By Marc Fenigstein - June 8, 2010
While I’m making my Silicon Valley enemies, I’m going to tee up Google as well.
A year ago, I wrote about Google’s growth from a spunky up-start, to a Microsoft-esque behemoth, signaled by CEO Eric Schmidt’s dismissing of the then-early Twitter phenomenon. The hardest part of becoming a giant and the leader in the field is remaining connected to your customers and continuing to capture market through empathy rather than force or coercion.
By Marc Fenigstein - June 4, 2010
Today we’re taking swings at gorillas. More than a year ago I posted two blog entries: one on Facebook and one on Google, both intimating that the companies were starting to veer off their positive trajectories. The year and change since has proven this out, and I’d like to take a look at what went wrong and how they can fix it.
By Marc Fenigstein - March 4, 2009
The web is all atwitter today with news of Eric Schmidt's dismissive response at yesterday's Morgan Stanley Technology Conference here in San Francisco to a question from Eminence Capital analyst, Josef Jung, of whether Google sees Twitter's real-time search as a threat. An explosion of schadenfreude-laden articles and a furiously defiant pile of tweets have already responded to Mr. Schmidt's comments that demonstrated a clear lack of understanding of both the present value AND tremendous future potential of the twitter platform. The contrarians at Motley Fool are holding out hope that it was a strategic maneuver pointing to a planned acquisition. But no matter whether a monumental miscalculation or shrewd strategy, the move is a classic page from Ballmer's book of wins and losses, and signals Google's metamorphosis from David to Goliath.
By Marc Fenigstein - March 4, 2009
As GM and Chrysler come back for more soup and our political system consideres not if but how we will refill their bowls (again), I am boiling with rage. Not the rage already expressed publicly by thousands and felt by millions that these companies are failures that produced the wrong products, poorly and inefficiently, and because they couldn’t sell them to us willfully are now snatching our wallets in a back alley. Nope, I feel that rage too, but this rage is that all three of them have the audacity to collude, to form an effective monopoly, to hold the American public hostage and our political system allows it because we don’t think of them as individual companies we think of them as the storied American Auto Industry. It’s an interesting take on pride in the American Auto Industry that we’re actually enabling them to continue to sully a 60 year tradition of the best automobiles in the world. It is time to shift our thinking. It is also time to let them fail.
By Marc Fenigstein - March 3, 2009
It’s not a new concept that just as we moved from an analog age to a digital age, we are now moving from a digital age to a virtual age. Cloud services, social networks, and VOIP are all facilitating the virtualization of our world and our selves. Interestingly, we are not virtualizing ourselves as a single entity. We are creating multiple personae for individual contexts. These are not characters we play, like Second Life; these are each intended as accurate but distinct representations of our true selves. We may, for example, maintain very different personae for Linked-In, Facebook, and our personal blog (sometimes several personal blogs). I call this phenomenon “segmented virtualization.”
By Marc Fenigstein - February 16, 2009
This is actually a piece I initially wrote but never published more than a year ago. I’ve resurrected it, because with the emergence of Hulu and Boxee, in the midst of the national (now-irrelevant) transition to digital, it feels as if we are poised for a sea change in what constitutes the television (or more broadly, home entertainment) experience. I think it’s a useful exercise to test these new entrants against the same criticism I had then. But let’s start with then….
At the time, I had attended a talk hosted by the Churchill Club, "The Future of TV: Connected and Personalized." The vision I saw and heard was “The Future of Television: Tired and Lonely:”
By Marc Fenigstein - January 22, 2009
Tonight’s Design Mind event in San Francisco generated a flood of thoughts on several topics. The thread that struck me most profoundly was the question of preserving artistic vision especially within the context of group collaboration.
Alonzo King (Lines Ballet Company) shared how dance, ballet specifically, had become rigid. It had become rote, as it became less about personal expression or experience and more about professional entertainment. It had become “dancing for the king” not dancing for oneself, and some thing was lost.
By Marc Fenigstein - August 30, 2007
Fear and Uncertainty in Las Vegas
In my previous post, I played around with an idea supposed to assuage fear of failure and encourage individuals to take the risks necessary to drive innovation. As I noted at the end, that is a fruitless effort if you don't address the organizational structures that drive what is at best an aversion to risk, and at worst genuine, paralyzing terror. Hopping from project to project, we folks in client service can forget that the product we're working may be everything to our client. It's not even that they have all their eggs in one basket; in some cases they only have one egg.
Some very clever folks like Roger Martin have done extensive work deconstructing the situation to get to the following insight: corporations require certainty; innovation by definition has uncertain results. When you have a P&L, and especially if you're public, the pain of not hitting your projections is far greater than the pain of projecting and achieving slow or flat growth. This is the fundamental barrier to innovation in large corporate environments.
The Conventional Approach
Corporations have tried to battle this with new organizational structures, often skunkworks-type arms that have various reverse incentives to free them from fear of failure and incenting them to try something new. I've seen this model fail or flounder for a couple of reasons:
A) commercial infeasability - free from penalties for failure, the work no longer actually ties to real markets or user needs.
B) product division resentment - product divisions, with their P&Ls, view these skunkwork groups as a tax and a burden.
In some cases, skunkworks IS further rewarded when a product group adapts their technology, but the model is fundamentally flawed because with few exceptions user-centric innovation can ONLY come from a group that is immersed in market and user: the product groups.
So how do you convince a product group to take chances? Usually through a slightly bumped growth target for a GM, which results in a mini-skunkworks group within a division that gets to play around for 6 months, while everyone else is trying to launch "real" product to guarantee cash flow, and then when the rubber hits the road the sales force would rather push the standard, certain product ("last year's product but blue this time!") than the new-fangled uncertain one to make sure they hit their numbers, and the innovation dies on the vine. Even when it does work it's one product among dozens... how is that driving real growth or building a strong brand? It isn't.
And Now For Something Completely Different
My hypothesis: large organizations can actually innovate better than small ones, and that they can do it across their whole organization, not just pockets of it.
I'm basing this on two premises:
P) Most work in this area seems to be around making large organizations behave like small ones (better information flow, more casual environments, etc)... that's the kind of emulative thinking ("it'll work if we just do what they're doing") that leads those same companies to introduce pale shadows of competitive products, rather than taking advantage of a unique position and capability. The broad and deep product portfolio of a large organization SHOULD allow them to tolerate much greater performance volatility from individual products than a small organization.
Q) If fear can kill innovation, fear can drive innovation. No amount of carrot-waving seems to help large companies innovate; in this post, I'm going to try the stick.
How can fear drive innovation? All we need to do is make the pain of introducing a collection of ho-hum repeat products with guaranteed mediocre sales more painful than introducing revolutionary products many of which might fail. Like any good charlatan I come armed with an #-Step Program:
1) Review performance on a 2 - 3 year view, not quarterly. Innovation is volatile, and you will have up and down years, but ultimately higher growth. It's tough to do under the watchful eye of Wall Street's quarterly reports, but over a broad portfolio of products, the volatility smooths out. Keeping on 2 - 3 year view will give team members a chance to recover from a failure. It is impossible to innovate in a one-strike-and-you're out environment.
2) Set impossible growth targets - set growth targets so high that there is no way to achieve them with an incremental product.
3) Make incremental growth (depends on the industry, but whatever your growth was last year is probably a good indicator of "incremental") no better than total product failure.
4) Demote the steady performers. Given the previous steps, people have no excuse for flat performance year on year. Current organizations fire people for one flop, but keep them around forever if they never do anything "wrong." That's backwards. A trained monkey can introduce the same product year after year, so why give them incremental raises? Demote them, and if they leave, great! They were dead weight anyway.
Uncomfortable yet? Good. Because I'm out of steps.
Sure this sounds brutal and cut-throat, but underneath there is a real optimism - the belief that anyone can innovate, at both an individual and organizational level. What it requires is flipping conventions of risk and reward.
This is a first stab and a work in progress. We'll see if it has legs. If it fails, I'll salvage what worked and move onto the next idea.
By Marc Fenigstein - August 29, 2007
The Failures of Unbridled Optimism
Designers are an enthusiastically optimistic lot. Every challenge is an opportunity, competition is either inspiration or irrelevant, and a good product can make a market where there was none. In general, this requires a huge tolerance for risk and ambiguity (and possibly a detachment from reality?), something that often doesn't jive with the emotional and organizational realities of our clients. We try to pump up their confidence and encourage new process adoption with success stories ("case studies" we try to call them, but, seriously, they're stories) about the iMac*, Toyota Prius, and BMW X5.
Sometimes that clicks, but not always.
Michael Stipe says, "Everybody Hurts, Sometimes."
Today I'm trying a new approach to coaxing that emotional shift: even great innovators fail. The media revels in this (especially when it’s Apple) so finding articles (and top 10 lists) about flops online is almost as easy as finding porn. These are usually used to berate bad management and/or stupid decisions. Sometimes, some hugs-not-drugs hippy will point out that we can learn from these failures. My slant is that failures are great! Love ‘em, embrace em, respect ‘em. No, I’m not smoking crack. Failure is part of the process and onlookers should be encouraged by these failures. Accepting greater risks means that you're successes are greater, but so are your failures. [Side note: taking this to an extreme you get the current state of movie studios or drug companies that rely on a single blockbuster to hedge dozens of flops… that is why we don’t takes things to extremes] That a company can introduce a perfectly circular mouse (“non-directional pointing device” raised no red flags at all?), and still be hugely successful should be heartening to us all.
We so often hear "Oh, we tried an innovation project [ONE!] but it fell flat" and now a whole company is gun shy about trying anything new. Then there's the Prius... remember the first one to come to the US? Exactly: a chubby-looking corolla not conspicuous enough [needs more cowbell] for today's dapper environmentalist. 
They nailed it the next time 'round with their Jetson's greenhouse [just the right amount of ugly].
The success of the BMW X5 makes it easy to forget the Z1 which ran to about 8,000 units before it was canned. BMW brushed themselves off, and the expertise developed on that technological marvel was harvested on other programs. Sure you can nitpick through the mistakes, trying to avoid repeating them, but what is really needed is to take a step back and realize that there are always new mistakes to be made (a positive thought, I promise), failing once (or a few times) isn’t the end of the world, and if you’re pushing the limits you will exceed them sometimes. Now get back on that horse.
[This was a first pass on the topic of shifting an individual’s emotional state, but within the context of business and innovation that state is often (usually?) driven by the organization. If we don’t address that, all we’ve done is gotten some poor psychologically-pliable shlub fired… which is why my next post parallels this one by playing with a new view on organization. Stay tuned.]
*[I try to avoid the iPod as a product innovation example like the plague. Firstly, because it wasn't an innovative product, just a very well-designed one. There were plenty of hard-drive-based MP3 players out. It was (when combined with iTunes) an innovative service. Now the shuffle, that was an innovative product. I use that one all the time to point out that "innovation" doesn't have to mean "premium" nor "added functionality." Second, overuse of the word “Apple” makes a lot of clients vomit spontaneously.]
