Beyond the Obvious

Preface

Today’s business world is a rapidly changing place, and new rules for success in it are quickly emerging. First and foremost among them, though, is this: Ideas are your most valuable currency, and your success will be determined by your ability to generate ones that lead to innovations your customers want. In Beyond the Obvious, my goal is to teach you how to live by that rule so that no breakthrough idea goes unexplored. Competition is fierce, and there’s simply no room for missed opportunities anymore.

Never has this been more apparent than now, as I write this preface. The last few months have been interesting times, to say the least, at HP. In August, HP’s Board of Directors announced a significant change in strategy that included (1) shutting down the webOS (formerly Palm) phone and tablet business and (2) looking into spinning off the $40 billion PC (Personal Systems Group) division. In the midst of these changes in strategy, I made the decision to retire from HP after nine years of leading the innovation team.

The timing is interesting because these changes happened months after the final draft of Beyond the Obvious was submitted and accepted by my publisher. However, as I re-read the manuscript in the context of these changes, the lessons of Beyond the Obvious hold as true as ever. This is a book about generating breakthrough innovations, and that’s exactly what my team at HP did. The book is also about negotiating both the forces inside your organization that challenge innovation efforts (e.g., obstructionist colleagues I call “corporate antibodies”) and the curve balls that come from outside it (e.g., shifts in the global economy or consumer spending). The suggestions I share in this book come from the experience I’ve gained in these very trenches myself. In the end, my experience is not that different from yours; we are all dealing with companies and industries in a state of flux and uncertainty.

No organization gets it 100 percent right. Innovation is a balance between multiple factors and priorities, as anyone who has ever taken a risk with a new idea knows.

That said, these fundamental shifts in strategy have tremendous potential for productive change. In fact, I call them “jolts” because, like earthquakes, they are unpredictable, seismic events that strike a business or industry without notice, completely altering a once-familiar landscape. I’ve experienced “jolts” several times in my career, and they’ve always felt the same: unsettling at first, and then invigorating, as they shake open opportunities for radical change, both on a personal and corporate level. Whatever happens, I know one thing: The spirit of innovation abhors a vacuum, and human ingenuity wants to flourish in all organizations. My goal in this book is to give you the skills you need to find it, foster it, and harness its power in yours.

Phil McKinney

November 2011

INTRODUCTION
Beyond the Obvious

In my career in the technology field, I’m surrounded by visual clues that clearly indicate when a tech product is headed to the gadget graveyard. Most of the time, it’s hard to ignore these clues, because they are pretty obvious. I see them in meetings with my coworkers or customers when we take our places in a conference room and pull out our smart phones, tablets, and PCs. In fact, when people have two-year-old laptops in Silicon Valley, they can be pretty sheepish about it. After all, the technology industry is built on the idea of the “refresh”—the tech term for the process of upgrading existing products to keep them feeling new and relevant. The refresh cycle is what makes someone with a perfectly functioning smart phone start to feel anxious when he hears rumors of an upgraded new version about to be released. Even if he doesn’t need the improved speed or capacity, he doesn’t want to be the person using last year’s phone in front of his competitors or clients.

You can make an argument about whether the refresh culture is good or bad, but that’s a different book. The point here is that I’m able to see the constant progression of innovation and obsolescence in the life cycles of my products played out in front of my eyes. I don’t have to wonder if the Palm Treo is still up to date; the fact that I haven’t seen one pulled out in the last few years tells me all I need to know. It’s the same feeling that a homeowner gets when he looks at the avocado bathroom he installed in the mid-’70s. You don’t need to ask if it’s out-of-date; it clearly is.

But as I looked at these outdated gadgets, I realized that they were a perfect metaphor for one of the most important questions that businesses aren’t asking, but should be: How do you know when the core beliefs of your business—those about what you do, how you do it, and for whom—have gone from innovative to obvious and are heading toward obsolescence? These beliefs don’t come with clunky features, and they don’t suffer from inelegant design—at least, not that you can readily see. What are the signs that might tell you that you are reaching a critical moment where you need to dramatically change what you do to avoid getting beaten by your competitors? How do you apply the “refresh” concept to your business to create the kind of continuous reinvention it so badly needs to survive?

All ideas, products, and concepts have a natural progression; you can at least retrospectively follow their evolution from one generation to the next. Look back at the succession of laptops and phones you’ve owned throughout your life. There’s probably a pretty obvious timeline in terms of both their physical characteristics and their technical abilities. However, it’s not always easy to recognize the need to evolve or know how to lead this evolution within your organization. It’s critical, though, to understand that the supercharged pace of change and innovation means that what was true yesterday is already on its way to being outmoded today. The real winners in the marketplace are those who can get beyond the obvious ideas about what their product is, who it is for, and how it is created; break away from the pack; and do something different. If you don’t, your competitors will—and you will be left behind.

I picked the title Beyond the Obvious because it is simple, straightforward, and cuts to the heart of a problem that many businesspeople, entrepreneurs, and would-be innovators suffer from. Simply put, we are all shaped by our past experiences, whether good or bad. We look at the end results of these experiences—“this idea worked”; “this idea failed”—and consciously or unconsciously turn these results into the rules by which we operate in the present. Sometimes these rules, or assumptions, are smart and valuable. However, the problems begin when we forget that these rules are a snapshot of an old paradigm or set of circumstances. In many cases, the world has moved on, but we are still clinging to the “obvious” ideas that were once true in the rapidly receding past. In order to progress, we need to learn to identify and ignore these “obvious” rules, ideas, or beliefs, and make room for the current conditions our companies operate in.

WHAT THIS BOOK WILL DO

The goal of Beyond the Obvious is twofold. First, I want to help you to reevaluate the “obvious,” or those old beliefs you learned in your past. These old beliefs are often so integral to your way of doing things that you are completely unaware you even have them. Yet they are setting the parameters for what you do, how you do it, and who you do it for. The only way to break free of them is to identify and analyze them to see if they still hold true. The second goal of Beyond the Obvious is to give you a structured and logical system of innovation, one that helps you identify the truly radical and valuable ideas and ignore the others.

Innovation isn’t easy; it takes a lot of work and effort to come up with a radical new idea. This is actually a good thing. It means that the ability to innovate is a universal skill rather than an act of serendipity, and furthermore rather than luck, the most important thing you need to become an innovator is an organized and methodical way to generate, prioritize, and execute great ideas. My system is called the Killer Questions, and using it will give you a road map to do this. By asking the Killer Questions, you’ll be able to create killer ideas with confidence and have faith that you’ve made the best decision about which ideas to throw your money, time, and effort into developing.

To help illustrate this process, throughout the course of Beyond the Obvious we’ll be looking at those organizations that realized that they needed to let go of their assumptions and re-ask the core questions about themselves and their industry: “Who are we? Who is our customer? What do we do? Why do we do it this way?” For example, remember when Ma Bell (also known as pre-divestiture AT&T) was split into the “Baby Bells”? One of the babies was Southwestern Bell (SBC), which served states such as Arkansas, Kansas, Missouri, Texas, and parts of Oklahoma.1 Now, what are the limitations of these areas? For the most part, you’re looking at a fixed and relatively small rural population. Sure, there is no competition, so you’re not going to be losing business, but you won’t be gaining much either. The management team at SBC, and probably at all the Baby Bells, felt they had a safe and comfortable status quo. Business conditions might not radically improve, but they weren’t going to drastically decline, either. Fast-forward to 1996, when the Telecom Act opened up the phone lines to anyone who wanted to start their own telecom business.2 These “anyones” included me. I joined a start-up called Teligent that was formed to compete against the Baby Bells. It was a perfect business opportunity. We were going after a comfortable, safe monopoly that had a tradition of doing business in a certain way. We knew that with some ingenuity and hard work we could run circles around them, and offer their customers new services that the old guys had never considered before. Up until that moment, the telecom companies could rely on one obvious fact: They had access to phone lines; very few other people did. The Telecom Act changed that overnight and was a classic Beyond the Obvious moment. All the rules and assumptions were out the window.

Back in Texas, the management team at SBC was looking nervously at companies like Teligent.3 Suddenly, the safe and comfortable status quo didn’t seem like such a stable situation after all. Since there was a limited pool of potential new customers, they realized that they had to give their customers a reason to stay with them rather than switch their business to a flashy new start-up. They realized that they might not be able to compete on price, but they could compete on convenience by bundling together services. They began offering a “Triple Play,” in which customers could get their landline, cable, and mobile all on one bill. SBC then began acquiring other Baby Bells such as Ameritech and Bell South.4 Recently, they acquired AT&T and, in a neat circularity, they’ve pretty much returned to where they started from and are now known as AT&T themselves.5 SBC got out ahead because they recognized that the old way of doing things was obsolete and that they needed to come up with a new way. I can safely make one assumption about the meetings where this new strategy was hashed out: Somebody was asking tough questions and refusing to accept that the rules about how they did business still applied to the post-1996 world.

RECOGNIZING THE OBVIOUS

Sometimes the clues that a business or organization needs to change are subtler than in the example above. You may not have a federally mandated change in your industry to contend with. It could be something closer to home, something that has long ago defaulted to the “obviously” correct way to operate. In this kind of situation, you can’t simply count on your own insight to recognize that you are relying on an old answer. You need tools to ask, “What is the obvious?”

Sometimes it can take extreme situations to push us past our natural tendency to stick with the “what works.” However, we all possess the ability to rapidly innovate when we are threatened with a serious situation; the trick is to learn how to access that energy and focus to create a continuous funnel of innovations.

Think of the NASA engineers who had to improvise a filter to clear the air of potentially lethal carbon monoxide on board Apollo 13.6 They used a piece of towel, duct tape, and other random items that were aboard the spacecraft; and it worked. I’m guessing they were both terrified at the thought of failing and exhilarated as their Rube Goldberg patch came together. And when all was done, they probably felt the most intense elation of their lives because they’d cobbled together a miracle against all the odds.

Of course, Beyond the Obvious is not simply a book about other people’s successes. Instead, it is a learning device to help you to unleash your own ability to innovate just as the executives at SBC or the engineers at NASA did. Maybe you think you’ve got this covered and you’re not the kind of person who automatically jumps to the obvious solutions when faced with a challenge. It is possible, though, that you are using answers that have served you in the past and that you believe will continue to serve you in the future.

For example, what do you think of when you read the following?:

Mary had a little ___.

These boots are made for ___.

Happy birthday to ___.

I’m guessing that as you read them you filled in the missing words: “lamb,” “walking,” and “you.” Nature abhors a vacuum—and so does your mind—so your automatic reaction is to fill in the blank. In this situation, the answers are obvious, right?

Our need to “fill in the blanks” and create order and organization is one of the building blocks of cooperative civilizations. But this same instinct is a problem if you are looking to come up with a creative idea or product, especially if you and your competitors are seeking answers for the same problem. If everyone is instinctively and unconsciously jumping to the instant and obvious idea that Mary still likes lambs, it doesn’t leave much room to explore whether she’d prefer a Ferrari if offered the option.

Those of us who went through a traditional educational experience are doing exactly what we were taught to do by answering quickly with the obvious solutions. If you were able to push beyond the obvious response and fill in missing words other than “lamb,” “walking,” and “you,” that’s a great start. In all likelihood, though, you stopped thinking once you had an answer—in the same way that you stop looking for your car keys once you’ve found them. You found what you needed, case closed, on to the next.

So, if you gave the obvious “correct” answers, you’re not alone. Every year, I selected summer interns for jobs at HP. Now, there was nothing wrong with the minds of the young men and women who competed to land a coveted position on the innovation team at HP. We knew they were the smartest and the brightest. After all, they came with impressive certificates, test scores, and letters of recommendation from their professors to prove it. Want to know the π percent of 1,337? No problem. Don’t even need a calculator, it’s 42. Curious to know the development process that went into Deutsch-Jozsa algorithm? Check. The problem is, I rarely wanted answers to either of those questions. What I was really looking for was a spark, a fearless sense of inquiry, creativity, and critical-thinking skills. An intellectual precociousness. Audacity. A belief that they—perhaps still teenagers—had the right to question assumptions and to look at the problem or opportunity in ways I hadn’t considered. And you wouldn’t believe how few of our supereducated minds possessed this ability. Most simply saw the objective as being how fast they could arrive at the answer to my question, just as if they were taking a test in school.

One part of the interview process was a completely random question. I would ask them a question to which there was no definitive answer, something un-Googleable, un-phone-a-friendable. For example, “How much gasoline is used in a day by American automobiles?” There is no single correct answer to these kinds of questions, simply because it’s impossible to gather the data accurately. And to be honest, I had no interest in the correct answer anyway. What I was curious about was how my potential interns approached the problem. Did they turn to their computers and fire up a search engine? Did they sweat anxiously over their notebooks and calculators?

What I was actually looking for was the process by which they got to their answer. How many people in the United States? Average size of a family household? How many cars per house? Average time or distance for a commute? Average MPG for a car? I was usually amazed at how few students could do this, how few students know what questions to ask to get to the answer. Frankly, I would have loved for one of these best-of-the-best students to look me in the eye and ask, “Why do you want to know?”

WHY THIS MATTERS

What’s the worst that can happen if you rely on old or obvious answers you know to be true? Consider the Deepwater Horizon explosion, a disaster that devastated both the environment and the people who rely on the clean waters and healthy bioflora for their living.

If you build thousands of floating oil platforms in the middle of a hurricane-prone body of water, it’s possible that something could go wrong. So it would make sense to have a strategy in place to deal with these possibilities. However, BP seemed to operate under the common assumption that someone who has “the answer” is smarter than the one who asks questions. As a result, they already had their answers, both to the questions of How do we prevent a catastrophic accident? and What do we do if one happens? Yet their answers were based on what had worked in the past, both for BP and the oil industry. Something went wrong, and none of the answers worked.

BP is not alone, though. History is full of people who chose to assume that their plans would unfold smoothly and were shocked to find them derailed by an unexpected problem. Imagine if BP had asked itself, What are the industry assumptions about safety and standards? What if they prove to no longer be true? I know that a blowout isn’t possible on this rig, but what if one happened anyway? What would we do? Imagine if BP had asked these questions and took an unpleasant answer—A massive, devastating blowout is possible—seriously. Would they have looked more seriously into innovative ways of containing oil? Would they have innovated better testing of the well design to prevent the blowout from even happening? It’s impossible to know, because they believed that they’d never have to face those problems. If your company faces its challenges—whether those posed by customers or competitors—in the same way, you could find yourself in a similarly devastating stage of damage control.

HOW I’M GOING TO HELP YOU

In 2005, I became the vice president and chief technology officer for Hewlett-Packard’s $40 billion (fiscal 2010) Personal Systems Group.7 The role included being responsible for long-range strategic planning, research, and development for the company’s PC product lines, including mobile devices, notebooks, desktops, and workstations. When I started in this role, I created and became the leader of the Innovation Program Office for HP.

The simplest truth is that I’m all about ideas. It’s the job of the Innovation Program Office to make sure that the ideas HP needs to stay on top of its game keep on coming. In order to do so, the team must constantly generate great ideas, figure out which ones will work, and execute the best of them. I love this. I love seeing the look in someone’s eyes when an idea comes together. It’s a rush to see a technology that would have been considered science fiction five years ago rolled out to a worldwide audience.

HP—like all of Silicon Valley—is in a constant battle to stay on top. Yes, it has the biggest market share in the PC industry today, but who knows what could happen tomorrow.8 All it takes is for a few missed opportunities by senior management, a badly thought-out product, and suddenly you’re the next Silicon Graphics—a once-brilliant company that has made the fatal mistake of assuming what was true yesterday will stay true tomorrow. Or you’re Friendster, a company that could have been a contender but completely misunderstood what its users wanted from it and withered away to make room for the company that did get it: Facebook.

One of my favorite activities is to get out there and engage with our customers. In this capacity, and also in my own personal life, I meet businesspeople from a wide range of industries—and at all levels of seniority—on a daily basis. As we talk I hear their concerns about the future of their organizations and their own careers.

Over the last decade, the concept of the “creative economy” has overtaken the older paradigm of the information-based economy. The basic idea behind the creative economy is simple: The most important skill is now no longer simply having knowledge, but demonstrating the ability to use that knowledge to come up with new and great ideas. The booming creative economy is starving for people with the energy, confidence, and ability to innovate. Knowing the old answers no longer impresses; having the ability to come up with the new answers does.

If you aren’t already moving confidently in the creative economy, you need to learn how to do so. I understand that this might not be easy. Perhaps you have the secret fear that you will get derailed in your pursuit of a great innovation, maybe betting on the wrong idea, or saying no to an opportunity that ends up being a smash. Perhaps you worry that you’ll never generate the momentum to achieve meaningful success in your professional life. Or worse, that you’ll have great ideas that you can never quite get out of the starting gate and turn into something real.

Perhaps what keeps you up at night is the thought that you have a competitor who is one step closer than you are to getting their version of your make-or-break idea out in the marketplace. You know that you need to move fast before they do, but you have doubts that are paralyzing you. The days are ticking by, yet you can’t pull the trigger because you’re simply not sure what the right move is. One day you’ll wake up to news that they’ve launched; your brilliant innovation is now perceived as the first imitator of their brilliant innovation. Even if you catch up or outperform them, you’ll always know you could have been first. Regardless of your specific fear, my goal in this book is to arm you with the same sort of tools that I use to help my team, as well as my clients, to create the solutions they need for success—and to enjoy the thrill of innovation.

THE KILLER QUESTIONS SYSTEM

Throughout the course of my career, I’ve developed a personal approach that has allowed me to find innovative ideas in areas where my competitors never thought to look and come up with products that my customers never knew they wanted. Perhaps more important, it’s given me freedom. By using this technique I’ve not only been able to generate a continuous flow of ideas for the companies I’ve worked for, but more important, I’ve had confidence that these ideas are good.

Learning the skills I’ll teach in this book is crucial; individuals who know how to phrase and ask the right questions can reveal things that others have missed. They can shift the day-to-day realities of how an organization perceives itself, the services or products it offers, and the people it hopes to sell them to. These shifts in belief and assumption are critical if you want to get—and stay—ahead. Yet there is no cultural tradition for learning how to overcome a reliance on your past experiences—those “obvious” ideas that relate more to the past than the future.

I’ve spent the past ten years writing and developing a system of generating new ideas that lead to radical innovations, and this system uses what I call the “Killer Questions.” In the coming chapters, I’ll guide you through the process of asking the Killer Questions about your business, focusing on your customers, your services or products, and how you conduct your business. I’ll also talk about one of my core beliefs—that innovation without execution is a hobby. Part of being an innovator is having the ability to get your ideas out of your head or your notebook and into the prototype, testing, and eventually the marketplace phases. This process will show you a proven way to plan and execute your best ideas.