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Scrum Master Toolbox Podcast: Agile storytelling from the trenches
BONUS Why 98% of Innovation Fails Before It Reaches a Single Customer With Lorraine Marchand
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- [00:02]
A
Hello everyone. Quick heads up before we start today's episode. The Global Agile Summit is happening on May 4th. Yes, May 4th. And even with a big blowout Star wars party, you have to join. It will be online and it's like always free to attend. We have four tracks this year that I'm really excited about and I think you will too. Stick around to the end of the episode to know what they are. If you want to check it out already. Now you can check it out at bit ly globalagile 26. That's the numerals 2 and 6 at the end. So one more time, that's bit ly globalagile 2, 6, all one word, all lowercase. And 2 and 6 are the numerals 2 and 6. So stick around till the end of the episode and I'll tell you what's in store. But for now, on to today's episode. Hello everybody. Welcome to a very special bonus episode. In this bonus episode, we're talking about innovation and experimentation with Lorraine Marchand. Hey Lorraine, welcome to the show.
- [01:16]
B
Well, thank you, Vasco. Great to be here with you today.
- [01:19]
A
A pleasure to have you. Lorraine helps senior leaders innovate in high cost of failure environments. She's an award winning author, keynote speaker and innovation advisor. And she brings over three decades of experience, including work at IBM, Watson Health, and her recently released book, no Fear, no Failure offers practical frameworks for learning and growth without undue risk. So Lorraine, let's start with your origin story. What got you into this, I could say huge universe of the topic of innovation and experimentation with AI in the first place?
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B
Oh, well, thank you, Vasco, that is a good question. And I started in a very small way as a very young person. At the age of 12, my dad, who was a serial inventor, we didn't even use the word innovation at that particular point in time. And he did not invent cereal. I was once asked by one of my students if he had invest invented Cheerios. I said no, no cereal. S E R I A L inventor. He was always inventing. So around the house he would always regularly identify problems and then he would challenge my brother and I to help him solve the problems. And he had this mantra of we always had to come up with three solutions. And one summer he really wanted to underscore his lesson about how to practice innovation. And he took us to the hot shops cafeteria. I'm not sure what the metaphor might be in Europe, but a diner, for lack of a better word. And there in the big red vinyl booths where we ate our scrambled eggs and drank our orange juice. He gave us our assignment. And our assignment was to determine what was slowing down table turnover in order to help the restaurant pull more customers through more quickly.
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A
Oh, wow.
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B
He was really serious about this. We had stopwatches, we had graph paper, we had three color pens. And he even arranged for us to interview waitresses, busboys, and the manager. And after three days, we determined that it was these pesky sugar packets that were holding up cleanup because the granules were spewing over the table and on the floor. And with our stopwatch, we could tell how long it was taking to clean up that part of the table. So, true to his lessons, we went through a number of different types of solutions. We landed on three. We took one to prototype. It was called the sugar cube. We took it to the manager of the hot shops. She loved it. In fact, she loved it so much that she went ahead and ordered them from us. So we had to go into production. And then she spread the word throughout the rest of the hot shops in that Baltimore, Washington area of the US and the interesting part of this is Hot shops ultimately evolved into the Marriott Corporation, which I believe everyone knows the Marriott, that's a global brand. And so for a period of time, our sugar cube was actually promoted by Marriott. So at the age of 12, I learned that problem solving was fun. It was really safe to experiment. I was in a very safe environment, and it turned out to be lucrative because we earned some revenue and some royalties from our sugar cube. So that is what got me into this big, messy universe that we call innovation. And I have never looked back, always ahead.
- [04:58]
A
That sounds like a wonderful story. It also sounds like something I would. A prank I would play on my kids. Kids were at a restaurant. In fact, this is something I do even without noticing. I start looking at how things are moving. Oh, if they could do this, this would go faster. I think it's called a occupational hazard, right?
- [05:21]
B
That is the way the best innovation occurs. It's what you observe every day and something that's within your life, your walk of life, to improve. And when people want to know how to start out with innovation, I say get a notebook, whatever that means to you, and just start to observe problems and write down at least three of them every day. Just things that are occurring to you. And that's where the fodder for where you're going to innovate your ideas. That's where it's going to come from. Because you can't go out there and solve world Hunger in some foreign land. You need to be starting your innovation close to the core with things that you know and understand and things that matter to you.
- [06:00]
A
Absolutely. So when you think back to your time working on innovation at IBM Watson Health, like what, what was the process? How did you get the problems you were actually trying to solve for the customers? And one thing I'm particularly interested in, because there are so many problems, if you just pay attention, how did you get to decide which ones to solve?
- [06:22]
B
Well, at IBM Watson, it was a very interesting process. 250 engineers, the best and brightest in the world, working on any number of problems. And normally what we would do is we would meet with a customer, we would have what we called a garage session, picking up on the Silicon Valley, all of the garage based entrepreneurs that started because they dropped out of school and we would start to tackle problems with the customer. What are the things that are slowing down your processes, your workflows? What new solutions do you want to bring to market that are going to fit with your other products? So we'd have those kinds of conversations and then we would start the process of designing and iterating with the customer a solution that might fit that need. So it started out being very much a reference customer based type of process, so that we were informed by authenticity around the problem, somebody that really had a strong perspective on it. And importantly, the, the idea of innovation in a commercial sense means that you have to have a customer who's willing to have you solve this problem for them. And so it's really important that you're solving the problem with the customer and for the customer, because ultimately they're the ones that are going to pay you for the solution. So that's how it would start.
- [07:49]
A
That's actually a very important aspect because a lot of the innovation that happens today in most corporates is actually done in a vacuum. It's the people that are developing the products, thinking about, oh, what would be good for the customer. And one of the difficult things I have when working with teams in those positions is to convince them that it's actually not that difficult even to talk to a customer. I was working at a ride sharing for buses, so like Uber for buses if you will, company. And they were kind of stuck in this idea. They couldn't talk to customers. I said, wait a minute, but there's a bus stop out there just outside the office and your buses stop there, don't they? Yes, they do. So why don't you just go and sit there like your father told you to Sit at the diner, right, and observe what is going on and talk to people, even run some ideas through them and so on. How do you get people to kind of absorb this, call it perspective or mindset, that innovation can happen at any time if we just keep our eyes and ears open.
- [08:53]
B
I really like the comment that you made, Vasco, and I agree with it 100%. In my first book, the Innovation Mindset, I walk one through idea generation, all to getting your idea to the commercial marketplace and selling it. And the fourth step on that journey is customer research. And for a lot of reasons, it is the step that is most intimidating to innovators. You know, they are afraid to talk to customers. They don't know how to do it. They think they're going to have to spend oodles of money on market research. And I say no. This idea of ethnographic, and not to use a buzzword, but ethnographic means that you are observing the customer in their natural habitat, doing their work, doing what it is they do. And through that observation, you're able to pick up on what's working and what's not working. And so the idea of observation is really critical to identifying the right problem and being in lockstep with your customer. So I try to make it, as you described, as simple as possible for individuals to see how they can start to engage with the customer in very straightforward and easy ways and how they can learn from them. And I always require, when I'm teaching boot camps, I require that my students, whether they're young or old, they have to perform 100 customer interviews. And we go through exactly how you pull that together. But you know, with every interview you learn more, you pivot, you adjust, and you can do focus groups, you can do one on ones, you can do surveys. But you have got to really make yourself a diligent student of bringing all of this customer research to the fore. So it's hard. I'm happy to hold your hand, but you absolutely must do it. And I would say that those who shun the process or don't commit to it fully, their results usually show because as you described, you have inside out thinking. In so many organizations where we sit around the table and we think we know what the customer wants, we reinforce it with each other. We find surrogates for customer research on only to take something to market and then be disappointed that nobody seems to want our idea. It's not resonating, nobody wants to pay for it. And as I advise startups around the globe, I would say that 98% of the time, this is the problem that I encounter. We have fallen in love with our solution and we have not done our true problem solving, dissection and customer research to make sure that we're solving a problem that a customer wants to, wants to pay us to solve.
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A
Well, yeah, we fall in love with our solution. I've seen that anti pattern so often. But there are other anti patterns. Even in companies that really are serious about investing in innovation and trying to create this, I guess, cycle of new ideas that are then being delivered and tested. There are other obstacles. I remember interviewing Elliot Parker, who also wrote the book on innovation. He's the CEO at Alloy Partners, talking about the need to treat innovation as a fundamentally different process than what we would call delivery. Right. Like product delivery in this specific context. What's your experience when trying to bring this innovation? I would say as a natural thing, as a way to look at the world. To large organizations that are, as Elliot said in that episode, really optimized for delivery.
- [12:44]
B
Yes. I mean, as we look at corporations, they've got shareholder pressures quarter to quarter and they're focused on making their numbers. And so I think it's really important. In no Fear, no Failure, my new book that's coming out on my new book that's going to be released February 10th, I examined this idea of the failure, the strategic failure that ends up slowing companies down and holding them back from innovating. One of the antidotes to this failure is one of the five C's that I lay out in my framework is this idea of chance. And so we have to take the mantra that Sergey Brin of Google did when he created the golden ratio. And the golden ratio is 70, 2010, when you are investing in your company and your products, 70% goes to core, 20% goes to adjacencies and customers and markets. And 10% should be net new, transformative. Don't know if it's going to work out, but we're going to give it a try. And so if you can become a company that is a student of this idea of taking that 10% or whatever the number is, that works for you. But setting aside some of the budget to strategically invest in new areas of growth, what the golden ratio has shown repeatedly for about the last 15 years, company after company, is that five years later, 70% of your growth, growth will come from that 10% that you invested in innovation. So there's an inverse correlation to where you're investing and where that growth is going to come in the in the future. And companies that don't subscribe to this idea find that their growth is stout, watered, slow. So you know, if they're investing 100% in Core, maybe a little bit in adjacency, they're going to continue in that single digit growth and not really have breakout. So a lot of times those numbers, that data is very much eye opening for companies to hear about, show them some of the examples of that and that tends to get their attention. So it's got to be a strategic imperative and we've got to set aside budget and we also have to set aside resources, meaning our talent to be able to spend some time on these net new ideas.
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A
So we've talked about innovation as a culture or as a mindset. We've talked about the structure that supports or does and innovation like that golden ratio we just talked about. But we really need to also talk about the actual actors, the people who make it happen, the teams that you work with. What have you learned about who needs to be in the room, so to speak, how do you balance a really strong focus on domain expertise versus more customer empathy versus technical depth. And of course also something so important in the innovation, the ability to see the world differently, challenge assumptions without breaking down the process of innovation.
- [15:50]
B
Vasco I like to say that the innovation mindset has four components. Problem solving, insatiable curiosity, embracing change, and welcoming diversity. And the last point here about welcoming diversity gets to the team. We can have a homogenous group of people around the table all enjoying each other's ideas and being in an echo chamber. So I like to say that this whole idea of getting thinking outside of the box means that you step outside of your box and you step into someone else's box. So it's really important that you have diverse perspectives around the table from different walks of life, different experiences and then certainly different roles, different functional areas so that we have engineering, we have marketing, we have customer experience. You know, we have to have a broad array of individuals that come together in order to think through this problem and come up with solutions. No idea is a bad idea. We bring them all to the table, we brainstorm and talk them through until we come up with a set of solutions that we then can interrogate, maybe put on a bit of a two by two matrix and then do some down selection from there. So diversity is absolutely critical. And I will say in the most innovative organizations that I've worked in, we have definitely embraced this idea. Bringing together a cross functional team, multidisciplinary and looking for how we can bring the best ideas to the fore.
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A
And of course that's probably kind of a balancing act in itself, right? Like thinking about all of those problem solving curiosity, being able to embrace change and effect change as well and diversity, which I mean, I've worked in tech for so many years. We in tech are not so often welcoming to other non tech focused specialties. And that is very visible, for example, in the work of Scrum masters, because we have Scrum masters that come from all kinds of industries and backgrounds and this is a very common debate on LinkedIn, for example, are shunned because they don't know how to code quote marks or quotation marks around that, of course. So how do you help these teams kind of accept the need to find this balance, but also at the same time accept each other as people? What have you learned about that?
- [18:27]
B
Well, you know, you're absolutely right. And again, what happens when you have really smart engineers or tech people around the table? They're designing from a technical technology perspective, not from a customer use perspective, not from how this is going to work in real life or the problem that we're solving. And I actually ran into this situation at IBM Watson regularly because even though we would start the process with a customer, a lot of times what would happen is engineering would say, okay, we got what we need, we're going to sit together, we're going to figure out the solution, we're going to create the best thing ever. And then we're going to bring in marketing and we're going to ask you, Lorraine and team to figure out how to get this in the Johnson and Johnsons and the Pfizers and the Sanofi. And you know, for me it was life sciences, the biggest companies on the globe. And I would always have to pull them back and say, no, this is not how the process is going to work. We have to keep the customer in lockstep at every stage and we have to keep opening the aperture because just because this solution solves the need of the reference customer, Medtronic or Boston Scientific or Sanofi, they represent an n of 1. And that does not mean that you're going to have a marketplace that wants the solution that you're creating. So after we've got various solutions that we're testing with the customer, staying with them in lockstep, doing the frontline research to make sure this is useful, we have to open up the aperture and bring in more customers, get more feedback to make sure that this is actually solving a marketplace need. Because we're IBM, Watson Health, right? We are not solving one customer's problem. You know, we have to have a product that is going to be accepted globally and drive revenue. So we have to keep opening that aperture. So once you bring folks along the journey and they see that the process works and it has better results and that they're learning, they really embrace it. Because, you know, at the heart of engineers, they love to learn. I mean, they have a systems mindset and they like to know how everything comes together, but they are lifelong learners. And so when you can show them that, no, this isn't going to take you off track, it's part of the learning process. It's going to get better, it's going to be more impactful. You're going to be really satisfied when you see that you're solving a customer problem. I found that they very much embrace
- [21:03]
A
that now, working with multiple customers and trying to find what lands, of course, means that we need to experiment. But for many companies, this word can have, you know, different meanings for every company. When you talk about experimentation, what do you exactly mean and how do you present the idea and the process of experimentation? Because, of course, no experimentation, no learning. So how do you do that? And then how do you help teams also transform that experimentation into learning that stays right like that, it's captured, that is transformed into something that has impact then later on?
- [21:43]
B
Yeah, well, I think that at the heart of experimentation, it's a scientific method. It's having a hypothesis about the problem. It's becoming very adept at doing problem deconstruction. So you have to have the right problem statement. You have to break down that problem. Whether you use first principles, deconstruction, the series of whys, reframing, there are different methodologies that we can use to break down the problem, but we have to make sure that the problem statement is clear, clear, measurable, significant and actionable. Right? So we have to have a really solid problem statement, and that's number one. And then from there we can go into the fun process of brainstorming different solutions. Maybe it requires that we put two or three solutions together. Maybe we take a solution and remove something. So there are a lot of interesting ways that we can come up with solutions. And then we have to quickly land on the solution that we think has the most impact based on some customer input and we have to test it. So I'm a big believer in the minimal viable product methodology, but I emphasize minimal. Let's really understand the feature that we're trying to test, get it out in front of the customer as quickly as possible, get that feedback, come back and make those pivots and those adjustments that we need to make. So that is a very nice, neat experiment, clear problem statement, a set of solutions down, selecting to one prototype mvp, testing it with the customer and then coming back and putting that back in the loop. Right. The continuous loop of learning and then starting that process all over again. Because you may have learnings that come in from the client that indicate that you need to make some adjustments to that initial solution.
- [23:39]
A
Yeah, I would be surprised if there aren't. Right. It would be rare. Even if possible, it would be rare that an experiment would land exactly as expected. It might validate our hypothesis, but it will definitely bring more information than we bargained for. Looking at your journey, now that you have this experience, you consult companies, you've worked at Watson Health, what was an innovation related lesson that it took you some time to learn? Even to you, who is now talking about this and writing books and consulting, something that was even hard for you to learn, but that really triggers and enables teams and organizations to benefit from that innovation perspective and mindset?
- [24:30]
B
Yeah. Well, at one point at IBM Watson Health, we were teaming up with a very large medical device company that was working on a tool that could intervene with individuals that were having mobility pain. And so we were designing, understanding the problem with the customer and developing the solution. And the software engineers were doing a fabulous job of figuring out an algorithm that would allow a patient or an individual in their own home based on their mobile phone and looking at how quickly they got up from their chair or how easily they could open a jar to try to identify where their mobility issues were and where they might be having pain. And the whole idea was to use this algorithm to then help the device tell you when to deliver the pain intervention, the pain solution. And it was going along really well and that customer really loved it it and even I was becoming very enamored with the coolness of the solution until I said, you know what, let's now go to the next step and I will organize this. We're going to get this in the hands of some physicians, we're going to get it in the hands of some patients. We're going to go into homes and we're going to see how it actually works. And it was through that process that we found out we were really off track in terms of how a patient might be able to use this type of solution and when it was going to be able to deliver the pain relieving technology. And so even for me, it wasn't until we got this in the customer's hands and we were able to see how it was going to function in real life that we had the aha moment about how we were going to make adjustments. And those adjustments ended up causing a pivot where we didn't develop the algorithm actually for the medical device company, but we went to a pharmacy, pharmaceutical company that had pain related drugs and they use the algorithm in order to determine how a patient should use a pain related pill. So that caused a huge pivot in terms of who our end customer even was.
- [26:53]
A
That's a great example of that unexpected lesson from an experiment. You always go into an experiment knowing what you want to learn, but you always learn a lot more than what you expect. Expected that that would be at least that's my expectation and my experience.
- [27:09]
B
And I think that, that if I may just say that, you know, having those learning objectives is really important because, you know, in the book the Fear of Failure, what I learned is that so often if you have failure in your operating system. Right, a tech word. But if failures in your operating system, you're not going to try these experiments and you're not going to be willing to get it wrong. And that's why it's to reframe the wrong as learning and make sure that your learning objectives are, well, what can I learn about this tool? What can I learn about the customer? What can I learn about where this might be helpful in terms of a patient's experience? Setting up those kinds of questions completely reframes the experiment from yes, we got it right or no, we got it wrong, to how can we learn and where are we going to perfect this going forward?
- [28:03]
A
Absolutely. Absolutely. All right, before we go, Lorraine, we're getting close to the end, but before we go, of course, your book no fear, no Failure offers practical frameworks, pardon me, for learning and growth without undue risk. So everybody, check it out. It's available at the time this goes live. It's available in your favorite bookshops. But what would be a resource, a book, a video, a course that you could recommend beyond your book, which will be linked in the show notes to our audience that wants to get deeper into this topic.
- [28:36]
B
Yeah. Well, Vasco, I would be remiss if I didn't encourage your audience to get my first book, the Innovation Mindset, the second book, no fear, no Failure, your audiobooks, your programming, which is fantastic for people that want to innovate. And I would say in addition to that, I'M very much. I'm practical. I love teaching boot camps and when I teach boot camps, I want people to bring a problem and actually work on it in our boot camp so that they solve something that they care about and they have a chance of it making it to market. So the courses that I tend to like are the design thinking ideo courses are out of Stanford and I like the design thinking courses out of Stanford. They're all online. They make it really easy to understand and you can apply them immediately. So if you're going to pursue something separate from what Vasco and I offer, then I would say make sure it's practical and usable, that you bring an idea to it and something like design. Design thinking fits the bill.
- [29:36]
A
And I would add to that that everybody's out there is trying what is obvious if you want to stand out and survive in a competing market. Of course, if you have no competition, that's a different story. But in a market where there's competition, you definitely should read Lorraine's book, no Fear, no Failure, already available to all of you who want to dive into the topic as well. Lorraine, before we go, where can people find out more about you? Maybe get in touch and know more about the work that you're doing?
- [30:04]
B
Yeah, Well, I would love for you to connect on LinkedIn so you can find me at Lorraine Marchand on LinkedIn. I have a website, lorrainemarshand.com and I've got videos and talks and a lot of content that you can avail yourself of. And you can also order the book on Amazon, Barnes and Noble, Columbia University Press, you know, any number of different outlets.
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A
And Kobo, let's not forget. And Kobo.
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B
And Kobo. Yes. Very, very true. So, yeah, and I look forward to hearing and engaging in what your audience is thinking about these topics. I love to get a good discussion going on LinkedIn.
- [30:45]
A
Absolutely. Lorraine, it's been a pleasure to have you on the show and sharing all of that knowledge and experience with us. We thank you for being so generous with your time and your knowledge.
- [30:56]
B
Well, I enjoyed it, Vasco, so thank you for the opportunity. It was a privilege and an honor. Honor.
- [31:04]
A
Hi there, friends. Thanks for sticking around till the end of the episode. So let me tell you what's coming on May 4th. We're running the Global Agile Summit. It will be online and I want you there this year. We have four tracks and each one is built around real conversations with practitioners. No slides, no keynote theater, just honest interviews with people doing the work, just like you. The first track is AI in organizations where practitioners show what actually works. No hype, just AI that makes your Monday better. Happy Monday everybody. And then we have the People Track. Honest conversations about putting humans at the center of how we work and keeping them there. And third is Agile in Construction. And yes, I really mean brick and mortar construction. Lean and agile. Actual job sites, Field leaders removing waste. Teams transforming how buildings get built. Stay tuned for what I think will be a super track on Agile. Agile in Construction. And the fourth track is Agile in Gaming. How game studios ship without burning out Agile Inside the Creative Pressure Cooker over the years We've had more than 12,000 participants since 2017, the time of the first summit organized with the podcast, and this year we're making it easier than ever to join. You can register for free and get access to the Summit sessions live during the event week. That's May 4th to May 6th. Or you can grab the Practitioner Pass and get immediate access to last year's keynotes from Jurgen Apollo, Gojko Adzic and Mirete Kangas right now, even before the Summit starts. So so grab your Practitioner Pass and start learning today. Head on over to bitly globalagile 26. That's 2, 6. The numerals 2 and 6 sign up and I'll see you on May 4th. And one more time, here we go. Bit ly globalagile 26. All lowercase, all one word and 26. That's the numeral 2 and the numeral 6. I'll see you on the conference floor.