety of mid-size category stores like J. Crew and Sephora, and a handful of specialty niche stores like Coach and Godiva. A mall that has achieved both a balance and some coherence between these three types of stores usually provides a better shopping experience than ones with missing pieces.

One way to do this with Michigan’s economy is to identify three matchmakers for each of the three basic varieties of businesses. These individuals would work in cooperation with the Michigan Economic Development Corporation in cross-regional teams to identify and create efficiencies, drive sales and develop innovative solutions that could not be created separately.

For example, a start-up firm in Ann Arbor develops a breakthrough oil filtration material but lacks the capability to produce or sell it at scale. Matchmakers would meet and find a company in Kalamazoo that makes oil filters for snowmobiles and boat motors and help them license the technology. Then the matchmakers meet sometime later to discuss an opportunity at a major automobile manufacturer in the Detroit area that is looking for an oil filtration solution that greatly increases gas mileage while being more eco-friendly. With the group’s help, the corporation licenses the technology from the mid-size company.

Trade groups do this all the time, as do governments. For example, Canada and Germany routinely package collections of businesses and negotiate favorable licensing agreements and provide entrée into new markets. That is, they actively connect the products and services of small, medium and large companies and represent them as a single solution to potential buyers.

Consider this the regional equivalent of a business model innovation. That is, the innovation doesn’t exist in any product or service offered but rather how everything fits together to become a novel and attractive solution. Think about how the real innovation in Apple doesn’t exist in any one gadget or service but rather the seamless connection between them: Your iPhone works with your iPad and connects to iTunes and they’re all serviced by the Apple Store. The innovation is in how it all syncs up. Now if we can just do something similar with Michigan’s three economies.

Share Your Ideas:

·         How would you select the matchmakers who would connect the state’s regional businesses?

·        What other ideas do you have for getting people in Detroit, Ann Arbor, and Grand Rapids talking and collaborating more?

Join the conversation in the comments section below, on Twitter or Facebook, or let us know your Next Idea here.

Click here to listen to my interview with Michigan Radio.

Originally published by MichiganRadio.com on December 1st, 2014.

How to Jump-Start Radical Change in Your Company

When Steve Jobs developed the iPod in 1997, he assembled a diverse group of thinkers with different points of view and areas of expertise. They didn’t invent something new. Rather, they brought together disparate technologies that no one had ever thought to use alongside each other before. This is how breakthrough innovations happen: when a variety of high-performers collaborate to run experiments in a high-energy environment.

If a wild, radical solution is what you seek, then jump-starting is the way to go. Jump-starting is the creation of new ideas through exposure to an assortment of stimuli and hand-on involvement with the challenge at hand. The key to the jump-start process is learning through trial and error.

Jump-starting is invigorating. It’s about the generation of contagious excitement. It’s about risk-taking. If you’re looking for low-risk improvements, or if you need to extend or leverage your existing technologies, it is better to plan more systematically than to jump-start. Jump-starting will help you achieve any of these outcomes:

Generating breakthrough ideas quickly
Creating energy and fun
Transforming winning ideas into new initiatives, products, or services
Challenging institutional thinking and boundaries

Jump-starting works best when your organization is either in a crisis moment or a moment of intense success, outperforming expectations. It is in these extraordinary conditions when the risks and rewards associated with radical change are reversed: you have a lot less to lose and a lot more to gain.

First, identify the key problem. Write a challenge statement that clearly articulates the challenge to be solved. Make sure that the challenge is within the means of this group to address.

Then, collect data: what do you know? What do you need to know? Who knows what? Gather some facts, information, and opinions by consulting with people who are experts in their fields.

Next, generate as many ideas as possible. Keep in mind these guidelines used by design firm IDEO when brainstorming:

One conversation at a time
Stay focused on the topic
Encourage wild ideas
Defer judgment
Build on the ideas of others

Review your ideas and identify those that promise the most breakthrough solution. Feel free to combine interesting ideas or add new ones.

Don’t just pick low-hanging fruit. You need to choose the ideas that provide a solution to the challenge and that are feasible–within the realm of possibility–but you also need to choose those that have the “wow” factor. Does it make you and the people around you excited? Is it important to you? Is it more special than your ordinary goal or task?

The best part of the jumpstart process is the high energy that it sparks. Closure is overrated. Don’t flip to end of the book right away. Understand that the messiness of the middle is the best part of the story.

Looking for “The Next Idea” to Move Michigan Forward

Originally published on MichiganRadio.org

The creative, the visionary, and the just plain out there.

That’s the goal of Michigan Radio’s new project, The Next Idea.

The on-air and online project will focus on creativity and innovation and ideas to move Michigan forward.

We’ll be featuring this project here on Stateside and we will look to you and ask for your ideas.

Here to tell us more is the Next Idea’s executive producer Joe Linstroth, and Jeff DeGraff, a clinical professor of Management and Organization at the Ross School of Business at the University of Michigan.

Listen to our conversation with Linstroth and DeGraff below:

http://cpa.ds.npr.org/michigan/audio/2014/11/ss_11_17_14_DeGraff_and_Linstroth_TNI_0.mp3

DeGraff says, to him, innovation means having the ability to make something better and new. He’s interested in seeing how people make an inquiry into problems.

Linstroth, talking about The Next Idea, says what he’s looking for are people with ideas – people with the passion and ideas to change the status quo.

The big question for Linstroth and DeGraff is “How do we move the state forward?”

It’s a question Linstroth says needs to be broken down into more manageable sections.

For help, the project will recruit contributors from across the state and from a variety of backgrounds –including from big corporations and academia, incubators and non-profits — simply anywhere someone has a potentially revolutionary new idea to make Michigan a better place to live and work.

Linstroth and DeGraff say they plan on rolling out the project in the beginning of December.

How to Find Your Next Super Star Employee

The biggest myth about innovation is that it is done only by geniuses who work alone. The truth is that innovation happens when ordinary people learn to work together. The key is to find individuals who don’t think like you, who can fill in your blind spots and make up for your weaknesses.

In order to encourage effective collaboration within your organization, you need to find people who are good talent-scouts. These are the teachers, coaches, and connectors in your world–the people who have a natural eye for talent, who have the skill of finding and nurturing creativity. They know who needs to sit next to whom when it comes to building effective teams.

Talent-scouting takes time. It is a long-term kind of growth that emphasizes the cultivation of new knowledge and the building of a dynamic organizational culture. If you’re looking for systematic, reliable outcomes or guaranteed short-term payoffs, then talent-scouting is not for you. The pace of talent-scouting is unpredictable. But once you do assemble a diverse team of high-performers, the culture you establish will be sustainable into the future.

Talent-scouting can help you achieve any of these desired outcomes:

Finding, developing, and retaining the best people
Establishing a set of shared values
Creating a collaborative work environment where people are encouraged to learn from their mistakes

Before you bring in the right people, determine your needs: assess the strengths and gaps represented by your current team. Then, start looking for people who:

Work in an environment with values like yours
Have successfully been a member of another group or team
Have had to teach others how to do what they do well
Are currently customers who are passionate about your products or services

Next, test for the right abilities: as part of the evaluation process, ask each candidate to spend some time working or meeting with the team. Be sure to orient your new hires adequately. This means apprenticing them to advisers who exemplify your company’s values and practices.

Give your new hires slack in terms of time, space, resources, and the opportunity to improvise. The goal is to encourage them to cross boundaries. Promote risk-taking and avoid imposing control structures that deny high-potential hires the experiences they need to grow. Remember that the most essential people on your team are not the best innovators–they’re the people who know the best innovators and know how to bring them in.

The Low-Risk Way to Design Breakthrough Products

The fastest way to build something is to deconstruct it. Think about all those companies that produce complicated things on an insanely large scale: Toyota, McDonalds, Boeing. If you want to build enough cars to move the entire world or sell a trillion burgers or create an aircraft with millions of moving components, you need to first prototype the final product and then systematically divide it into its individual pieces. If you look at each part separately, you can develop a product faster and more flexibility. I call this process modular design and development: breaking down complex systems into parts that can be developed and tested independently.

This strategy works best on products or processes that are highly complex and contain identifiable subsystems. For example, think of the intricacies of a new surgical methodology or the construction of a eco-tech water filtration system. It also works best in situations of high volume or scope–when you want to take your product or service to scale.

Modular design and development can help lead you to any of these desired outcomes:

Methodical development of products and services with reduced risk
Outlining of clear methods for designing quality
Adapting and customizing products or services to keep up with a changing marketplace
Reducing wasted effort by avoiding reactive behaviors

Modular design and development is not about radical innovation. It’s about efficiency and reliability. It’s excellent for those who desire incremental innovation, essentially building off existing sciences, technologies, or systems. Testing early and often is crucial to eliminating bugs on individual pieces before they are integrated. With this technique, you can experiment with numerous variations to find the optimal design with the lowest risk.

Be methodical when you perform modular design and development:

First, clearly define the current specifications of the product.
Next, create concrete standards for development.
Then, estimate and assign time and resources.
Build prototypes, models, simulations, and proofs of concept.
Identify and communicate lessons learned from experimenting with these variations.
Finally, return to the first step and begin the next iteration of the product.

The goal is not to avoid failure but to accelerate the failure cycle with low risk of impact. Most early simulations and prototypes will inevitably fail. But these will move you closer and faster toward the product that will work.

What Does “Making Stone Soup” Have to Do With Business Innovation?

Originally published on SmallBizTrends.com

By Charles Franklin

If you were hungry and only had access to a large iron cauldron, stones, and water, would you be able to survive?

In a rather interesting tale, three soldiers managed to use those three items to “make soup”  everywhere they went.

How did they do it?

These soldiers would go to a town and put the stones in a cauldron of boiling water. Intrigued, the townspeople would offer to help the soldiers with whatever food and advice they could spare. By the time the townspeople were done, the soldiers had an incredibly delicious soup — and enough food for days!

This story shared in a book by Jeff DeGraff exemplifies the basic concept of “Making Stone Soup: How to Jumpstart Innovative Teams.”

DeGraff argues that most business innovation doesn’t develop with the lone, talented individual having an “Eureka” moment. Rather, most business innovation develops  through a collaboration of the right people with the right tension in their environment.

Using the stone soup story as a model, innovation came from a combination of the right people (hungry people desperate for food) and the right tension (social desire to help strangers).  In “Making Stone Soup”, DeGraff attempts to break down the individual variables that make up the ‘right people’ and the ‘right tension,’ so business owners can create an environment of innovation.

Finding Your Business Innovation Type

According to the author,  innovation is not a single variable. Instead, innovation comes in four flavors housed in a framework called the “Innovation Genome”: Collaborators, Connectors, Competitors, and Controllers. These four flavors represent characteristics of individual team members and characteristics of the business as a whole. So, you could be a “Connector” individual who works in a “Competitor” type company or the other way around.

Knowing your “type” is only half the battle, however. Business owners need to add in the right tension. That tension comes from balancing the types against each other, just like the yin-yang circle. Within each innovation type, DeGraff identifies key traits which happen to balance conveniently against each other.

As an example, “Collaborators” work best by smoothing out relationships within the team, while “Competitors” work best by pushing the team forward. One group in the team moves forward, while the other keeps the team steady.

Getting that balance is key. It is so vital, that DeGraff suggests that you look outside your company if you can’t find it within.

Innovation types aren’t the only thing discussed in the book. DeGraff also delves into the process of innovation. He outlines a simple strategy that guides a prospective team from start to finish on the process of innovation. This strategy focuses on uniquely focusing on specific targets and using your innovation “type” to reach that target.

Why You Need This Book

“Making Stone Soup” offers a different spin on the concept of innovation. Instead of looking outside the team to processes and procedures, DeGraff urges team leaders to look inside themselves and their team dynamics to find the innovation they need. This is definitely something business leaders can benefit from.

The book is upbeat and uplifting, perfectly geared to get every reader in the brainstorming mode that is required to be innovative.

“Making Stone Soup” is graphically appealing. That appeal is not just in the pictures included, but in the font and layout of the book itself. All of this is designed to create the mindset of innovation and creativity the book is trying to foster.

Who Should Read “Making Stone Soup”?

“Making Stone Soup” will be of special interest to people who love the psychology of teams and businesses. While this book offers advice that can be used by everyone, the book is especially designed for two types of small business managers at two critical points in their business development:

during the start-up phase
during the launch or start of a new product or service

The book offers invaluable advice that can be used to identify opportunities (especially internal opportunities) that might be missed.

On the other hand, the brevity of the book will probably be the biggest issue for those who want more. Although DeGraff goes into quite a bit of detail on the different types of innovation, he doesn’t really offer a lot of detailed examples or case studies that show how to use their “innovation genome” in a down-to-earth way.  A general guide is provided, but it can be hard to nail down exactly what to do.

Overall, though, if you want to be inspired to “become more innovative”, this book is a great place to start.

This review was based on a review copy of the book.

The Key to Creating Partnerships That Work

The coming together of two distinct organizations isn’t merely difficult–it’s nearly impossible. The statistics are overwhelming: a recent global survey conducted by KMPG found that 83% of mergers fail. But yours doesn’t have to. How do you overcome these odds and create a winning partnership?

First, you need to decide if a partnership will be beneficial for you and your organization. If you’re looking to connect with new markets or develop new capabilities, then partnering is a good idea. By capitalizing on each other’s capabilities, reputations, and access to customers, partners extend their reach and can offer greater value to the market. There are some circumstances when it simply makes more sense to work on your own. If you want to permanently differentiate yourself from your competitors or create long-term barriers for your competitors, then partnering is not a good idea.

Partnering can help lead you to any of these desired outcomes:

Access to new markets
Reduced time to market
Development of new capabilities
Overcoming resource barriers
Reducing risk

Now that you’ve diagnosed your reason for partnering, it’s time to get to know your potential ally. Gather the facts and analyze key information about your prospective collaborator by asking these questions:

What products do they sell? What are their target markets?
Who are their key competitors? Who are their other partners?
What are their unique competencies?
What is their culture like? What are their strategic aspirations?
How well do we fit together?

Partnering works best when the parties involved have complementary needs. These might include customers or products that the other partner doesn’t have. Partners must recognize and appreciate the advantages that each party brings to the alliance.

Staying focused on mutual benefits is the key to making a partnership work. As distinct firms, you will not share all the strategic objectives of your partner, and it would be dangerous to assume that your joint strategy is the same as your individual strategies. Remember that what unites you is the end product and the promise of mutual gain.

The best partnerships produce something new that could not be produced by any one partner individually. Effective partners work actively to maintain a good rapport. Rapport can’t be bought; it comes through working together and establishing trust. Communication is everything on the way to synergy. It’s the skill that will help you defy the statistics and become a success story.

4 Innovation Strategies to Forecast the Future

What’s going to happen to the Euro in the coming year? What’s the next game-changing political development in the Middle East? What’s the fate of healthcare reform? The answer to all of these big, complicated questions is simple: we don’t know. We have no data on the future where innovation happens. This is what distinguishes innovation from all other forms of value.

For this reason, innovation is about experimenting, trying many things at once and seeing what works. Forget what people tell you about coming up with a plan and sticking with it. When you innovate, you need to change your mind. You need to make things up as you go along.

Excessive data-gathering is a form of resistance. We’ve all had to sit through the meeting before the meeting, read the e-mail about the e-mail. Don’t get stuck in the planning cycle. Run experiments now.

You can’t predict the future but you can look around and discover trends and patterns–drivers–that will help you reach your targets. Here are four places to look as you design your experiments:

Push: These are new technologies and new methods inside and outside your industry, like the development of non-invasive surgeries in the medical world.

Pull: These are emerging consumer demands, like the widespread desire for environmental-friendliness in the green movement.

Clash: These are the rising and existing competitors in your field. For example, think about the startups that we haven’t yet seen or companies that seem dead but then often surprise us like revitalization of local hardware stores in the 1990s.

Coordinate: These are ways of synching things up–technologies and devices that pull things together, like BaseCamp, the web service that facilitates communication among the diverse people working on the same project.

Consider all of these external factors–technologies, consumer demands, competitors–and ask yourself these questions: what is the probability that each of these things will actually happen? And, if they do happen, what kind of impact will they have on the success of your target?

Now that you’ve designed your experiments, it’s time to put them to the real test. In the early twentieth century, William McKnight came up with the now-famous 3M strategy test–a set of three questions to ask about an idea initiative. Now, almost a century later, they are still the best questions: Is it real? Can we win? Is it worth doing?

Part of innovating is stopping things now so can you make the room to do new things. Stop planning and start acting. Don’t let the uncertainty of the future slow you down. Be prepared to adapt as things happen. Expect the unexpected: leave room for the stuff you don’t know now.

How to Turn Conflict Into Creativity

Two talented people who have nothing in common are more likely to create something exciting than two talented people who think the same way. Harmony is overrated. Innovation is about bringing together individuals with diverse strengths who can push against each other and build something collaboratively that they never would’ve come up with on their own. Innovation happens when there is constructive conflict, or positive tension, within an organization–not total agreement.

The Innovation Genome is a creative map of organizational dynamics that tells us how competing talents and seemingly opposing worldviews can come together to promote growth. The building blocks of the Innovation Genome are four competencies–four types of value that your organization can pursue: COMPETE,COLLABORATE, CREATE, andCONTROL. On the surface, these values are at odds with each other. But once you understand the way they work, you can use them strategically to jumpstart innovation.

The COMPETE, or blue, kind of value represents a Darwinist approach that focuses on competition where the strong prevail at the expense of the weak. This approach represents the drive toward goals and the endgame of power, money, fame, and other tangible forms of success.

The COLLABORATE, or yellow, kind of value is the opposite of COMPETE. Where the COMPETE approach celebrates an aggressive, often cutthroat spirit, the COLLABORATE approach strives for connection, harmony, and togetherness. This approach represents human relationships, the identification with family and clan, and the greater good of Man.

The CREATE, or green, kind of value pursues radical innovation through wild experimentation and extreme dislocation of conventions. This means maintaining a visionary focus on the future, with great adaptability in new environments.

The CONTROL, or red, kind of value is the opposite of CREATE. Where the CREATE approach takes risks and thrives in uncertainty, the CONTROL approach works to eliminate risk. This is about being consistent, using reliable systems and procedures that promote stability.

Every approach has its downside. Red projects face the danger of becoming too bureaucratic. Green projects run the risk of creating too much chaos. Blue projects are sometimes shortsighted. Yellow projects may be overtaken by irrational enthusiasm. This is why you need to combine these approaches to make up for their respective weaknesses. For example, bringing together the stability of a red approach and the experimentation of a green approach encourages creativity while also keeping it within the bounds of procedure.

What happens when pragmatic thinkers work with big-picture thinkers? What happens when the goal-oriented thinkers meet the patient thinkers? This is the kind of variation that sparks innovation. Take a chance and surround yourself with people who don’t think the same way you do as you feel your way to the future. They just might surprise you.

Jeff DeGraff Interview on The JetSetter Show

Jason Hartman sits down and talks with Jeff DeGraff, professor for the University of Michigan’s Ross Business school and an expert in innovation. He has a new book coming out called, Making Stone Soup: How to Jumpstart Innovation Teams and has helped grow world leading corporations such as American Airlines, General Electric, and Coca Cola by using his Competing Values Framework system.

Listen to the full interview here.