Scott Anthony, Senior Partner @ Innosight
Main Stage
Ascent Conference 2020
[00:00:05] Well, good afternoon, everybody. It is good morning for me. I am coming to you live from Singapore, where it is one 30 in the morning and thrilled to be giving you some of the insights from my soon to be released book, Eat, Sleep, Innovate. As I was getting ready for today’s presentation, I thought about what would be a good subtitle for the material I’m going to share with you. And I started with something that I think a lot of people are talking about these days. How do we eat, sleep, innovate to the new normal? But the new normal I find kind of depressing. Even more depressing is the idea of the new abnormal. I hate that. So I borrowed a phrase from and what I’m going to talk about in the time we have together is how you can eat, sleep in a to the new better. Sounds a little better, right? Sounds a little bit more inspiring. And I’m going to do something that’s a little bit wacky as we go through this discussion. One of the reasons why I chose to do this live rather than do a recording is I just feel more energy when I feel like there are people out there watching it live. And I love to get some interactivity going as we go through the discussion. So I decided to go off piste and I’m going to use Leida, which I’m sure many of you have used a couple times during this discussion to try and get a voice from you to help me customize my material and answer any questions you have. So you can see on your screen here, hopefully there is a QR code. You can also go to the URL www.youtube.com the event code is Scott. If you go there, you’ll see something that looks like the image in the middle of the screen. If you have any questions at any point during the discussion, feel free to type in. I’ll try to get to a couple of them as we go through our time together here. And if I can’t get to them, I’ll make sure to feed answers back to the organizers and I’ll try to ask a poll question or two as we go through the discussion as well. Always dangerous to try to use technology live, but I figured we’re talking about innovation. We might as well give it a go. So let me tell you about the puzzle that led to the writing of the book, Eat, Sleep in a Bed. This is a puzzle that is formed in my head over the course of the past 15 years. You see, I’ve got four children. The first one was born in November, two thousand and five. The fourth one was born in September. Two thousand and sixteen. And as I’ve watched those children grow up, a puzzle has begun to form. You see, I don’t have to teach my children how to successfully innovate because innovation behaviors come naturally to children. Here is my daughter, my 12 year old Holly, turning thirteen in December when she was in kindergarten. She did this. The marshmallow challenge that I’m sure many of you have done. It’s a staple of design thinking programs where you’re given a range of materials, you’re given eighteen minutes. You have to build the biggest tower you can with a marshmallow on top. The research shows that Holly and her peers in kindergarten be MBA students and do almost as well as CEOs at this task because they naturally experiment, they collaborate, they try different things. A couple of years ago, Holly was in an entrepreneurial startup competition and with no help from her father, I swear she and her friend Alice had one second runner up. As I watched all of these kids around the region working on these ideas, it really struck me. These behaviors that drive innovation, success really do come naturally to children. So what are those innovative behaviors? And then what’s the puzzle that I’ve been working on? We define innovation in our book very simply. We define it as something different that creates value. Each of those words was chosen very carefully. Something is purposefully vague. Sometimes we think innovation is just about new technology. And of course, that’s a form of innovation. But there are lots of different ways to innovate and can be. New marketing approaches, new ways to communicate, new ways to organize things internally. Those all. Can we use different rather than a breakthrough? Yes, of course we need the breakthroughs. We need the hypersonic planes. We need world saving vaccines. But we also need the little things that make life that much better. And then you get to the most critical words at the end of the definition creates value. Innovation is fun. It is energizing. It is exciting. These things are all important. But the reason you are doing it is because you want to boost revenues. You want to increase profits, you want to drive employee engagement. You want to make your customers more loyal for whatever until you take the spark of creativity and turn it into the creation of value. In our eyes, you have not innovate. What does it take to do something different that creates value? It starts with being curious, questioning the status quo. Say, might there be a different and better way to do things? You’ve got to find a problem more solving because you won’t create value without it. So you have to be customer obsessed, spend enough time with customers, stakeholders, suppliers and so on to. Understands the jobs, they’re struggling to get done, the problems they’re trying to solve, collaborate, great innovators recognize the truth. The magic happens at intersections with different mindsets and skills collide together and they seek to be as many different intersections as possible. Adept in ambiguity, innovation is not a plan and act activity. It is a test and learn activity where there will be fumbles, they will be false steps and there will be failures on the path to success. Finally, innovators are in power. If you can’t do something different that creates value unless you actually go and do something. Again, I don’t have to teach my kids to follow these behaviors. Can they use help on technical skills? Of course. But these are behaviors that every human being follows almost naturally. Yet when these individuals, these kids grow up, something seems to happen, because in the 15 years I’ve watched my children grow up, I’ve also been advising organizations all around the globe. And it seems to me that almost all of them struggle with innovation. So here’s a question that I would love to ask you. Using the slide rule, I will open this question up online. The question is very simple. To what degree do you agree with this statement? One equals highly disagree. 70 equals highly agree. The question is, our organization has a culture of innovation. Again, you can get to the website by scanning the QR code. You can go to w w w dot, dot, dot com. You can enter the code ascott to get in there. I see. I have at least gotten a vote. That makes me very excited. That means there is an actual human being out there that is listening to me talk. Hopefully there are a few more human beings out there so I can get a few more voices out there and see what your perspective about this question is. I see so far the early answers that I’ve received suggests that this is something that you struggle with, just like all of the organizations that I work with around the globe. And this is something that is a very persistent finding. The innovation movement is about 30 years old. People have been thinking about innovation in a concerted way for a few decades now. There has been tons of money spent behind it. People have done everything. They set up incubators. They set up corporate venture capital arms. They’ve taken field trips to Silicon Valley back in the days when we could do things like that. They’ve gone and set up outposts in Silicon Valley. If they can’t do any of those things, they have binge watched the show Silicon Valley. And despite all of this concerted effort, you see results like the one that I’ve seen here where the people who have responded say that the average score is about four point two. We’ve got about a third of you that give this question a six. We’ve got twenty five percent of you who give it to. Let me ask one more question before I provide some of our thoughts about the root of the challenge at our answer to the struggle. The next question that I’d love to ask is a pretty simple one. If you had one word to describe the biggest barrier to innovation inside your organization, what would that one word be? One word to describe a barrier to innovation inside your organization? The people who answered the previous poll question suggested to me that like all groups that I speak with, there’s room for improvement. Nobody gave that question to seven. Nobody said, I live in an environment where those behaviors that drive innovation success are second nature, their habits, they’re things that we don’t have to think about. I’m going to leave this question up and give you a chance to go and type in your answer while I tell you a story involving my nine year old son that highlighted to me what is the real root of the problem. So this story is about my nine year old boy, Harry. The story took place in two thousand and 16 when Harry was five years old. You can see Harry’s got the shock of blond hair. He is a lovable goofball. You can always count on him to say something kind of off the wall. Harry’s his nickname in school is Happy Harry. You can see that Harry like to dress up as Captain America, but when he hated to draw himself as a superhero, he drew himself as captain created. That’s just the kind of kid that Harry is. Given this backdrop about Harry, you probably will be as surprised as we were to see a letter that we received from our condo association in Singapore describing an incident involving are happy here. Here’s the letter. As you can see, our children were found vandalizing the flooring at the malls. I play the basketball court using some materials. Good old Singapore. The action was captured in CCTV footage. This is unacceptable. Blah, blah, blah, blah, blah.
[00:10:01] Let’s pass the letter, the materials in question. That were used on the Sunday afternoon. What do you think they were? You might think they were spray paint. That would be a real problem. They were not. The kids use chalk. If you go and look at the picture here, you will see that there are four blobs on it. It was a Sunday afternoon and the kids were bored. They said, Dad, can we go down and draw a baseball diamond on the basketball court? Not only did I say that was OK, the four blobs are my three older children and me. You go on to later to see that our cleaners have managed to remove the stains on the floor, partially true and partially false, the stains were removed, but it wasn’t by the cleaners, it was from the rain. Two hundred days of thunderstorms a year in Singapore. This is not a surprising thing. The drops hit before we even left the court. By the time we got back up to our condo, that was completely gone. What lesson does Happy Harry take away from this? The lesson Harry learns is that creative expression, even benign creative expression, carries a risk of getting slapped on the wrist. He goes and takes tests in school and he learns there’s a right answer and there’s a wrong answer. He goes to large organizations and he learns there’s a way to do things in a way, not to do things. This is the reason why if I go and look at the slide of results that I can see you like just about every organization that I work with, says that one of the biggest barriers is not my zoom screen, but is the underlying culture and fear, the fear that you’re going to get something wrong, that people are going to punish you is one of the biggest barriers that makes it difficult to innovate inside established organizations. And it gets even worse as you think about that culture factor. Imagine how Beharie all grown up. He says, I am going to unleash happy herie. I’m going to become an innovation superhero that will deliver all these great results to my organization. He then comes to a sad realization. It is not individual shackles that he needs to break. It is institutional ones. Innovation is something different that creates value. Organizations are not designed to do something different. They are designed to do what they are currently doing more effectively and more efficiently. The greatest enemy that Harry has to face is his own organization because there’s a structure and strategies and processes and metrics, all of which are intertwined together to allow the organization to do what it is currently doing, all which inhibit doing something different. The enemy is institutionalized inertia that borders on an addiction to business as usual. What is the answer that if we’ve identified that there are behaviors that drive innovation success, if we’ve identified that the enemy is existing habits, what do we do? You unleash beings. This is the tool that we suggest using in the book, Eat, Sleep, Innovate. This is borrowed heavily from the habit. Change literature. If you want to drive habit change, you have to go and address two different ways that people think through making decisions. You have to address the rational way that we make decisions using behavior enablers. These are the direct ways to help people do different things. And you have to go and get to the unconscious where we make decisions without even thinking about them using artifacts and nudges the behavior enablers or things like rituals and checklists and being coaching to help people make change. The artifacts and nudges, the invisible guides, the pictures on the wall that remind you to do things without you thinking about it. The leaderboard where you’re so low, where you’re motivated to go and do something different so that you can go off that leaderboard. Now, in the book, we have one hundred and one different teams that we’ve collated from our field work, our own experience driving change at our own organization. I thought I would share three beans with you, then paused to see if there are any questions, then provide some specific tips for how you can innovate to the new better. Let’s first talk about the three beans highlighted here meeting mojo. This is a being used by DBS Bank, the largest bank in Southeast Asia. When I moved to Singapore ten years ago, DBS had the lowest customer satisfaction scores in Singapore. Today, it is globally recognized as an innovation powerhouse. How did that happen? At least one change the DBS is fundamentally change the way that it runs meetings to make them more collaborative, to enable it to be more agile. Meetings used to start late and later without clear outcomes. So DBS introduced meeting MOJA, the most stands for the meeting owner. This is the person who calls the meeting to order to make sure it starts on time. It ends on time and there are clear outcomes. The Joe is the joyful observer appointed by them up. The job gives public feedback to the MO at the end of the meeting. If the Josiah’s people are digitally distracted, the joke can stop the meeting and make sure that people are focused. At the end of the meeting, everybody gives feedback on an app, but the MO and Joe get so they can improve their performance in the future before DBS introduce this being. Forty percent of meetings were collaborative. Today the number is 90 percent. DBS has saved a half million employee hours of meetings have also gotten more efficient. The other thing that you need to do is make it easier for people to cope with failure. One way to do that is to have a ritual like Atlassian, the Australian software company does called a premortem. A postmortem is after something fails, after a patient dies in a hospital where you try to understand what went wrong. A pre mortem is something you do before you launch anything. You imagine what could be the things that would cause you to fail. This ritual does two things. Number one, it helps you identify assumptions you didn’t realize you were making no kill. This helps you be conditioned to understand that failure is indeed an option when you’re working on innovation. If you do fail and you fail in an intelligent way, you can do with the Finnish gaming company Super Cell does and say cheers to failure. This is a team getting together to celebrate the fact that iGaming effort fail. You notice they’re all drinking champagne. This does two things. This tells everyone this is a good, not bad outcome. We need to continue to push envelopes and it lets everybody know that the effort is done so that they can go and focus on other efforts rather than having energy dissipated into what might become a zombie project. All right. We’ve got about eight minutes left before I wrap up, but I want to pause here to see if there are any questions that have come in over the transom. I don’t see anything here right now. If you do have any questions, please type in. If I don’t get to them during the discussion here, I’ll leave this window open and see if anything flicks to my attention here. But if I don’t see anything come in, I’ll just go straight through. If I do see something come in, I’ll try to weave an answer and if I don’t have time to get it, I’ll answer it after the session is done. All right. So let’s then talk about five specific tips for how you can innovate to the new better. First see second quarter silver lining innovation opportunities. The research is very clear. Any time there is a big event like a pandemic, a big recession and so on, there are always opportunities to innovate and grow. The smart innovators see what’s behind the big event and what second order effects will there be. There’s two ways you can think about this. First, how are priorities being rearranged in the midst of a big event? People today are a lot more concerned about cleanliness and hygiene. There are big opportunities there. Second, in a moment like this, where have we been forced to experiment with something that we’ve learned is far worse than what exists? As an example, when the schools reopened in Singapore back in June are for kids, as much as we appreciated all the great work to do, virtual learning were first in line to go back to school. Physical schools are better than virtual schools. The weeks, months, quarters and even years ahead are going to involve a lot more hybrid opportunities. There are huge opportunities for innovators to go and seize them in the global financial crisis. One hundred unicorns were born. The same thing is going to happen now. Second, make the positives of the pandemic permanent. There are real opportunities to do this. A lot of bad things have happened, but good things have happened as well. As an example, I was running a session a couple of months ago for an organization in Singapore. Their top leadership team was there, their board was their investors were their government stakeholders were there and young up and coming talent was there. I’ll tell you the way this would normally work if we were alive, there would be a table of VIPs. The young talent would sit in the side and they wouldn’t say, we’re done over zoom. Everyone square is the same size. It was a vibrant Democratic discussion where we had real contrasting opinions and made huge progress in a short period of time. You don’t want to lose this as you begin to move back to hybrid or more normal ways of working beans are a powerful tool to lock in these forms of gains, build the capacity to be permanently adaptable. One way you can do that, make sure your organization can cope with what Professor Amy Edmondson, who brought the idea of psychological safety to the world that brought there to make sure that you can cope with what she calls intelligent failure. Not all failure is good. You do stupid things, you should be punished. But if you fail in an intelligent way because you’ve identified an interesting opportunity, you’ve codified your assumption, you’ve got a good plan to test. Those tests are focused and affordable. You’ve bounded your risk and you’ve learned something interesting. You should celebrate just like Super does with its cheers to failure ritual. There’s a lot more to do to have permanent adaptability in your organization. But intelligence failure, recognizing and celebrating it, making sure it’s something that’s normal in your organization is a cornerstone capability. Embrace what Jim Collins calls the Stockdale paradox. The idea is you accept the brutal reality of today and you also believe in a better tomorrow. This is Helen Eden, the CEO of the Settlement Music School Settlement. Historically offered six offered music classes I’m sorry, through six physical branches in the Philadelphia area. It’s been around for more than one hundred years. You could imagine when the world locks down that Helen would be depressed, she would be despondent. She wants it instead. She was excited. She said, I’ve always wanted to open the seventh branch, a fully digital one. And now I finally have the opportunity. This is the way she described it to me in the face of a pandemic. Why should we care about community art? Because it is what lifts our soul, the act of doing, practicing and reaching goals that gets us through this time with our spirits intact. Finally, behind all of this, you have to believe in yourself and your people. I’m so thrilled that Ed Catmull, the co-founder of Pixar, endorsed our book Eat, Sleep, Innovate, and his words really ring true to me. If you want to unleash more creativity, you can’t tell people what you want. You need to create a culture that emboldens them and you need to trust that this is what they want to do. These are my four children I have this is my last image to tell you about, a belief I have that is turned into a conviction. The world’s greatest untapped source of energy is not in the wind. It’s not in the water. It’s not in the sun. It’s inside our established organizations that are filled with people that once were curious. Charly’s hopefull Holli’s happy Herries and thoughtful. Today’s my goal as a parent is to make sure these children never lose their love of learning. My mission as an advisor to organizations around the world is to help them harness and amplify the latest innovation energy that lies within. These are the people in your organization. I hope what we talked about today will help you to unleash that potential and innovate to the new better. Thank you very much and best wishes in your efforts to innovate and grow.