10

PRIMING THE PUMP

A SEVEN-STEP PROCESS FOR CREATING INNOVATIVE IDEAS

Marvel Comics is an iconic American brand that was founded in 1939, during the golden age of superhero comic books. By the 1960s, Marvel Comics—home to Spider-Man, the Incredible Hulk, the Fantastic Four, and the X-Men—had become the leading challenger to DC Comics, creators of Superman, Batman, and Wonder Woman. Marvel was specially loved for its quirky, often troubled superhero characters and the true-to-life emotional problems they experienced: Peter Parker, the insecure teenager with spider-like powers who nonetheless can’t get a date with the girl he likes; Bruce Banner, the emotionally reserved scientist who becomes the Incredible Hulk when his temper is triggered; Tony Stark, the millionaire weapons profiteer with a badly damaged heart who shields himself—physically and emotionally—in an armored suit that turns him into Iron Man.

Unfortunately, during the 1990s, Marvel joined many other companies in falling prey to the age of corporate raiders, junk-bond financing, and extravagant debt. By December 1996, Marvel had gone into a tailspin, forcing it to fire most of its workforce and ultimately to file for bankruptcy. Emerging in 1998, Marvel was cash-starved, saddled with costly debt, and reliant on revenues from steadily declining comic book sales for survival. The company’s odds looked poor—until a Hollywood agent (and lifelong comics fan) named David Maisel proposed an innovative new strategy featuring movies built around Marvel’s most unique attribute: its roster of compelling, relatable characters.

Marvel was no stranger to Hollywood. Like DC Comics, it had entered licensing deals with some of the biggest movie studios, including Sony, Universal, and Twentieth Century Fox—companies with long histories of experience and expertise in creating successful motion pictures. Unfortunately, the track record of Marvel-based movies had been mixed at best. Men in Black (1997) had been a big hit for its day, grossing $253 million. But other Marvel pictures, like Howard the Duck (1986), Punisher (1991), and Blade (1998), had fallen far short of expectations.

Named COO of Marvel Studios in 2004, Maisel set to work implementing his vision. Marvel would no longer license out its characters to outside studios. Instead, it began producing its own movies, which would enable the gradual creation of a “Marvel cinematic universe” (MCU), making possible films in which two or more superheroes would appear together. In March 2007, Maisel named Kevin Feige president of production for Marvel Studios. Feige had been involved with producing Marvel movies since 2000, and his intimate knowledge of the Marvel characters and the universe they inhabited would prove to be crucial to the company’s reframing.

In the years that followed, Marvel developed a moviemaking style that represented a radical departure from Hollywood norms. Marvel avoided investing in fancy offices, impressive studios, and sky-high salaries for executives or stars. The company installed its headquarter offices over a car dealership and stocked it with old, used office furniture. Marvel recruited marquee names to appear in their pictures only under special circumstances that allowed the company to pay bargain-basement prices. For example, it cast one-time Oscar nominee Robert Downey, Jr., as Iron Man at a time when a public history of drug problems had made the actor persona non grata to executives at other studios. Rather than hiring directors with track records of success in the superhero genre, Marvel hired ones whose success had come in unrelated movie categories. Iron Man was directed by Jon Favreau, best known for low-budget indie films with clever dialogue, such as Swingers, Elf, and Zathura: A Space Adventure. Favreau brought an attitude of playful experimentation to the movie set, so that costar Jeff Bridges described the project as feeling like “a $200 million student film.”¹

Perhaps most important, Marvel Studios built a production system designed to protect and nurture what the fans loved best—the quirky Marvel superheroes. Eliminating layers of middle management gave filmmakers and screenwriters greater freedom to develop complex stories with edgy, potentially controversial twists, since there were fewer executives with veto power. Marvel also created a Creative Committee, including not just company executives but some of Marvel’s top comic book editors, to oversee the production of all the company’s movies. For the first time, comic-based movies would be shaped by comic book lovers themselves, ensuring the artistic integrity of the characters and their interweaving storylines.

The results have been amazing. The first movie released by the new Marvel Studios, Iron Man (2008), was a blockbuster, grossing $585 million worldwide. Since then, the movie industry has been largely dominated by films set in the MCU, including The Amazing Spider-Man (2012), which grossed $758 million; Captain America: Civil War (2016), at $1.1 billion; Black Panther (2018), at $1.3 billion; Avengers: Infinity War (2018), at $2.0 billion; and the champion of them all (so far), Avengers: Endgame (2019), at $2.8 billion.² The last-named movie was also the fastest film in history ever to reach the $2 billion revenue level.³ Of the top 10 highest-grossing superhero films of all time, 8 are products of Marvel Studios, as are 4 of the top 10 highest-grossing films in any category.

Where Do Great Ideas Come From?

Later in this chapter, we’ll take a closer look at how Maisel, Feige, and their associates at Marvel Studios developed the innovative strategy that transformed their business from an ailing also-ran into a world-beating powerhouse. With the benefit of hindsight, some of the moves they made—such as building emotionally complicated stories around the quirky personality traits that made Marvel characters popular in the first place—might appear obvious. But creative ideas that become the foundation for wildly successful multi-billion-dollar businesses are never as easy to recognize and implement as they might appear after the fact. If they were, business success would be a much more commonplace commodity. So we can’t simply write off Marvel’s extraordinary success as based on “obvious” insights. Real insight is almost never obvious.

On rare occasions, the creation of innovative ideas can be fairly straightforward. Sometimes the arc of technological development points clearly toward future developments with obvious potential to create huge new value for customers and the businesses that serve them. By the 2010s, it didn’t take a visionary genius to recognize that automobiles freed from dependence on fossil fuels were the logical next step in transportation technology, which is why research and development departments at all the big automakers were hard at work on developing the technology to make such cars economically practical.

In a handful of other cases, customers may be aware of the kinds of new products or services they need and want, and they may even explicitly request them. More often, however, customers have little or no idea as to what they need or want. This was the case for Marvel comics fans in the late 1990s. It’s doubtful that any group of comic-book readers or moviegoers would have been able to explain precisely what they wanted from a Marvel movie. At most, they might have been aware of a vague dissatisfaction or boredom with the existing offerings.

When you face a complicated strategic situation like the one Marvel faced, looking for new ideas “in spite of the customer” may require new skills on your part—new ways of thinking about your business that can help you envisage alternatives you otherwise might not consider. Here is where a practical methodology for sparking and focusing creative thinking can play a valuable role. A well-designed process provides a structure for thinking and behaving; it creates a common language for codifying, storing, and sharing data and information; and it offers a checklist of things to do and questions to ask when innovating. A good process can help you innovate effectively, and to do so repeatedly and consistently, as a routine part of your daily operations. The purpose of this chapter is to provide you with such a process.

In 1998, I started practicing Value Innovation under the guidance of W. Chan Kim and Renée Mauborgne. They are colleagues of mine at INSEAD, where they are codirectors of the Blue Ocean Strategy Institute. They are also authors of the classic 2005 book Blue Ocean Strategy as well as a valuable sequel that updates their ideas and offers a host of additional illustrative examples.⁴ Over the years, I’ve learned a great deal from both of these brilliant strategy thinkers, and with their support I’ve coached a number of companies in using Blue Ocean tools specifically to generate innovative ideas.

In the process, I’ve adapted the most powerful elements of Blue Ocean Strategy thinking and tools. I’ve also included additional exploration tools and techniques, integrating the suite of methods into a Seven-Step Innovating Process methodology that applies Blue Ocean thinking to the specific challenge of innovating. The resulting system helps innovators restructure their thinking and effortlessly switch from supplier-side to customer-side thinking.

Because many of the tools I favor have their roots in the Blue Ocean Strategy approach invented by Kim and Mauborgne, I strongly recommend that you read one or both of their books if you are interested in fully mastering the business approach they pioneered. The overview of my adopted methodology in this chapter will offer you a capsule version that I hope will suggest the power of using a systematic process to stimulate valuable creative thinking for anyone in almost any kind of business.*

However, as mentioned previously, I am not dogmatic about insisting on the primacy of any one method for generating innovative concepts. Instead, I recognize that there are a number of methodologies that can be useful to companies seeking ways to jump-start their innovating engines. Indeed, smart people have been producing ingenious approaches to creative thinking at least since 1939. That was the year when a groundbreaking advertising executive named James Webb Young published A Technique for Producing Ideas, which people are still reading and using to spark their own innovative brainstorms today.

More recent examples of innovating toolkits include the TRIZ methodology, described in Chapter 2, which helped Samsung’s management team focus the creativity of its employees on new product ideas. Offshoots of TRIZ that some organizations employ include SIT (Systematic Inventive Thinking) and USIT (Unified Structured Inventive Thinking). Another well-known innovation technique is Design Thinking, successfully practiced by the design and innovation firm IDEO and popularized in books by Thomas Lockwood, Vijar Kumar, and others.⁵

In my years as a consultant, trainer, and teacher, I’ve observed companies using many kinds of tools in the process of generating ideas, sometimes combining elements from one approach with techniques borrowed from other theories and thinkers. Sometimes organizations find it useful to shift from one methodology to another as a way of refreshing the imaginations of their employees and stimulating a new burst of outside-the-box thinking. Be aware that most toolkits have an implicit underlying theory or view of the world. Some toolkits, such as Michael Porter’s Five Forces Model and the Boston Consulting Group’s Product Portfolio Matrix, tend to assume a supplier-side view of the world; others, like the Design Thinking toolkit and the Jobs-To-Be-Done framework associated with the work of Clayton Christensen, assume a customer-side perspective. When you adopt a specific toolkit, you are also implicitly embracing a particular underlying theory of the business—which is an important reality to understand and learn about.

However, if you have a favorite innovation methodology that you have found effective—or if you are working with an outside consultant who advocates an approach you consider relevant and helpful—that’s fine.

I offer my own toolkit of Blue Ocean–inspired methods because it is one set of options that my corporate clients, business-school students, and executive participants have found useful. It’s particularly useful in helping businesspeople pivot their thinking from a supplier-side view to a customer-side view, thereby stepping from the execution space into the innovating space.

The Built to Innovate (BTI) Seven-Step Innovating Process

The seven-step process I teach to my corporate clients is designed to be simple, generic, systematic, repeatable, flexible, adaptable, scalable, and visible. It’s designed so that anyone can use it to innovate, and it can work across a wide range of industries, business units, products, services, and functions. First designed and used in one of INSEAD’s flagship executive education programs in 2004, it has been continuously modified, updated, and improved ever since. It’s designed to work best when it is visible to everyone in the organization—for example, appearing on a corporate portal or as part of the standard training and development program offered to incoming employees. If you want the Seven-Step Innovating Process to produce the best results for your organization, make a point of ensuring that everyone hears about it and knows how to use it.

The seven practical steps in the innovating process are depicted in summary form in Figure 10.1. They include:

FIGURE 10.1 The BTI Seven-Step Innovating Process

1.   Choosing a subject for innovating

2.   Organizing the project team

3.   Codifying the supplier-side view of the subject

4.   Understanding the customer experience

5.   Exploring noncustomer space

6.   Selecting and fast-prototyping the best ideas

7.   Presenting and selling the best idea

Let me explain what is involved in each of these steps in turn.

Step 1. Choosing a subject for innovating. The first thing you need to begin your innovating journey is a direction, goal, or general objective. This is the subject about which you hope to innovate. It can be a product, service, technology, internal or external process, organizational function, business model, or perhaps something else that you feel is in need of improvement. The only core requirement for the innovating subject is a target customer—someone for whom you are aiming to innovate, whether this person is external to the organization or internal to it. As you’ll see, the goal of the innovating process is to improve the customer’s experience—which is why it’s essential to identify the target customer at the very start of the innovating process.

One important caveat, however: Don’t allow your choice of a subject to become a straitjacket. The innovating process is a journey of discovery, not a rigid exercise with a preordained conclusion. In the course of your team’s work together, it may well happen that you come across one or more additional subjects that are just as ripe for innovating as your initial subject—or more so. Feel free to shift your attention to them. The point is to find ways of creating new forms of value for your organization and for your customers, which frequently involves unplanned detours that lead to unexpected discoveries. Don’t reject these discoveries—embrace them!

Step 2. Organizing the project team. The second step in the innovating process is to organize the team of people who will participate in the innovating project. This includes two main tasks: selecting the team members and defining the shared goals, rules, roles, processes, and other requirements the members will need to fulfill.

When it comes to selecting the team members, diversity is crucial. This includes diversity in the demographic sense—choosing members of varying ages, genders, ethnic backgrounds, experience levels, and so on. It also includes diversity of thinking, work experience, and views of the business. Subject experts with special knowledge of technology, market dynamics, customer needs, or other topics that could be relevant to the innovating process may need to be brought on board.

People with little or no experience in your industry may also be important to include in the team. Their “naive” questions about deeply ingrained assumptions, norms, and beliefs may play a crucial role in helping the team behave in far more innovative ways than it might otherwise do.

Finally, be sure to include at least a couple of people who will have a role in implementing whatever innovative ideas the team comes up with. These individuals, who may come from departments like operations, production, logistics, and finance, will have critical knowledge of the practical challenges that are likely to arise, and they can help to ensure that the plans your team generates are as realistic as possible.

Once the team members have been identified, you’ll need to map out the ways your project team will work together. Take time to discuss and agree on the following preconditions:⁶

The shared and collective goals that will guide your work

The values you agree to honor (including, for example, transparency, reliability, and mutual respect)

The rules of engagement you will follow (regarding such matters as how decisions will be made and how disagreements will be handled)

The roles individuals agree to take on (such as leader, notetaker, coordinator, and devil’s advocate)—all of which may rotate from time to time

The processes you intend to use for communication and information-sharing

The commitments each team member will make to the group regarding the time, energy, and other resources they will contribute to the team effort

Innovating teams operate differently from most organizational groups. There is no “boss” telling you what to do, nor is there a specific goal preselected by the company leadership. Instead, the team is a self-organizing unit that depends on trust, openness, and mutual support to accomplish anything worthwhile. Discussing basic principles like those listed above will help to ensure that the work of the innovating team is both creative and productive.

Step 3. Codifying the supplier-side view of the subject. The next step in the innovating process is becoming clear about the subject for innovating as you see it today. This means defining the supplier-side view of the subject that members of your organization currently take as they operate the execution engine that dominates their daily work. The goal is to answer the basic questions: Who do we think our customers are? How do we think we are creating value for them and for our organization? For example, if the subject is a product, your supplier-side view will focus on questions like: What do we think are the drivers of willingness to pay for our target customers? How do we think customers feel about our product’s quality and its price?

Note that, at this point, your team members are not venturing outside of the organization for information to answer these questions. Instead, they are simply defining their own supplier-side view of the issues, based on readily available data. For example, if your subject for innovating is a product, you can refer to sales data, revenue trends, market share statistics, focus group reports, information about quality issues, and more. If your subject is a process or function, you can examine data on inputs and outputs, procedures and controls, cost, capacity, and other information collected from various stages of the activity.

Using all the relevant data and examining what they tell you about key aspects of the subject, jot down notes to capture all of the conclusions you reach. The result will be a written description that captures your present supplier-side mindset or mental model of the subject, based on your beliefs, assumptions, and biases.

Is this view completely accurate? Probably not—its weaknesses and errors will soon be discovered. You’ll have an opportunity to engage in some fresh, outside-the-box thinking in the upcoming steps of the Seven-Step Innovating Process. The purpose of step 3 is to first define the contours and size of the current mental box.

Step 4. Understanding the customer experience. Now it’s time for the team to pivot from the supplier-side to the customer-side perspective—to step outside the box and begin discovering what the outside world can teach you.

To do this, the innovating project team members must find new sources of information about the customer experience. Going beyond internal reports and analyses, the team members need to step out of the office and the workplace, going out into the field to meet and engage with real customers and other informants who are knowledgeable about the target customer’s experience. In-depth conversations should be launched that cover all the stages in the customer journey from the customer’s perspective.

If you are a member of such a team, you may find that your study of the customer experience expands to include activities that extend beyond those that are obviously related to your subject. Think, for instance, of the following scenario: a couple with young children goes shopping at a local furniture store. The experience soon turns into a disaster, as the parents have to spend their time chasing the excited little ones around the store to make sure they do not break any lamps and to stop them from jumping on the beds.

Unsurprisingly, the next time the parents need to go furniture shopping, they want to avoid bringing the kids along. But now they have a new problem to solve: Who will take care of the kids? The customer’s Job-To-Be-Done now includes finding a family member, friend, or babysitter before that customer can visit the furniture store.

If you were part of an innovating team working for a furniture company, you might not think about this challenge when considering the customer experience. The babysitting problem is not one that furniture customers are likely to mention to anyone from the furniture store they want to visit. Yet the Swedish furniture store chain Ikea recognized this problem—and solved it, by offering supervised on-premises playgrounds for children whose parents are shopping. In a similar fashion, Ikea also added coffee shops and restaurants to its stores, thereby solving other problems that are part of the customer experience (such as the need for nourishment and refreshment during a long day of furniture shopping), even though most customers would never expect a furniture store to address these problems.

How, then, can innovating teams in other industries make sure they discover “the customer’s babysitting problem”?

Here is a simple process innovating teams can use to make sure they succeed in hearing both the voice of the customer (the feelings, thoughts, and ideas that customers are expressing more or less openly) and the silence of the customer (the things customers may not be aware of or wouldn’t think to share with a supplier). The process includes three steps:

The team visually observes and interviews customers as well as other informants who are familiar with the customers’ experience and their Job-To-Be-Done. The team members should avoid imposing their own assumptions, beliefs, prejudices, or preferences on the customers. The team members are there simply to ask open-ended questions and to listen and learn actively and empathetically, never lapsing into either the “tell” mode or the “sell” mode.

Based on what they see and hear, team members write down what the customers seem to like, dislike, or wish for during their experience and while trying to accomplish their Job-To-Be-Done. It’s critical that these comments are transcribed in the language of the customer rather than being paraphrased or translated into supplier-side jargon.

The collected comments are then organized into categories that make it easy for connecting themes and ideas to emerge.

The best way to organize the comments your team collects is to use what I call a Customer Utility Table (CUT).

A CUT is a table in which the vertical columns represent the various stages of the customer experience—for example, searching for the solution to a problem, choosing from a set of options, buying a product, bringing it home, using it, and so on. The innovating team can create a working list of these stages based on its supplier-side view. Later, as they begin observing and interviewing customers, they can adjust, expand, and improve the list based on the deeper knowledge they are gaining, seeking also to fully capture the stages and activities that happen before and after the customer interacts with the supplier’s product or process.

The horizontal rows in the CUT represent various forms of utility that customers may need or want. I suggest that innovating teams start with the six generic forms of utility as listed by Kim and Mauborgne for the diagram they refer to as a Buyer Utility Map—namely, Customer Productivity, Simplicity, Convenience, Risk Reduction, Fun, and Environmental Friendliness. The team can modify this list of “utility levers” based on the specific innovating subject and the industry or business context.

When the vertical columns and the horizontal rows are combined, the result is a CUT table that subdivides the universe of the customer experience into a finite number of cells, each representing the intersection of one stage in the customer experience with a particular utility lever. This makes it easier for members of an innovating team to interrogate that entire universe in search of possible places to create new and better ways of creating value. The CUT table offers a simple way of organizing the comments gathered during the visual exploration process. As team members go out into the field and bring back notes based on what they hear and see, the CUT gets filled up with comments, each assigned to an appropriate cell in the table.

I suggest that teams use sticky notes for each comment they collect, color-coded to represent different types of comments: blue for things customers like, red for things customers dislike, and green for things customers wish for. Later, it may be convenient to record them in a printed table or spreadsheet in which the comments are captured and organized by cells.

The evolving CUT, filled with comments in all three colors, constitutes a simple, intuitive, scalable, and fine-grained visualization of what the customer experiences while trying to accomplish the Job-To-Be-Done—all expressed in the customer language and from the customer point of view. As more comments are added, the CUT continues to grow and change. Its appearance helps the team members identify which cells they want to explore more fully during the next round of observations and interviews; cells with few or no comments are those that may demand fuller investigation.

Here’s a metaphor that can help you understand the value that a CUT brings to the members of an innovating team. Imagine that a precious diamond has been hidden somewhere in an open field—a field that is covered with long, uncut grasses and tangled weeds. A team of individuals has been given the opportunity to find the diamond. If they discover it within a specified period of time (say, one hour), they can keep it and share its value.

What’s the best way for the team members to maximize the chance that they’ll find the diamond? The answer: to use a grid to divide the field into a number of distinct sections, each relatively limited in size—then assign team members to scour each of those sections. This method will ensure that no corner of the field goes unexamined.

The CUT table plays the same role for the members of an innovating team. By dividing the space for exploration into distinct, smaller units, it greatly increases the chances that the precious diamond of a brilliant innovating idea will be discovered—no matter where in the customer experience space it may be hidden.

Turning the comments collected in the CUT table into possible innovating ideas is a fairly straightforward process. A blue comment that reflects something customers like can suggest ideas about how to increase, enhance, or expand on that source of value. A red comment that describes something customers dislike can suggest ideas about how to fix the problem. And a green comment that names something customers wish for can suggest ideas about how to satisfy that wish.

It’s hard to overstate the value that in-depth observation and interviewing of customers can have for teams trying to generate useful innovating ideas. Let’s recall a couple of real-life examples to show how this works.

One is the story from Chapter 6 of the Starwood managers who spent a day roaming the neighborhoods of Paris in search of inspiration for new ideas they could use to revitalize their hospitality business. It was during such a visual exploration that an innovating team from Sheraton Hotels came up with the idea of selling hotel beds as a business. You probably won’t be lucky enough to take your innovating team on a trip to the beautiful French capital! But practically everyone can have access to environments that are equally stimulating where it is possible to observe customers in their usual settings and thereby get access to reactions and comments that might otherwise never be observed.

A second example comes from the story of Kordsa, the Turkey-based manufacturer of reinforcing materials. As mentioned in Chapter 4, Kordsa has sent innovating teams into the factories operated by their corporate customers, literally camping out for days at a time to observe what is happening and to talk with employees about what they see. At one tire plant, they noticed that workers were struggling to safely handle rolls of reinforcing fabric that had been loaded onto trucks. The innovating team members realized they were glimpsing a customer problem that Kordsa had never been aware of. Kordsa was subsequently able to remedy the problem by developing a simple, improved method for handling the rolls of fabric and training their customers to use it, reducing the resources needed from 90 minutes and three employees to 12 minutes and a single worker.

Step 5. Exploring noncustomer space. In step 4, the innovating team pivoted from the supplier-side view to the customer-side view. Now in step 5, it’s time for them to think even further outside the box, exploring noncustomer space in search of other innovating possibilities. The Six Paths Analysis, a tool derived from the Blue Ocean Strategy approach, offers a specific tool for doing this. It lists six new directions for development that your company can consider to break away from its current framing:

Path 1: Across Alternative Industries or Solutions. Let’s define the existing customer space along the two dimensions of the target customer and the specific Job-To-Be-Done by the target customer. The resulting noncustomer space, then, includes any space outside your organization’s current boundaries on either of these two dimensions. Fiskars, for example, stayed focused on its target customer (home gardeners), but explored what other Jobs-To-Be-Done it could help with. That’s how Fiskars decided to enter a new industry—the watering and irrigation business.

Path 2: Across Customer Groups or Segments. In other cases, companies seek out new sets of customers they can serve with the same Job-To-Be Done. For example, Nintendo built a successful business around its blockbuster Game Boy video system, which targeted boys as well as solitary and hardcore gamers—a significant segment of the gaming universe, but one that left out many other potential customers. In time, Nintendo found innovative ways to expand its market—first by creating a new Game Boy version designed to appeal to girls, then by launching the Wii game system, which targets occasional gamers, groups of friends and family members playing together, and even elderly patients in nursing homes.

Path 3: Across Actors in the Company’s Business Ecosystem. A company’s ecosystem includes not just the target customers but an entire network of organizations involved in the delivery of the product or service to the customer, from suppliers and intermediaries to influencers, prescribers, regulators, complementors, and government agencies. Sometimes a company can find ways to create new value for customers by working with one or more organizations in this ecosystem. Remember, for example, how Recruit’s CarSensor division—a business-to-consumer media business that provided information about used cars—created a whole new business by creating a business-to-business platform that matches upstream companies with supplies of used cars with downstream companies that need to purchase such cars.

Path 4: Beyond the Scope of Activities in the Customer Experience. The columns in the CUT table delineate the scope of activities in the customer experience. Yet as we’ve seen, observation and interviews will help to reveal activities that precede or follow the customer’s direct engagement with the company’s product or process. Ikea, for instance, created new value for customers by solving a problem they faced even before going to the furniture store.

Path 5: Across Sources of Appeal, Functional or Emotional. The CUT table can help the innovating team determine how they are trying to appeal to the target customer. The collected comments in the table may reveal a dominant focus on either functional appeal or emotional appeal—in which case the team may choose to explore the opposite source of appeal or a different type of functionality or emotion. Ecocem, for instance, took advantage of an underused technological innovation—ground granulated blast furnace slag (GGBS), with a much smaller carbon footprint than conventional cement—and used it to add the emotional appeal of environmental friendliness to the traditional functional appeal its products offered.

Path 6: Across Time and Trends (the “Back to the Future” Analysis). An innovating team can explore noncustomer space by imaginatively stepping into the DeLorean time machine and traveling 3, 5, or 10 years into the future. What trends or changes—environmental, technological, political, cultural, social, economic, or demographic—have changed the customer’s world? After examining these forces, the team can return to the present and consider ways of anticipating and responding to those trends. An innovating team I coached from a bank in the United Arab Emirates worked backward from the future needs of the children of its wealthy clients. To create value for these future customers and win their loyalty, the team members proposed to organize college tours to prestigious US universities, help the students prepare their college applications, and even arrange a group trip to an international soccer match for them to enjoy.

The Six Paths Analysis in step 5 is a great way to develop innovating ideas to complement those generated during step 4.

Step 6: Selecting and fast-prototyping the best ideas. You now have a huge collection of innovating ideas, generated by your immersive study of customers and of the noncustomer space. Now it’s time to select the best of these ideas for possible implementation.

First, the team needs to take a step back, review all the ideas it has generated, and cluster them together. Similar ideas—those that seem to be connected or interdependent—can be aggregated under one cluster, for which the team creates a catchy tag line. The one or a handful of these clusters must be chosen to present to senior management for possible further development. Sometimes the team can easily choose the best idea; in other cases, it’s harder to identify the most promising option. To facilitate this decision, the team can rate the idea clusters on three dimensions:

The potential value created by the idea for the customer and for the company (i.e., the Value Test from chapter 2)

The idea’s potential strategic impact

The idea’s likely ease of implementation

The ideas that rate best according to the combined impact of these three factors will be the ones that move to the next phase, which I refer to as fast prototyping. It’s a process that helps to “crash test” and roughly validate the potential for success of the team’s top ideas. As Tom and David Kelley of IDEO explain, “The reason for prototyping is experimentation—the act of creating forces you to ask questions and make choices. It also gives you something you can show to and talk about with other people.”⁷ Many preliminary prototypes fail, which is actually a good thing—when an idea’s weaknesses are revealed early, it prevents the waste of time and money as well as potential embarrassment in front of senior leaders.

Creating prototypes for the best idea clusters need not be an elaborate process. It can be as simple as developing a storyboard, poster, group role-playing skit, or homemade gadget to illustrate how the idea might work in real life. The prototype should not be designed to look pretty but simply to highlight the distinctive value the new idea might create for the customer.

Step 7. Presenting and selling the best idea. In many organizations, the Seven-Step Innovating Process is carried out in parallel by a number of teams from various business departments or functions. The result is a big assortment of innovating ideas that could be implemented, from which the organization’s senior management must choose one or a few winners. One very effective method for carrying out the selection process culminates in an activity known as a Visual Fair.

The Visual Fair is a kind of “beauty contest” that enables one or more winning ideas to be selected from among those generated by the project teams. On an appointed day, using a simple, standard format, each team presents its top ideas to a select panel that might include executive committee members, senior business unit leaders, relevant midlevel coaches, and I-Team members. The presentations should focus on just a few key points: the nature of the new idea, briefly described; the new value created for the target customers; the new value created for the company; the sources of the idea (including, for example, quotes or insights gathered during the CUT and the Six Paths Analysis). It’s very helpful to have a standard presentation format that everyone knows about within the organization.

After a series of short, focused presentations, the Visual Fair may move to a gallery walk, where images and texts depicting the new ideas are displayed for everyone to study. Snacks and beverages may be served, creating a festive atmosphere and a mood of anticipation. After the panelists have had a chance to confer privately, they announce the winners for this Visual Fair—a set of ideas that will be handed over to the execution engine for final testing and implementation by the organization.

Ways of Using the Seven-Step Innovating Process

The Seven-Step Innovating Process is designed to be easily replicable. Many organizations like to conduct the process on a regular basis—once or twice a year, for example. The result is a regular stream of innovating ideas that can become the source of significant new value for both the company and its customers. Some organizations make the CUT tables developed by their innovating teams available on a digital platform, creating an extraordinary device for organizational learning and a rich knowledge base concerning the customer experience. Even more important, employees gradually internalize the activities of the innovating process as well as its underlying principles. Innovating becomes second nature throughout the organization, even when the formal process itself may not be under way.

The flexibility of the Seven-Step Innovating Process means it can be used for a variety of purposes. For example, there are times when an entire organization is badly in need of a strong dose of innovation. Technological changes, marketplace shifts, aggressive moves by disruptors, or sheer inertia may have left an organization at a competitive disadvantage. When this happens, the senior leadership team may choose to put together an innovating team to help look for an entirely new market space, disruptive blockbuster product, or new business model for the organization. The seven-step process can work effectively for this purpose. You might compare this use of the process to a team of athletes competing in the Olympic Games—a major effort with ambitious, world-class-level goals.

Alternatively, a midlevel coach in any department of an organization can choose to implement the seven-step process whenever it seems useful to jump-start the innovating spirit. In this case, the process can be tailored to pursue less lofty though still important goals, such as finding ways to improve a specific product, to enhance customer service, or to streamline one or more internal activities. The process can also be used within a company department on a regular basis—once a year, for example—to identify a range of opportunities for innovating.

This use of the process could be compared to the daily or weekly exercise routine that a health-conscious person follows to stay fit and develop muscle mass. When employees use the seven-step process repeatedly, they find that their “innovating muscles” become strengthened. Ideas for improving the business seem to pop up routinely, and the path to developing and implementing them seems easier and more natural than ever before. This is a fundamental benefit of using the Seven-Step Innovating Process as part of your company’s regular behavior, thereby embedding innovating into your organizational DNA.

The Reframing of Marvel Studios as Seen Through the Seven-Step Innovating Process

The Seven-Step Innovating Process can be a powerful way to inculcate innovating behavior throughout an organization. The examples I’ve mentioned from the experience of companies like Ikea, Starwood, Ecocem, Fiskars, Kordsa, Recruit, and Nintendo illustrate how it happens. But the ideas underlying the seven-step process and its associated tools can also generate valuable innovations even when the formal process is not explicitly used.

To show you what I mean, let’s see how some of the innovative tools from the seven-step process can illuminate the steps that Maisel and Feige used to jump-start innovation at Marvel Studios.⁸

First, the Marvel Studios team created superior value for its target customer and for the company by making a series of decisions about ways to bring greater perceived value to moviegoers—all growing from the core strategy of building pictures around the uniquely human qualities of the Marvel superheroes. Team members focused on emotion-laden storytelling, since this was at the heart of the Marvel comics appeal. They built a process, including the Marvel Creative Committee, to safeguard the integrity of the Marvel characters from one film to the next, to ensure that fans will never feel betrayed by a discordant scene or characterization in a Marvel movie.

At the same time, they made critical decisions to reduce their cost structure. No more fancy production offices and no need for redundant layers of middle management oversight, which would add nothing to the richness of the story lines or the uniqueness of the Marvel characters—and, in fact, might simply discourage the creativity of the Marvel moviemakers by increasing the level of financial risk they faced. The team also chose not to rely on overly expensive proven box-office talent, since the superheroes themselves, not expensive marquee names, would be the real attraction to audiences.

In all these ways, the Marvel team members responded to what they learned by studying their existing customers and making choices that improved the level of value created for those customers.

The Six Paths Analysis further illuminates the creative thinking behind Marvel’s success. Marvel Studios broke the mold of traditional superhero filmmaking by leveraging two paths to market from step 5 that other studios had neglected. Team members journeyed across customer segments by developing movies that appealed to a much broader array of customers than the adolescent comic-book fans, mostly male, who constitute the core audience for traditional superhero movies. The team achieved this, in large part, by shifting across functional and emotional appeals. Rather than relying mainly on the forms of value delivered by most superhero films—plenty of high-speed, often violent action and eye-popping special effects—team members crafted stories that included complex character arcs, subtle emotional conflicts, and political and social overtones.

Because Marvel chose these two paths from the Six Paths Analysis, movie lovers who don’t usually care for comic-book stories, including women and older adults, found themselves drawn to the Marvel films. Even the critics and movie industry gatekeepers have been impressed. Marvel’s movies have earned an impressive average approval rating on the Rotten Tomatoes website of 84 percent, and they’ve garnered an average of 64 award nominations apiece.⁹ Marvel Studios has managed to open up a new market space for superhero movies, reaching viewers that other studios creating films in the same genre have only been able to dream about.

Continuing to Innovate: Marvel’s Future

At the end of 2009, Marvel was acquired for $4.2 billion by Disney. At the time, the reframing of Marvel Studios’ movie business had just begun. But the transfer of ownership didn’t derail the process. Since its founding in 1923, the Walt Disney Company has been famous for its unique brand of commercially successful entertainment innovation. It seems clear that it recognized the fact that the newly minted Marvel Studios team was developing a formula of its own that could deliver blockbuster hits with remarkable regularity.

In this respect, the Marvel acquisition strongly resembles another Disney purchase, that of Pixar Animation Studios in 2006. Pixar is perhaps the only other movie studio of recent years with a track record of innovation comparable to Marvel’s. As of 2021, Disney is deploying both of these formidable assets—along with its ownership of such other prized franchises as the Star Wars saga and, of course, its own storied catalog of animated classics—to enable its new streaming service, Disney+, to compete against the likes of Netflix and Amazon.

Meanwhile, Marvel Studios has become a mainstay of its parent company’s financial success. In 2019, Marvel’s biggest hit, Avengers: Endgame, generated fully 15 percent of Disney’s total revenues of $69 billion.¹⁰ And Marvel Studios president Feige is promising more hits that offer a continuing stream of creative innovations. “We’ve got another 20 movies on the docket,” he has boasted, “that are completely different from anything that’s come before—intentionally.”¹¹

Still, consistently cranking out Hollywood hits, even according to a proven formula, is far from easy. A group of business experts who analyzed how it works described the reality this way: “Just making a movie successful enough to support a franchise is hard: Six of the eight worst-performing big-budget films in 2017 were meant to start new franchises” (emphasis added). They went on to quote no less an expert than Jon Favreau, director of Marvel’s own Iron Man, on the elusiveness of long-term success for action movie franchises. “It’s very difficult to keep these franchises from running out of gas after two [movies],” Favreau said. “The high point seems to be the second one, judging by history.”¹² With 23 movies from the Marvel universe so far, one could be forgiven for thinking that this franchise might be running on borrowed time.

The time will surely come—sooner or later—when Marvel Studios finds that its brilliant formula for movie success is beginning to run out of steam. When that happens, the leadership team will need to consider yet another innovative reframing. They may choose to use an innovation methodology like the one presented in this chapter. Such a systematic process can make it easier for any team of employees at any organization to begin generating, vetting, and perfecting valuable new ideas to fuel the innovating engine.

* A more detailed explanation of the Seven-Step Innovating Process and its associated tools can be found on the website www.BTIthebook.com.