Peter Fisk

Teamwork is key to how most organisations get things done. Teams are where innovative ideas are conceived and tested, and where employees experience most of their work. But it’s also where the biggest problems can arise in limiting the effectiveness of organisations.

Google recently set about investigating what makes a great team, in what they called Project Aristotle – a tribute to Aristotle’s quote, “the whole is greater than the sum of its parts” (as the Google researchers believed employees can do more working together than alone) – the goal was to answer the question: “What makes a team effective at Google?”

This on Google’s Project Oxygen research where they studied what makes a great manager, Google researchers applied a similar method to discover the secrets of effective teams at Google.

Read: New York Times article

Here is an extract from Google’s project findings:

What makes a team?

The first step in answering this question of “what makes an effective team?” is to ask “what is a team?” More than an existential thought exercise, actually figuring out the memberships, relationships, and responsibilities of individuals all working together is tough but critical to cracking team effectiveness.

The term team can take on a wide array of meanings. Many definitions and frameworks exist, depending on task interdependence, organizational status, and team tenure. At the most fundamental level, the researchers sought to distinguish a “work group” from a “team:”

• Work groups are characterized by the least amount of interdependence. They are based on organizational or managerial hierarchy. Work groups may meet periodically to hear and share information.
• Teams are highly interdependent – they plan work, solve problems, make decisions, and review progress in service of a specific project. Team members need one another to get work done.

Organizational charts only tell part of the story, so the Google research team focused on groups with truly interdependent working relationships, as determined by the teams themselves. The teams studied in Project Aristotle ranged from three to fifty individuals (with a median of nine members).

What creates team effectiveness?

Once they understood what constituted a team at Google, the researchers had to determine how to quantitatively measure effectiveness. They looked at lines of code written, bugs fixed, customer satisfaction, and more. But Google’s leaders, who had initially pushed for objective effectiveness measures, realized that every suggested measure could be inherently flawed – more lines of code aren’t necessarily a good thing and more bugs fixed means more bugs were initially created.

Instead, the team decided to use a combination of qualitative assessments and quantitative measures. For qualitative assessments, the researchers captured input from three different perspectives – executives, team leads, and team members. While they all were asked to rate teams on similar scales, when asked to explain their ratings, their answers showed that each was focused on different aspects when assessing team effectiveness.

Executives were most concerned with results (e.g., sales numbers or product launches), but team members said that team culture was the most important measure of team effectiveness. Fittingly, the team lead’s concept of effectiveness spanned both the big picture and the individuals’ concerns saying that ownership, vision, and goals were the most important measures.

So the researchers measured team effectiveness in four different ways:

1. Executive evaluation of the team
2. Team leader evaluation of the team
3. Team member evaluation of the team
4. Sales performance against quarterly quota

The qualitative evaluations helped capture a nuanced look at results and culture, but had inherent subjectivity. On the other hand, the quantitative metrics provided concrete team measures, but lacked situational considerations. These four measures in combination, however, allowed researchers to home in on the comprehensive definition of team effectiveness.

How to measure effectiveness?

Using input from executives across the globe, the research team identified 180 teams to study (115 project teams in engineering and 65 pods in sales) which included a mix of high- and low-performing teams. The study tested how both team composition (e.g., personality traits, sales skills, demographics on the team) and team dynamics (e.g., what it was like to work with teammates) impact team effectiveness. Ideas were pulled from existing research as well as Google’s own experience with what makes an effective team.

They conducted hundreds of double-blind interviews with leaders to get a sense of what they thought drove team effectiveness. The researchers then looked at existing survey data, including over 250 items from the annual employee engagement survey and gDNA, Google’s longitudinal study on work and life, to see what variables might be related to effectiveness. Here are some sample items used in the study that participants were asked to agree or disagree with:

• Group dynamics: I feel safe expressing divergent opinions to the team.
• Skill sets: I am good at navigating roadblocks and barriers.
• Personality traits: I see myself as someone who is a reliable worker (informed by the Big Five personality assessment).
• Emotional intelligence: I am not interested in other people’s problems (informed by the Toronto Empathy Questionnaire).

Demographic variables like tenure, level, and location were also collected.

What are the dynamics of effective teams?

With all of this data, the team ran statistical models to understand which of the many inputs collected actually impacted team effectiveness. Using over 35 different statistical models on hundreds of variables, they sought to identify factors that:

• impacted multiple outcome metrics, both qualitative and quantitative
• surfaced for different kinds of teams across the organization
• showed consistent, robust statistical significance

The researchers found that what really mattered was less about who is on the team, and more about how the team worked together. In order of importance:

• Psychological safety: Psychological safety refers to an individual’s perception of the consequences of taking an interpersonal risk or a belief that a team is safe for risk taking in the face of being seen as ignorant, incompetent, negative, or disruptive. In a team with high psychological safety, teammates feel safe to take risks around their team members. They feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question, or offering a new idea.
• Dependability: On dependable teams, members reliably complete quality work on time (vs the opposite – shirking responsibilities).
• Structure and clarity: An individual’s understanding of job expectations, the process for fulfilling these expectations, and the consequences of one’s performance are important for team effectiveness. Goals can be set at the individual or group level, and must be specific, challenging, and attainable. Google often uses Objectives and Key Results (OKRs) to help set and communicate short and long term goals.
• Meaning: Finding a sense of purpose in either the work itself or the output is important for team effectiveness. The meaning of work is personal and can vary: financial security, supporting family, helping the team succeed, or self-expression for each individual, for example.
• Impact: The results of one’s work, the subjective judgement that your work is making a difference, is important for teams. Seeing that one’s work is contributing to the organization’s goals can help reveal impact.

Building psychological safety in the organisation

Organizational behavioural scientist Amy Edmondson of Harvard first introduced the construct of “team psychological safety” and defined it as “a shared belief held by members of a team that the team is safe for interpersonal risk taking.” Taking a risk around your team members may sound simple. But asking a basic question like “what’s the goal of this project?” may make you sound like you’re out of the loop. It might feel easier to continue without getting clarification in order to avoid being perceived as ignorant.

To measure a team’s level of psychological safety, Edmondson asked team members how strongly they agreed or disagreed with these statements:

1. If you make a mistake on this team, it is often held against you.
2. Members of this team are able to bring up problems and tough issues.
3. People on this team sometimes reject others for being different.
4. It is safe to take a risk on this team.
5. It is difficult to ask other members of this team for help.
6. No one on this team would deliberately act in a way that undermines my efforts.
7. Working with members of this team, my unique skills and talents are valued and utilized.

In her TEDx talk, Edmondson offers three simple things individuals can do to foster team psychological safety:

1. Frame the work as a learning problem, not an execution problem.
2. Acknowledge your own fallibility.
3. Model curiosity and ask lots of questions.

 

Blockchain technology has now been around for over a decade, with Satoshi Nakamoto’s whitepaper that started it all having celebrated its tenth anniversary on October 31 2018.

There have been numerous twists in the tale during this time, with much hype around its potential, particularly associated with overhyped crytocurrencies like Bitcoin.

Blockchain is the digital ledger that enables applications like Bitcoin to work. It tracks and validates every transaction. Blockchain technology has enormous potential automate every type of online transaction that requires a degree of trust. From tracking the provenance of food, to proving the authenticity of diamonds, bring together patient data in healthcare systems to enabling people to do business with each other.

Whilst the technology explanations may be a little intimidating, the applications are immense.

Blockchain technology can be used to launch companies that are entirely run by algorithms, make self-driving cars safer, help people manage and protect their online identities, and track the billions of devices on the Internet of Things.

Eileen Fisher is a womenswear clothing brand that focuses on simple dressing through timeless designs and sustainable practices.

Amy Hall is Eileen Fisher’s Director of Social Consciousness. She sits at a desk with an amazing view, overlooking the Hudson River, but she spends a lot of her time in what she calls “the grey zone.” It’s a place between yes and no, between good and bad. A place that shouldn’t have Uzbek cotton, but might possibly.

Recently she received a letter from a nonprofit asking if we use cotton from Uzbekistan, where child and forced labor is common and where the Aral Sea is being drained to irrigate cotton fields.

“We think the answer is no,” says Amy. “We have a policy against using Uzbek cotton. But can we be absolutely certain that a bale hasn’t been mixed in by some middleman in our supply chain? Verification of fiber sourcing is extremely tricky.”

Back in 1997, when sweatshops were in the headlines and labour standards such as SA8000 were just being written, Amy took on the task of shaping Eileen Fisher’s “Social Consciousness” department. She chose the word “consciousness” to reflect a desire to raise awareness about these three values:

• Practicing business responsibly with absolute regard for human rights.
• Guiding our product and practice toward sustaining our environment.
• Supporting women to be full participants in society.

Over the years, the Social Consciousness team has grown in size and scope, integrating its work into the warp and weft of the company. Today Social Consciousness extends across the company, from marketing to manufacturing, from design to finance.

Human rights are key, with a program to provide people with dignified work that will enhance their livelihood, empowering them socially and economically. “We want to ensure that workers have a voice and are treated fairly in the workplace,” says Luna Lee, Human Rights Leader. We start by choosing manufacturing partners who agree to follow our labor standards and follow up by conducting audits. We also empower workers by offering training sessions that help them understand their rights.”

Other social and environmental themes are equally important. “Our environmental vision is holistic,” says Shona Quinn, Sustainability Leader. “We believe in paying attention to what happens in the field, the dyehouse and our customers’ washing machines. Our goal is to design out negative impacts—and design in positive change.”

https://www.youtube.com/watch?v=OO0-Fsh_35c

Eileen Fisher’s Vision 2020

• Fibres: We pledge to use the most sustainable fibres we can lay our hands on. All our cotton and linen will be organic by 2020. And our core merinos will get an ethical makeover: We’ll use wool from sheep that are responsibly raised—on land that is managed with deep concern for the environment. We’re determined to wean ourselves off rayon—Tencel Lyocell has much better chemistry. And we’re taking a new look at polyester. If it’s recycled, we’re in.
• Colour: At most dyehouses, hazardous chemicals go into your clothes—and out with the wastewater for treatment. What if we didn’t use toxins in the first place? Since 2009, we’ve been working with Bluesign  technologies to shift our global dyehouses toward responsible chemical, water and energy usage. We’re making progress: By 2020, roughly 40% of our product will be either Bluesign certified or using exclusively Bluesign-approved chemicals. But frankly that’s not good enough. We are continuing to reach out to other brands and work together to create demand for responsible dyes. It’s our bid for collaboration as the new industry norm.  
• Resources: By 2050, the global economy is projected to consume three planets’ worth of resources annually. To change that trajectory, we’re committing to less. Leaving less fabric waste on the cutting room floor. Using less water, emitting less carbon. We’re investing in alternative energy and cutting our reliance on air shipping. By 2020, our US retail and office spaces won’t just be climate neutral. They’ll be climate positive.
• People: Our clothes are not made by machine alone. They require the deft hands of thousands of workers, whom we value for their part in our brand. For more than 15 years, we’ve trained workers at our key suppliers in China to voice their rights. Since 2005, we’ve invested in an alternative supply chain in Peru that pays fair trade wages. In India, we’ve launched The Handloom Project, a six-year investment program designed to empower weavers in rural communities. And we’ve joined the Better Buying program to more fully understand how our purchasing practices impact our suppliers. These are some examples of how we’re committed to improving the livelihoods of the workers in our supply chain.
• Mapping: It’s no small feat to map a global supply chain, but it’s a matter of integrity. We need to verify how every last fiber is grown and every last garment is dyed. We need to know that every factory, spinner and mill is following strict labor standards. When we began this project in 2014, we didn’t think that would be too hard. After all, we’ve visited a lot of organic cotton fields and talked with workers at countless factories. But going deeper means getting our suppliers to reveal their suppliers. That takes trust. And time.
• Resue: At the end of the day, we make stuff. Where it ends up is our responsibility. We start by designing our clothes to last, so they’ll stay in your closet longer. And when you’re done with them we take them back to resell. To date, over one million garments have been collected and sorted. As for the pieces we can’t sell? They’re tomorrow’s raw material, to be reborn as new textiles or refashioned as new clothes. It may take longer than 5 years, but we imagine a future in which waste is a thing of the past.

On this last point, “Renew” is a great initiative from Eileen Fisher.

“We believe in clothes that stand the test of time. But nothing, not even your favorite sweater, lasts forever. That’s why we’ve created Renew, a take-back and reuse program that preserves the value of our clothes at every stage, in any condition. It’s part of our commitment to being circular by design.

Here’s how it works: you bring back your old Eileen Fisher clothes, and we find them another home. When your clothes can no longer be worn, we remake them into one-of-a-kind designs—and we save the scraps, because they’re tomorrow’s raw materials.

By taking responsibility for the lifecycle of our clothes, we’re patching up the holes in a flawed apparel industry and setting a new standard for sustainability. But we can’t do it alone. Every time you choose to bring your clothes back or shop Renew, you’re helping us design a future without waste.”

More on sustainable fashion

Stella McCartney was one of the first designers in the fashion business to embrace a sustainable attitude in her business model – from the production to the final collections. “I design clothes that are meant to last. I believe in creating pieces that are not going to get burnt, that are not going to landfills and that are not going to damage the environment. For every piece in every collection, I am always asking what have we done to make this garment more sustainable and what else can we do.”

Reformation founder and CEO Yael Aflalo shares how a ‘depressing’ trip to China sparked her company idea – and shares what other companies can learn from her journey. “We put sustainability at the core of everything we do. We invest in green building infrastructure to minimize our waste, water, and energy footprints. By providing on-the-job training and opportunities for growth, we also invest in the people who make this revolution possible.”

Patagonia, the outdoor clothing brand with an environmental focus, was founded in 1973 by Yvon Chouinard, who since 1964 had been manufacturing pitons (metal anchors used in rock climbing) that would not damage the rock. While insisting on offering the best quality, the brand has contributed toa sustainable society and natural environment by developing eco-friendly materials and returning 1% of its sales backto society. Patagonia has redefined the role of a company and it continues to inspire the outdoor industry and the world.

https://www.youtube.com/watch?v=yA9wmg8vrWg

Everlane has gone further than most to bring transparency to the fashion world, highlighting the real costs of making clothing. “At Everlane, we want the right choice to be as easy as putting on a great T-shirt. That’s why we partner with the best, ethical factories around the world. Source only the finest materials. And share those stories with you—down to the true cost of every product we make. It’s a new way of doing things. We call it Radical Transparency.”

Positive Luxury’s mission is to inspire people to buy better and influence brands to do better. We award the Butterfly Mark to luxury brands that are committed to sustainability, helping consumers shop with confidence. Created by Diana Verde Nieto, it is a platform driving positive change in the luxury business, and a curation of the most positive brands for consumers. The Butterfly Mark is an interactive trust mark that identifies the brands in the Positive Luxury community of #brandstotrust. It offers brand transparency at the point-of-sale in a consumer-friendly way.

“The Next Black” is a documentary film that explores the future of clothing. Watch as we meet with some of the most innovative companies on the planet to get their opinion on clothing and its future, including: heroes of sustainability, Patagonia; tech-clothing giants, Studio XO; sportswear icon, adidas; and Biocouture, a consultancy exploring living organisms to grow clothing and accessories.

 

The old idea of marketing was that you develop a product, you launch, and promote it to mass markets with mass advertising. And hope the sales will come.

The problem, of course, is that markets are much more complex. They are noisy and competitive, so brands need context and relevance. And consumers are definitely not average, but rather individuals with a diversity of situations, needs and aspirations.

Digital technologies, and the huge amount of realtime data which they enable, have transformed markets and the way we market.

Today’s marketing starts with the consumer. Having one to one conversations at scale. Influenced by friends and communities. In context, in realtime. Powered by the mobile phone, facilitated by social media, competing for attention and relevance.

When Tom Cruise worked into The Gap and was greeted by a a hologram, we thought this was science fiction. The Minority Report movie from 2002 was set in the year 2054.

But Nestle’s Digital Acceleration Team is a great example of how 2054 is already becoming a reality.

DAT is a project that has evolved over the last 8 years from a social media dashboard, to a fully-function global brand control room, from which marketing programs are managed interactively.

The old notion of mass-market, blanket-coverage, hope-for-the-best “campaigns” are replaced by constant monitoring of brand chatter across all types of platforms – from Instagram and Facebook to physical media, Google searches, and TV channels.

From the chatter emerges patterns of behaviour – who is buying what, where, when, how – overlay the current promotional activity, overlay current sports or music events, overlay weather and temperatures, overlay stock and retail footprints.

Marketers quickly learn what is working and what is not, how to take the best ideas from one place and apply elsewhere, how to respond to events, how to move stock, how to price dynamically, how to engage with audiences directly, and individuals personally.

This is just one example of brands reimagining how they connect with consumers. The point is not the data itself, but firstly how consumers are changing – who they trust, how they are influenced, where they buy, and why. And how brands are changing.

It’s also about how businesses can innovate – services beyond products, direct to consumer channels, consumer-driven conversation, building richer experiences, engaging with communities, context partners such as sport, entertainment, locality.

And ultimately how sales and marketing is reinvented in a consumer-driven, personal-knowing, value-enabling, relationship-building way. Data is then the fuel to enable this new vision for business models, marketing approaches, and brand experiences.

A new generation of brands and retail platforms are enabling this transformation in even more imaginative ways – take Glossier, the world’s fast growing beauty brand with a C2C ethos, or Pinduoduo, fusing social media with gamification, retail and entertainment.

Walk through the streets of Medellin and your phone navigates you to stores, with personalised offers, maybe already part of your brand subscription. Pick up your L’Oreal magic mirror, and cosmetics are custom-made to match your complexion and dreams.

Brands become participative, immersed within their consumers’ lives. Music is downloaded in a gym, not in a sterile vacuum with perfect wifi and rational choice, or on a gaming platform like Fortnite.

Too many brands are still slaves to their advertising, or even their agencies. Creativity is focused on the message rather than the medium, the product not the experience. Time for marketers to accelerate the future, and bring Tom Cruise’s vision to life.

I recently came across a great article Hacking into your Happy Chemicals by Thai Nguyen on his inspirational blog The Utopian Life. Now based in Florida USA, and studying for a doctorate in law, Thai also writes for the likes of Huff Post and Entrepreneur magazine. I enjoyed his article so much, I wanted to share the best bits with you too, (thanks Thai). But before we explore the happy chemicals, Thai’s own story, as featured in The Asian Entrepreneur, is pretty inspiring too:

Utopian Life

Born in Vietnam, Thai Nguyen’s family fled the country after the war to a refugee camp in Indonesia. They made it to Australia where he grew up. Like many entrepreneurs, Thai struggled to fit into the mould and figure out what he wanted to do with life. As soon as he finished high-school, Thai spent a year travelling and playing Rugby for Nova Scotia, Canada, and also working in a bakery in San Francisco.

When Thai returned to Australia, he completed an apprenticeship as a Chef for the Hilton Hotel, later owning a small cafe with his parents. At the same time, Thai was training in Muay Thai (kickboxing), and after a couple of amateur fights in Australia, he had the opportunity to move to Thailand with one of Australia’s best fighters and pursue a professional career.

While in Thailand Thai met a professor from Texas and he invited him to complete a BA degree as his school. Thai then moved over to the States and completed my Bachelor of Humanities degree there. During that time, he went through what he calls an “early mid-life crises.”

For some strange reason, Thai began to think deeply about death—asking himself the question, “If I were to die today, would I be happy with what I was doing in life?” The answer was “No.” The reason being deep down inside, Thai always dreamt of being his own boss, to take something he was passionate about and build a lifestyle around that. Thai got himself a Macbook, a backpack, and moved to Cusco, Peru—living his dream of being a location-independent writer/entrepreneur.

Happy Chemicals

“Dopamine, Serotonin, Oxytocin, and Endorphins are the quartet of chemicals responsible for your happiness. Many situations can trigger these neurotransmitters, but instead of being in the passenger seat, there are ways you can intentionally cause them to flow.

Being in a positive state has significant impact on your motivation, productivity, and wellbeing. Here are some simple ways to hack into your positive neurochemicals:

Dopamine

Dopamine motivates you to take action toward your goals and gives you a surge of reinforcing pleasure when achieving them. Procrastination, self-doubt, and lack of enthusiasm are linked with low levels of dopamine. Studies on rats showed those with low levels of dopamine always opted for an easier option, and less reward/food; those with higher levels of dopamine exerted the effort needed to receive double the amount of food.

Break big goals down into little pieces. Rather than only allowing your brain to celebrate when you’ve hit the big finish line, you can create a series of little finish-lines for frequent dopamine release. And it’s crucial to actually celebrate—buy a bottle of wine, or head to your favorite restaurant whenever you meet a small goal.

And avoid the dopamine hangover — when you slump after a massive high. Create new goals before achieving your current one. That ensures a consistent pattern for experiencing dopamine. As an employer and leader, recognize the accomplishments of your team. Sending your team an encouraging email or giving a small bonus is a “dopamine-hit” that will increase future motivation and productivity.

Serotonin

Serotonin flows when you feel significant or important. Loneliness and depression are present when serotonin is absent. It’s why people fall into gangs and criminal activity—the culture and ‘community’ facilitate serotonin release. Unhealthy attention-seeking behaviors are also a cry for what serotonin provides. Princeton neuroscientist Barry Jacobs explains that most antidepressants focus on the production of serotonin.

Reflecting on your past achievements allows your brain to re-live the experience. Your brain has trouble telling the difference between what is real and what is imagined, so it produces serotonin in both cases. Gratitude practices are popular for this reason, they are reminders and mental pictures of all the good things you’ve experienced. If you need a serotonin boost during a stressful day, take a few moments to reflect on your past achievements and victories.

Another way to boost your serotonin levels is to have lunch or coffee outside and expose yourself to the sun for twenty minutes; your skin absorbs UV rays which promotes Vitamin-D and serotonin production. Although too much ultraviolet light isn’t good, some daily exposure is healthy for boosting your serotonin levels.

Oxytocin

The release of oxytocin creates intimacy, trust, and strengthens relationships. It’s released by men and women during orgasm, and by mothers during childbirth and breastfeeding. Animals will reject their offspring when the release of oxytocin is blocked. Oxytocin increases fidelity; men in monogamous relationships who were given a boost of oxytocin interacted with single women at a greater physical distance than men who weren’t given any oxytocin. Oxytocin is the glue that binds together healthy relationships.

Often referred to as “the cuddle hormone,” a simple way to keep oxytocin flowing is to give someone a hug. Dr. Paul Zak explains that inter-personal touch not only raises oxytocin, but reduces cardiovascular stress and improves the immune system. Rather than just a hand-shake, go in for the hug. Dr. Zak recommends eight hugs each day.

Giving someone a gift, will also cause their oxytocin levels rise. You can strengthen work and personal relationships through a simple birthday or anniversary gift.

Endorphins

Endorphins are released in response to pain and stress, and helps to alleviate anxiety. The surging “second wind” and euphoric “runners high” when running are a result of endorphins. Similar to morphine, it acts as an analgesic and sedative, diminishing your perception of pain.

Along with exercise, laughter is one of the easiest ways to induce endorphin release. Even the anticipation and expectation of laugher e.g. attending a comedy show, increases levels of endorphins. Taking your sense of humor to work, forwarding that funny email, and finding several things to laugh at during the day is a great way to keep your endorphins flowing.

Aromatherapies: the smell of vanilla and lavender has been linked with the production of endorphins. Studies have shown that dark chocolate and spicy foods will cause your brain to release endorphins. Keep some scented oils and dark chocolate at your desk for a quick endorphin boost.”

In recent years the notion of innovation ecosystems has largely become commonplace. This can be explained in particular by the rapid emergence of the notion of open innovation. Large companies want to interact with startups and vice versa. “Innovation Labs” are flourishing in many companies and leading to the development of collaborative links with external innovation players, including startup incubators, or directly with them.

We also see the emerging concept of “excubators”: large companies are starting to outsource entrepreneurship projects in environments that are considered more open and more agile. Proof of this enthusiasm: a new function appears even in some companies, that of IEO (Innovation Ecosystem Officer).

Let’s rewind back to the basics of innovation networks to understand the intrinsic characteristics of an ecosystem. This term was coined by Tansley in 1935 to designate the basic ecological unit of the environment and the organisms that live there. The term was later taken up by Moore (1993) to designate systems of actors with coopetition relationships (which we could call “Ecosystems 2.0”). This notion assumed that business clusters could optimize the flow of talent and knowledge if they shared geographic proximity.

An example of such a system are Technology Parks such as Sophia Antipolis in France or the Research Triangle Park in North Carolina. The biology metaphor was useful to designate these networks, in spite of some limits. Pushing the metaphor would allow for more organic, extra-territorial collaborations enabled by virtual, online learning networks (what might be called Innovation Ecosystems 3.0).

XPLANE, the San Francisco-based visual design company, taught to map out all the different aspects of a corporate innovation ecosystem in one big map, which certainly makes good reading:

Thinking of this in terms of phases of development, they linked up with Innovation Leader to consider how to move forwards from a limited to structured to scaled and integrated approach to innovation across the corporation.

Tendayi Viki, a friend of mine who is based at the University of Kent, and was this year added to the Thinkers50 Radar, wrote in his recent book The Corporate Startup that every company has to be a balanced mix of established products and new products that are searching for profitable business models.

The innovation ecosystem and the products within it have to be managed appropriately depending on where they are on their innovation journey (i.e. searching vs. executing).

Viki goes on in his book to consider some of the many components of an integrated approach to innovation within a corporate.

Innovation Thesis

Innovation should not be conducted as a guerilla movement, hidden and protected from the main business. It must be part of and aligned with the overall strategic goals of the organization. This is important when it comes to later transitioning innovation projects into the core product portfolio.

Just like venture capitalist investors have investment theses, every large company must have an innovation thesis. An innovation thesis clearly sets out a company’s view of the future and the strategic objectives of innovation. A thesis also sets the boundaries or guard rails for which innovation projects the company will or will not consider investing in. In addition to deliberate strategy, the company must also use its innovation process as a source of emergent strategy that is responsive to changes in the market.

Just like venture capitalist investors have investment theses, every large company must have an innovation thesis. An innovation thesis clearly sets out a company’s view of the future and the strategic objectives of innovation. A thesis also sets the boundaries or guard rails for which innovation projects the company will or will not consider investing in. In addition to deliberate strategy, the company must also use its innovation process as a source of emergent strategy that is responsive to changes in the market.

Innovation Portfolio

To achieve its innovation thesis and strategic goals, an established company should set itself up as a portfolio of products and services. This portfolio should contain products that cover the whole spectrum of innovation; i.e. core, adjacent and transformational. A portfolio should have early stage products, as well as mature and established products. A company may also consider having in its portfolio disruptive products that are aimed at the lower-end or emerging markets.

The goal is to have a balanced portfolio in which the company is managing various business models that are at different stages of their life. The balance of the product portfolio should be an expression of the company’s overall strategy and innovation thesis.

Innovation Framework

In order to execute on its thesis and manage its portfolio of products and services, the company needs a framework for managing the journey from searching to execution. There are several great innovation frameworks out there; for example Ash Maurya’s Running Lean framework and Steve Blank’s Investment Readiness model. All these frameworks can be synthesized into the three simple steps for innovation; creating ideas, testing ideas and scaling ideas.

Every now and again, a company may decide to refresh the business models of it existing products through renewing ideas. Having an innovation framework provides a unifying language for the business. Everybody knows what phase each product or business model is in. This then provides the basis of how a company can manage its investment decisions and product development practices.

Innovation Accounting

With an innovation framework in place, the company now needs to make sure they are using the right investment practices and metrics to measure success. Traditional accounting methods are great for managing core products.

However, when managing innovation a different set of tools are needed. We propose that companies should use incremental investing based on the innovation stage of their products. This philosophy is based on Dave McClure’s Moneyball for Startups.

We also propose three sets of innovation KPIs that companies should be tracking. Reporting KPIs are designed to track the activity and work being done on new ventures as they move from idea through to scale (e.g. validation velocity). Governance KPIs help paint a better picture for the company as to whether or not to continue investing in particular ideas (e.g. how close are the teams to finding product-market fit). Global KPIs examine the overall performance of innovation within the context of the larger business (e.g. percent of revenue in the last 3 years).

Innovation Practice

In addition to managing investments in innovation the right way, the way product teams develop products has to be aligned to the innovation framework. Pearson’s Lean Product Lifecycle is accompanied by great playbook that provides guidance to product teams as to the right behaviors to engage in during searching versus executing. Adobe’s Kickbox provides similar guidance, tools and resources. The core principle for innovation practice is simply that no product can be taken to scale until it has a validated business model.

As such, during the search phase the job of innovators is to validated their value hypotheses (i.e. does our product meet customer needs) and their growth hypotheses (i.e. how will we grow revenues and customer numbers). This process requires that teams validate both the attractiveness of the product to customers and the potential profitability of the business model. This is product-market fit and our definition of lean innovation.

These five principles combine to help create an innovation ecosystem.

The first two principles (i.e. thesis and portfolio) focus on innovation strategy, the next two principles (i.e. framework and accounting) focus on innovation management and the last principle is where rubber meets the road and the company begins interacting with customers and validating business models. Most innovation labs tend to just focus on this last part (i.e. innovation practice). However, without a supportive ecosystem in place, products coming out of innovation labs have high mortality rates. This is why applying all five principles is important.

As you can see from the graphic above , these elements are interconnected; each representing a build-measure-learn loop of its own. To the extent that strategy informs investment decisions, the success of these decisions in turn inform strategy. To the extent that investment decisions impact innovation practice, innovation practice produces learnings that inform investment decisions and in-turn inform strategy.

This is an innovation ecosystem at work. Each interconnected piece responding to data from the other pieces. Such a holistic approach allows companies to innovate like startups, without having to act like startups.

Explore more insights from GeniusWorks:

• Inside Daimler’s Lab1886 … the Stuttgart innovation hub focused on creating the future of mobility
• Inside Disney’s new iD8 Innovation Studios … where the magic of Mickey Mouse lives on with Buzz and Brainstorms
• Inside Medtronic’s Applied Innovation Lab … a focus on improving patient experiences, services and outcomes
• Inside IKEA’s Future Home innovation incubator … from even better Swedish meatballs to flexible rooms
• Inside Nike’s Research Labs … harnessing the spirit of Bill Bowerman to innovate the future of sports performance
• Inside Shell’s TechWorks innovation lab … where there is freedom to fail and to succeed
• Inside HENRi … Nestle’s global hunt for big ideas, named after the pharmacist founder who invented a baby formula.
• Creating a “Growth Factory” … How P&G tripled its innovation success rate, and how you could too.

A rabbit out of a hat, a card trick, the mystery of something appearing that wasn’t there before. Can you recall the first magic trick you saw? No matter what the trick was, the feeling it left behind is what stayed with you–the awe, the wonder and the excitement, the idea of greater possibilities.

I have worked with Turkish business leader Tanyer Sonmezer for almost 20 years. Whenever I arrive in Istanbul, he greets me in his office overlooking the Bosphorus with a big smile, often a hug.

Having trained as a mechanical engineering at the Middle East Technical University, he instead chose a business career, spending a decade as a general manager at Michelin. Since 2002 he has been the leader of Management Centre Turkey (MCT), taking the organisation from a small training company to the most trusted education and networking platform for business in Turkey today. To most business leaders, MCT is Tanyer Sonmezer.

He is ubiquitous in the boardrooms of Istanbul, but he has also led change programs in Greece, Ukraine, Belarus, Macedonia, Moldova and Dubai. Along the way he gained a masters in marketing, an MBA, and then constantly topping up his toolkit with programs at Harvard, Oxford, Stanford and beyond. And he’s written two books, with two more on the way – look out for The Fourth Manager. Growth strategies and innovation workshops, design thinking or 6 thinking hats. He’s your man.

Asked what his role actually is he says “chef, magician, pilot, photographer, and keynote speaker aside, I prefer to be an ordinary hero for those who love making ideas happen”.

In September he joined me on stage in Odense, for this year’s Thinkers50 European Business Forum. Whilst the great names of business education were here talking about the future of blockchain, sustainable innovation and revolutions in management thinking, I asked Tanyer to talk about his passion for magic. As a child he grew up working in an amusement park, and quickly acquired the fast hand of a fairground entertainer.

Today, he embraces over 100 magic tricks to explain the realities of business, the opportunities of creativity, and engaging people to think differently, to change their minds, and look deeper at what they see. Here’s an interview with Tanyer Sonmezer just after walking off the stage:

https://www.youtube.com/watch?v=ty6zEDiz9nc

Trick 2. Show them what they want to see.

Blake Mycoskie was travelling in Argentina, learning to play polo, in 2006.

It was here he started his shoe business, Toms by accident. He met some women in a bar who were in the country to donate shoes to children and he offered to help distribute them. When he returned to the polo ranch, his teacher Alejo Nitti asked him a fundamental question: “Who’s going to give them the next pair?” Kids’ feet grow fast. “What do we have to do to continue doing this?” Nitti said

In a document from CNBC the story continues: “I recognised in that question that was the problem with this kind of nonprofit charitable giving model, at least… these women had to spend weeks getting enough shoes that would last these kids for a few months,” Mycoskie says.

The two worked with a local manufacturer to produce the espadrille-style shoes, which Mycoskie called Toms, because “Tomorrow’s Shoes” wouldn’t fit on a label. He took a few pairs back to his California home to ask women what they thought, knowing little about fashion, before designer store American Rag agreed to sell them. On its first “shoe drop,” the company gave 10,000 pairs away to children in Argentina.

Now, more than 60 million pairs of shoes have been donated to children, and the company has also applied its one-for-one model to eyewear and water. In 2014, Mycoskie sold a 50 percent stake in the business to Bain Capital, valuing the company at an estimated $625 million, and likely making him more than $300 million. But his original aim was more about doing good.

“We literally had created karma, if you will, by, you know, really setting out to do something to help people versus just trying to make money,” Mycoskie said.

He has since launched a social entrepreneurship fund, investing in purpose-driven, for-profit companies.

Fashion retailers are under pressure. Many physical retailers, such as H&M and Zara have seen their sales decimated by the growth of online competitors like Asos and Zalando, who themselves are struggling to reach the expectations of investors. The fast fashion retail models pioneered by the likes of Inditex, has now created a new normal in terms of consumer expectations and behaviours that are difficult to meet.

Innovation has largely not kept pace with consumer behaviour, in a world of mobile-centric millennial consumers, where their aspirations are global, their choice is diverse, their influence is communal, and their patience is zero. Amazon has launched many private labels, H&M tried celebrity-designed ranges, Uniqlo invested in vending machines, Nike went for vast indoor experiences, Supreme became the ultra-hyped drop brand, and Depop is the new normal for reselling and vintage hunting.

Of all the trends influencing retail, personalisation – in the forms of customised products, personalised service, local engagement, personal shoppers and predicted curation – is perhaps the biggest trend for fashion retailers right now. In order to achieve that some retailers are using technologies such as AI and 3d printing, some are using expert staff and local kiosking, some are using data to build more sophisticated interplay between different channels.

Here are some of the most recent examples of fashion retail innovations:

Alibaba’s FashionAI with Guess

Alibaba’s New Retail concept seeks to rethink the entire retail experience, physical and digital, enabled by next generation technologies. This week the Chinese tech giant launched its first “FashionAI” concept store enabled by artificial intelligence. The Hong Kong store showcases Guess apparel through innovations such as smart mirrors, which display product information on a nearby screen when shoppers are touching or picking up a garment. The smart mirror also makes mix-and-match recommendations and points to where the suggested items can be found in the store. It also uses machine learning to computer vision to “learn” from consumers, designers and fashion aficionados within the e-commerce giant’s ecosystem. These insights include images of more than 500,000 outfits put together by stylists on  its Taobao platform.

https://www.youtube.com/watch?v=ypX7TkOoLUY

Adidas Berlin travel pass

Berlin transit authority BVG’s unusual collaboration with Adidas Originals – limited edition sneakers with a built-in BVG season travel pass. As such the wearer (as long as they are wearing the pair of sneakers at the time) will get free travel around the entire city on trams, buses, ferries and subways for the year. Although the shoes were quite highly priced at €180, the value of the annual travel pass is €728 which means they offer the owner a significant saving. Limited to 500 pairs, the shoes continue the BVG link in their design by mimicking the seat upholstery design used on the company’s train seats.

Amazon Echo Look gets stylish

Amazon Echo Look’s screen and camera functionality is being put to good use by fashion publications Vogue and GQ. Customers can use the device’s AI stylist to get style suggestions from the magazines by uploading photos from their smartphone. The magazines will also host weekly content on the Echo Look app’s home screen with the ability for customers to click through and buy items. Although Amazon says Vogue and GQ don’t get a cut from any purchases made, it’s the sort of collaboration that you could add such an element to.

https://www.youtube.com/watch?v=Jch5SOW5ZLs

Columbia Sportswear’s Azure cloud

Columbia Sportswear has collaborated with Microsoft to offer a better customer experience. The company uses Microsoft’s Dynamics 365 and Azure cloud services to get insights into how customers respond to products – regardless of the channel used. This then helps Columbia Sportswear to personalise the experience. The technology is also used to improve merchandise management by offering better reporting and analysis.

H&M’s Afound discount marketplace

H&M is extending to discount fashion with its new marketplace Afound. Significantly, H&M will allow other fashion labels to be sold on Afound. And of course H&M will use it sell its own unsold inventory. The marketplace will be accessible online and through a physical store in Sweden. The aim is to present a mix of brands at different price points. Similarly, Inditex’s remainder products are sold through a separate brand Lefties in which own brand labels are changed from Zara or Mango to Lefties.

https://www.youtube.com/watch?v=pkKbdmDwcVc

LVMH 24sevres multi-brand store

LVMH’s first ecommerce project is 24servres.com, which is a digital realisation of the Le Bon Marche store in Paris. The idea is to extend the physical experience to customers all around the world, including recreating the store’s famous window displays. LVMH also believes that its curated experience is what sets it apart with the brand taking an editorial approach to merchandising the site’s inventory.

Miquela, the digital influencer

Miquela Sousa is a 19 year old LA-based model and influencer. So far, so normal. But Sousa is actually a computer-generated figure – and no-one knows who is actually behind her. Still, she has more than 899,000 Instagram followers and fills her feed with images of outfits from brands such as Chanel, Supreme and Vans.

Net a Porter’s intelligent shopper

Luxury online retailer Net a Porter has invested £442 million in technology and personalisation. A robot selects clothes for customers based on their future plans, for example a planned vacation. The system uses AI to offer the personalised service. Net a Porter has also developed another tool that uses AI to put together outfits based on other items a customer has selected.

Nike’s superfast customisation

The Nike By You studio in New York lets customers customise a pair of trainers in less than 90 minutes. Known as the Nike Makers’ Experience, the process involves a series of graphic options and patterns, plus colour and size options, to create a design that’s unique to the customer. The experience uses a special model of trainer, the Nike Presto X, which was specifically created for it. Currently the Nike Makers’ Experience is invitation only.

Nordstrom’s local advisory stores

US department store Nordstrom’s new retail model is very different to its existing store proposition. The new concept deconstructs the department store into smaller, targeted spaces. The first of these is Nordstrom Local, which is a clothing store that stocks no clothes. Instead the small space has a stylish suite and dressing room with personal stylists ordering in products for customers to try. If they want to buy anything it will be shipped to their home. The space also offers alterations and tailoring.

Orchard Mile’s personalised ‘shopping street’

It’s been a slow process but more and more luxury brands are online, whether via their own initiatives or platforms like Net-a-Porter and Farfetch. One company changing how customers shop for these brands is Orchard Mile which lets customers create their own ‘shopping street’. The customer pick their favourite brands to populate the street, They can then click on them and go to a customised website featuring the designer’s entire collection. The goal is to make the experience akin to walking into the brand’s shop.

Start Today’s ZOZOsuit

The US subsidiary of Japanese fashion brand Start Today is aiming to change the way we buy online with its new at-home measurement device. The ZOZOsuit is an enhanced suit that uses sensor technology to capture 15,000 measurements from all over the wearer’s body. The data is then sent by bluetooth to the accompanying ZOZO app. Customers can then shop Start Today’s products and get recommendations on what will fit based on their exact measurements.

https://www.youtube.com/watch?v=32rbuLFbVWk

Stitch Fix intelligent box

Stitch Fix is using artificial intelligence to take the effort out of finding new clothes. Rather than the customer going from store-to-store browsing, the company uses a mix of human personal styling and AI to find and send products directly to customers. It uses customer data to find the products it thinks the individual will like. The AI is constantly learning based on what the customer returns and keeps, which means its recommendation get better and more personalised over time.

Tie Bar’s data-gathering stores

Menswear brand The Tie Bar started as an online store, but has since moved into physical retail. Notably the company started with pop–up stores, but found they were turning a profit so converted them into permanent stores. However they don’t operate in isolation. The Tie Bar uses the stores to improve its online offering by testing out new products and uses learnings from customers’ in-store stylist sessions to improve its online equivalent. The Tie Bar also uses online data about where its customers live and what they buy to decide where to open new stores.

Untuckit’s RFID merchandise

Casual men’s apparel retailer Untuckit is piloting the use of RFID in its Fifth Avenue store. The company will use the tech to track inventory and see which items are selling best. They can then use this to optimise inventory in real-time. Just as importantly the RFID will show which sizes and styles have low demand enabling Untuckit to remove or improve them. The store can also track staff and shoppers around the store to better understand journeys.

Viktor & Rolf and Zalando’s recycled collection

Zalando has linked up with fashion designers Viktor & Rolf to create a collection focused around using recycled materials to make handcrafted garments. Called RE:CYCLE, the new collection consists of 17 pieces of womenswear. The materials come from Zalando’s overstock fabrics, while Viktor & Rolf manage the design. The collection is deliberately priced to be accessible with the idea being that it’s a viable alternative to a customer’s usual purchases.

https://www.youtube.com/watch?v=Qq2Gg4heMuY

Wardrobe’s direct-to-consumer luxury 

Wardrobe.nyc is a luxury direct-to-consumer fashion label from designers Josh Goot and Christine Centenera. The brand sells clothes as ‘wardrobes’ with customers having the choice or four or eight seasonal essentials costing £1,104 and £2,208 respectively. Catering for both men and women it’s an interesting look at where luxury fashion could go in the future by offering high quality products, curated into capsule wardrobes at a lower price.

Zara self-service kiosks

With click-and-collect a well-established part of the retail mix some brands are looking at ways to improve the process. Zara is one of these. It’s testing self-service ‘pickup towers’ in-store which can hold up to 4,000 packages. Customers can use them to retrieve their online orders by scanning a barcode on their phone. The machine then locates and retrieves the package in just a few seconds. Given that most retailers’ click-and-collect services requires customers to queue up at a desk or till to get their items, this technology is a win-win. It makes the process faster for customers and frees up staff to do more important tasks.

https://www.youtube.com/watch?v=I368-C2Za5c

More on fashion

• Channel: Future Fashion … “Gamechangers” of the fashion world, including 25 case studies from 1Atelier to Agua Bendita, Diesel to Rapha, Toms and Triangl, Under Armour and Vinyana
• Article: The future of luxury … How can luxury brands capture the new luxuries of time, individuality, authenticity, belonging and experiences?
• Article: A New Textiles Economy … Fashion and the Circular Economy, exploring the changing role of sustainability within fashion, by the Ellen Macarthur Foundation
• Article: Future Fashion Report … Why creating a more future-focused fashion industry is essential, according to The Future Laboratory

More on retail

• Channel: Future Store … “Gamechangers” of the retail world, including 25 case studies from Amazon to & Other Stories, Etsy and Farfetch, Inditex and Sonae
• Article: Retail Futures … Alfred to Amazon, Brandless Brands and Sephora’s Studio … Smart, personal and integrated
• Article: Creating the future one click at a time … why Amazon has just been voted the world’s most innovative company
• Article: Design thinking with Fortnum & Mason … the beautiful reinvention of a British retail icon, combining heritage and innovation

 

 

 

Is the high street dead? Of course not. It’s just being reinvented. Whilst everyone talks about the rise of online shopping, it’s easy to forget that 75% of goods are still bought in physical stores.

Shops will not die out any time soon, but they must evolve with consumer habits if they are to stay relevant.

Physical retail needs to reinvent itself, with the help of technology, to play to its strengths – to be a real space, local and human, to enable participation and collaboration.

• Physical stores become places to spend time, to socialise, to play, to create, and share
• They become community hubs, places for local people to meet and host events
• Human, intuitive, emotional personalisation is only possible when people meet people
• Enjoy the trying before the buying, and when you do buy, its instant gratification
• Local stores understand local conditions, from specific needs to festivals and the weather

Innovative physical retailers are trialling experience-led formats where customers can lose themselves in virtual reality (VR) experiences, watch content on ultra-high-definition digital displays, or receive tailored advice from expert staff.

This is reflective of a growing trend towards using a brand’s physical footprint to entertain, inform and visually impress customers, rather than to purely sell a product.

Enabling this transition to experiential retail is in-store technology.

From digital, interactive signage in a shop window to virtually trying on clothes with a magic mirror, technology is driving innovation in physical stores and allowing retailers to create unique brand experiences.

The digitalisation of the retail store

By 2030, it is estimated that 90% of the global developed population will own smartphones that are running on increasingly ubiquitous internet access, according to Deloitte.

Although challenging to retailers, online interaction can also act as a hook to bring customers into a store, whether to pick up click-and-collect orders, experience personalised customer service or in response to a location-based notification.

The increasing use of artificial intelligence (AI) processing such as virtual assistants within smart devices will challenge retailers to improve their performance to deliver a seamless online and offline experience.

New technologies including VR and augmented reality (AR) will enable retailers to meet consumers’ growing expectations of experiences that are more intimate and interactive, worthy of sharing on social media.

And retailers will benefit from the estimated 1 trillion internet of things (IoT) sensors by 2025, providing a real-time view of how their stores are running, and how customers are interacting with in-store technology and products.

Retail Week and Samsung recently got together to explore the best in-store technology innovations that will contribute to customer experience – how consumers will behave, what will drive footfall and sales in store, and how retailers can prepare their teams for this changing retail landscape.

• The “me age” will have a big impact on retail
• Gen Z like anonymity in store, preferring self-service over human interactions
• By 2030, the over-50s will contribute £220bn to the UK high street

Shifts in global demographic trends, as well as consumer behaviour in the next two to three decades, present new opportunities and challenges to how retailers operate.

Brands will be selling to a bigger, richer global middle class, who by 2030 will be spending three times the £5.4trn per year they do now, according to consultancy firm McKinsey.

And according to the UN, by 2025 there will be an estimated 68% of the world’s population living in urban areas compared with 55% now – increasing the need and interest in retail and leisure facilities.

Retail futurologists predict that the customer of the future will want to be actively involved in the in-store experience, whether they are interacting with a touchscreen or participating in an event in store.

Lowering the cost of particular types of in-store technology will also allow retailers to create physical stores that are more experiential.

The shift in digital signage to all-in-one smart displays, for example, means fewer hardware costs for the retailer. The displays prompt customers to make a purchase based on curated content that changes in response to real-time data.

Meanwhile, low-cost sensors embedded within products such as radio frequency identification tag (RFID) systems can enhance the in-store experience by offering real-time stock information for both customers and staff.

Retailers that ignore the grey pound do so at their peril. By 2030, it is estimated that the over-50s in the UK will account for nearly half of all consumer spending at £368bn, according to a study by UK consultancy firm Centre for Future Studies.

Technology advances in mobility will help to overcome the physical restrictions on senior customers accessing stores.

Driver-assistance systems – which have features such as collision-avoidance sensors, automatic lane centring and driverless vehicles – will come to the fore as governments look for more ways to improve road safety.

Shopping in store also offers this age group the social interactions that Gen Z want to avoid, as staff become less transactional and more focused on offering high levels of customer service.

Retailers can also develop applications that deploy the types of technologies that will be increasingly aimed at seniors – from robotic and voice-activated helpers in the home to VR headsets that will become more commonplace and be used to stay connected to family and friends.

• Sports stores allocate more floor space to experience and less for product
• In-store AR in the beauty sector from L’Oreal, Mac and Sephora
• Technologies that show the benefit of in-store automation

There will be a shift in a store’s function from a “distributor of products” to a “distributor of experience”, according to US retail futurologist Doug Stephens.

Instigating these in-store experiences are high-definition display screens alongside the emerging applications of VR, AR, AI-enabled voice and facial-recognition technology.

https://www.youtube.com/watch?v=R60rAQCqkeM

Leading retailers and brands are trialling these types of technologies in stores to see which applications will maximise customer engagement and brand loyalty.

Smarter ways to try before you buy

Few retailers and brands currently have the in-house expertise to create amazing tech-driven experiences, so L’Oreal decided to acquire this knowledge by buying beauty technology firm ModiFace this year for an undisclosed amount.