Relevant BEANs

In the beginning of the innovation journey, curiosity and customer obsession are paramount. Let’s look at BEANs that encourage those behaviors. Full BEANs appear in table 5-1; partial BEANs appear in table 5-2.

Danfoss

MAN ON THE MOON

How do you encourage curiosity? The natural inclination is to seek to remove constraints so that people can think of new and different things. Paradoxically, research shows that constraints encourage creativity.¹ Danfoss is a Danish industrial company that engineers solutions for food-cooling and for heating and air-conditioning in buildings. Its annual Man on the Moon competition seeks proposals from all employees for the creation of an entirely new line of business, the creation of a business adjacent to current lines, or the improvement of an existing business, through either a five- to ten-fold performance improvement or a more than 50 percent cost reduction. Taking the time to identify a theme around which the proposals must revolve focuses the creative energies of Danfoss’s 28,000 global employees and increases the chances of developing something different that creates value. The collateral that surrounds the contest helps reinforce curiosity, with the prize itself serving as a critical artifact. Winning teams get a three-week trip to MIT plus six months after their return to develop the project. An example idea that emerged from the competition is predictive maintenance, which allows Danfoss to predict a forthcoming breakdown and perform preventive maintenance. Danfoss design manager Michael Qvortrup described the idea as “clever, novel, and easy to implement.”

Google

BUREAUCRACY BUSTERS

In 2009 Google started a program called Bureaucracy Busters. It shares many components with Danfoss’s Man on the Moon BEAN but focuses on day-to-day frustrations. Googlers are asked to identify areas where unnecessary bureaucracy hinders performance and then to develop innovative ways to bust that bureaucracy. Google crowdsources votes and commits to implementing the most popular suggestions. The fact that the first time Google ran the program, 500 ideas were submitted that generated more than 50,000 votes suggested that Google had indeed identified a category of problems worth solving!

MetLife

LUMENLAB WALL OF CUSTOMERS

Customer obsession aids in the discovery of innovation opportunities by developing an intimate understanding of problems that matter (or what we call “jobs to be done”) to current and prospective customers.²

In 2014, life insurance company MetLife opened a new innovation center in Singapore called LumenLab.³ When you would step off the elevator on the twenty-first floor of the Metropolis building in Singapore and enter the LumenLab, you would immediately enter the world of regional customers. You would see artifacts reminding of you of day-to-day life in Asia, such as a rickshaw that remains a popular form of transport in emerging markets. Visual profiles of customers would hang on the wall, serving as quiet nudges to take a customer-first perspective. New visitors would often watch short videos to immerse themselves in regional customers’ perspectives. For example, one video would show an elderly Japanese man making lunch with his son. The son asks the father to go to the supermarket. The father gets lost and sits on a park bench until the son finds him. The father is very upset, as he does not want his condition to impact his child. MetLife sells insurance, but the vignette shows the importance to aging consumers of avoiding feeling like a burden to their children.

To further drive customer-centricity, LumenLab had a ritual of starting meetings either by projecting a photo of the target customer on the wall or by drawing the customer, with meeting attendees empowered to intervene when the discussion drifts away from the customer. LumenLab also taught team members to use verbs (describing what the customer is doing) versus nouns (describing what the customer is).

Partial Beans

Up until now, we’ve generally spoken about BEANs as though they most contain all three components to have impact. While full BEANs are the most robust, partial BEANs can also be powerful. For example, Optus is a fully owned subsidiary of Singtel, Asia’s largest telecommunications company.⁴ Its Close-Ups program has had thousands of workers participate in customer close-ups, where they spend an entire day in a store with the customer relations team. The program includes spending time as a shopper, making purchases, shadowing sales reps, and having direct interactions with customers. It helps employees develop deeper empathy with customers and eventually question the underlying assumptions they have about the business.

If you work at HubSpot, a leading digital marketing company, and are curious about a particular book, you are in luck! Any employee can request any book (within reason) by submitting a form, and HubSpot will send them an electronic version or hard copy of the book for free within a week or two. There is no need to seek approval or submit expenses.⁵ This is an easy way to encourage continuous learning among employees.

Semiconductor giant Qualcomm has two interesting rituals to help groups open their mind before they brainstorm. The first is a program called My Pain Points. At the start of user-experience meetings, the floor is given to anyone interested in talking about an article they read or a pain point they have, whether it be personal or work related. The second is called Stumping Google. During creative meetings, teams play a game in which they work together to come up with a search engine query that returns limited results.⁶

BEAN Booster: P&G’s Consumer-Is-Boss Movement

Procter & Gamble has a long and proud innovation history. Founded in 1837 in Cincinnati, Ohio, by candlemaker William Procter and soap maker James Gamble, the company built entire product categories based on brands such as Tide laundry detergent (branded Ariel outside the United States), Pampers disposable diapers, and Swiffer quick-cleaning products. It has also driven industry-changing business-model shifts, such as mass-market advertising, branded television (it created the first “soap opera”), and brand competition within a category. The company is widely considered a paragon of consumer-centricity, where marketers marry fine-grained market understanding with the output of 9,000 scientists to continue to drive growth through innovation.

In the 1990s, however, it seemed the company had drifted away from the consumer. A. G. Lafley, who served as P&G’s CEO between 2000 and 2009 and again between 2013 and 2015, played a pivotal role in bringing consumer-centricity back to P&G. Lafley joined P&G after graduating from Harvard Business School in 1977. After a series of successful roles in North America, he moved to head up P&G’s operations in Japan in the mid-1990s before returning to headquarters in 1998. What he saw surprised him.

“What I saw at my company very clearly in 1998 was that we were all so busy every day,” he told us. “We had our ears in our cell phones; we had our heads in our BlackBerrys and PDAs; we were consumed in meetings of all kinds. When you thought about it, where was our behind? Our face was internal, and our behind was right facing the customer.”

Soon after taking over as CEO in a surprise move in 2000 (predecessor Durk Jager lasted less than two years on the job), Lafley and his team launched a multifaceted effort to reorient the company. He introduced the effort using a stump speech that would go something like this:

Ladies and gentlemen, I would like to introduce you to your new boss. You might think that I, your CEO and chairman, am the boss. I am not. You might think the board of directors, which can hire and fire me, is the boss. They are not. You might think the shareholders, which pick the board of directors, are the boss. They are not. You might think your day-to-day manager is the boss. She is not. We have one and only one boss that matters: the consumer. The consumer is boss. The decisions they make every day to choose our products, to use our products, or not, are the decisions that will make and break our company. So, we have to invest to understand our boss more deeply than we ever did before.

Consumer is boss. Anne Lilly Cone, an up-and-coming market researcher, was tasked with running a pilot intervention in one of P&G’s divisions. “Despite the career benefit to me,” Lilly Cone reflected, “I was initially reluctant, as there had been a longstanding culture history of leadership indifference to consumers in that part of the business. But I quickly became convinced of AG’s and others’ strong support of the work ahead for my team.”

The essence of the pilot was to radically increase the amount of time that executives spent in the market with consumers. In classic P&G fashion, it was rigorously organized, with orchestrated (but not staged) market immersions followed by structured debriefs run by a skilled facilitator. The pilot eventually became the cornerstone of a company-wide effort called “Living it. Working it.” In this program, everyone at P&G, from Lafley on down, would regularly go out and spend time with consumers in their natural environments, observing them as they went about tasks in their homes, shopping with them, working with them, and, in some cases, even living with them.

Reflecting on the journey, Lilly Cone offered three lessons. First was the management mandate. “Leadership provided a crystalline focus that people had never heard before with such consistency, over a significantly long time.” Second was leadership role-modeling, with “no exceptions and no excuses.” Finally, was the relentless prioritization of the work: “Monday a.m., not Friday p.m.”

Today, if you step into a P&G office anywhere in the world, you are regularly greeted by the consumer, in the form of larger-than-life pictures on walls.⁷ You can feel the consumer in each and every discussion. The company, like all companies, has had its ups and downs, but the consumer-is-boss effort certainly left a lasting mark.

Case Study: Sir Chris Goes to School

In the year 2019, when your calendar tells you that you are visiting a military installation, you plan to give yourself extra time to get through the inevitable layers of security.⁸ You think carefully about your outfit and how it will fit in with the military garb. But if that military installation is the jHub, prepare to be surprised. Because instead of ending up at the edge of a base, your destination is a coworking space in the middle of a hotbed of startups in London. Lunch is delicious Ethiopian food from a sprawling street market around the corner. The people are dressed utterly normally (although the persistent nicknames and clipped speaking tone does betray the military connection). The tools they use and the processes they follow, rooted in concepts like user-centricity and rapid iteration, would feel familiar to innovation practitioners. And their office looks like, well, the sort of thing you’d see in any innovation outpost.

Team members start rattling off ideas they are working on that have the potential to save taxpayers significant money or save soldiers’ lives through the leveraging of some combination of data analytics, visualization, artificial intelligence, machine learning, autonomy and robotics, blockchains, modeling and simulation, quantum computing, and behavioral science. Team members can barely contain their enthusiasm as they describe how, in their short history, they have investigated 585 opportunities, rapidly evaluated 190 specific ideas, deep-dived on 40 of those ideas, piloted 6 of them, and delivered 2 into the hands of end users. One jHub member describes a project in which a technology called Dataminr provides indicators and warnings of major events on social media before the news hits mainstream media. This capability would clearly be valuable for the military. “Dataminr was the most professionally satisfying moment of my life,” the project leader said. In a previous role within the military, she found it hard to have similar impact. The jHub approach allowed her to quickly give dozens of users access to the solution, and, within six months, 360 people were using the system daily.

“This is my dream job,” one team member announces. “Ever since discovering it, I have been trying to get into it because it is frigging awesome.”

Step back to 2011. That year, the United Kingdom’s Ministry of Defence announced plans to add a fourth branch to its military: the Joint Forces Command (JFC). The JFC houses enabling capabilities common to the army, navy, and air force, such as information services, cybersecurity, and medical services. In essence, it leads areas common to all three branches. In 2013 it reached full operating capability with 30,000 military and civilian personnel. Sir Chris Deverell, a four-star general with three decades of military experience, served as the JFC’s third head from 2016 to 2019. As he came to grips with the organization and began to formulate his strategy, he decided to make innovation one of its pillars.

Deverell notes that, during his career, he had seen how “increasingly difficult it was to deliver new capability or new functionality into the hands of users,” driven by a “system that has evolved to reduce risk and over insures against that problem to the detriment of time, cost, and often performance. The longer you take to do something, the more you have to compromise the performance in order to deliver it. Because time costs money.”

The guiding principle of Deverell’s strategy was “through innovation, integration, and information, we would deliver advantage for the Joint Forces. Those were the mechanisms we would use to release the latent ability in my organization to deliver benefit to the Joint Forces.”

Clearly, the jHub ran against the grain of the military establishment. Fortunately, in Deverell, it had a leader who was willing to draw inspiration from places outside the military.

“My sources of understanding could broadly be characterized in four ways: subordinates, peers, superiors, and external sources,” he said. “I think most senior people in defense work on the assumptions that most of their understanding comes from their subordinates and their superiors, and they don’t seek to look to the outside to the degree I did in this case. I think it’s maybe because people are not convinced that the outside world can tell us very much because we’re so different. That’s nonsense. Most of the problems and issues we face organizationally, you would find them everywhere. It is just that we don’t know what we don’t know. The only way you resolve that is by actively looking externally.”

As a tangible example of this commitment, in 2013 Deverell enrolled in a program at London Business School. “I believe no one from the defense community had ever done that before,” he said. “Of all of the education I have had, this was the most valuable. One of the big things it taught me is there is so much in common between large organizations everywhere. We tend to think in defense that the way to get external insight is to hire consultants. At some level that can be necessary, but it can become a substitute for thinking through what you are trying to achieve and trying to do it yourself.”

The core influence for the idea of the jHub came from the 2014 Innosight-authored article “Build an Innovation Engine in 90 Days.” Deverell said the article’s premise that a small team could rapidly advance innovative ideas was intriguing. “In defense, the notion of trying to do anything without battalions of people was so strange,” he recalled. “But generating battalions of people in defense is so hard that I was particularly attracted to the fact that the model claimed it could be done with a small number of people. And, indeed, that’s been borne out by how we have operated. We have always had a core of five to six people that we have reinforced with secondees from the business. That model, the small-team approach, has been fundamental to our development.”

Deverell retired from the military in 2019. His curiosity and willingness to draw on external perspectives gives the jHub a chance to drive lasting change in the UK military.

Case Study: Discovering Opportunities in Bangladesh and Philadelphia

The epigraph of lean-startup-godfather Steve Blank’s 2013 book The Startup Owner’s Manual (with Bob Dorf) says it all: “Get out of the building!” Large organizations are used to relying on desk research and consultants to identify market opportunities, but the search for innovative business ideas has to come in or close to the market. As the famous British spy novelist David John Moore Cornwell once quipped, “a desk is a dangerous place from which to view the world.”⁹

Imagine a sales rep for an agrichemical company trying to introduce a crop-protection chemical to eradicate weeds in Bangladesh rice farms. Here’s the way a typical conversation between a sales rep and a farmer would go:

Rep: Sir, I’d like to tell you about a new product that can remove weeds from your farm.

Farmer: But I already have a way to remove weeds. When it is harvesting time, I hire day laborers for two weeks. They remove all of weeds. Does your chemical work better than my workers?

Rep: Well, it doesn’t take as long. But I can’t say that it removes more weeds than your workers.

Farmer: Well, at least I assume it must be cheaper than my workers?

Rep: Well, actually … the first use is going to cost more than the laborers. But by the time you get to the fifth season you have paid ba—”

Farmer: Five seasons? Five seasons! Who knows what I will be doing five seasons from now. Bah! This chemical you offer—is it easy to use?

Rep: Well, that’s another thing. It takes some time to learn how to use it, but we offer a special training program that is free for you and …

You can see this conversation isn’t going to lead to a sale. However, spending time in the field on the farm led the company to realize there was another way into the market. While the farmer himself didn’t have a problem that needed to be solved, his wife did. She found the harvest period to be brutal. She had to look after a dozen day laborers, which meant waking up at four in the morning to prepare breakfast for them and then cleaning up after them. When the company described something that would remove the need to hire the laborers, she was all for it. And since she managed the household finances, she understood that this also was a positive long-term investment for the family. So the company began organizing “farmer’s wife circles” to discuss the benefits of its product. Adoption took off. Curiosity and customer obsession led to a significant innovation opportunity. The moral of the story? If you don’t go, you can’t know.¹⁰

Let’s now move from the farms of Bangladesh to the streets of Philadelphia, and from agrichemicals to music education, to reinforce the power of grassroots market understanding. In 2010, Helen Eaton became chief executive officer of the Settlement Music School. Founded in 1908, Settlement historically provided classes, primarily for children, in classical music and jazz. It had six physical branches in the Philadelphia area. In 2012, Eaton, an accomplished musician who studied at the prestigious Juilliard School, wondered if it was time to change Settlement’s tune. Like many arts nonprofits, Settlement found its financial situation had not fully recovered since the 2008 financial crisis and resulting recession. Further, changing demographics and emerging technologies suggested to Eaton that Settlement needed to simultaneously return to its roots and rethink its model.

“I was working to uncover what mattered most to our legacy institution—a value I could honor as the new CEO following a leader with a thirty-year tenure and a value I could build upon. What emerged was authentic to our community, pervasive throughout the institution, and deeply encouraging for me—and that was the concept of service,” Eaton said. “There was a core value around service at Settlement Music School—service to our families, service to our teaching artists, and service to our community. At the heart of service is responsiveness to what our constituency really needs from us, and that responsiveness created the foundation for us to innovate.”

Eaton formed a small team, engaging faculty and staff at all levels and tenures to explore new areas, such as smart solutions for sustainability and growth and how community arts changes lives. The team received two days of training from a group of Innosight consultants and then went into the field to interview prospective customers about what offerings might enrich their lives. One team member observed a recurrent theme: a desire for adults to reclaim their youth, meet new people, and dust off that guitar they stopped strumming in college. What if, he wondered, they created some way for adults to jam together in a band? The team drafted a three-page brief outlining a rough picture of the idea, which would ultimately become known as the “Adult Rock Band” class. The idea was that a group of likeminded adults would come together and practice under the tutelage of an expert instructor. The class could continue indefinitely, separated into ten-week sessions, at the end of which the band would hold a concert in the school’s performance space. As one instructor said, “There’s something good for the soul about strapping on the old Fender and banging out a few Jack Bruce lines.”¹¹

Settlement piloted the idea at a single branch and then expanded to two more, learning in the process that it needed to fine-tune classes to the context of each local community. As it continued to experiment with Adult Rock Band and other ideas—such as a monthly community drumming circle, choirs for seniors at community centers, classes that merged arts and physical or mental therapy, and parenting classes through music at family shelters—a broader strategic shift came into focus. Settlement would reposition its traditional physical locations to become broader community hubs. It would also work with other local providers to bring broader populations in the Philadelphia area access to music instruction. The shift inspired dramatic growth in partnerships, which quintupled over time, dramatically boosting Settlement’s revenue and strengthening its balance sheet. The spirit of collaboration and inventiveness led to a first-of-its-kind collaboration with institutions across the city, catalyzed by a grant from the Andrew W. Mellon Foundation.

Eaton’s curiosity helped Settlement find new ways to deliver against its mission to provide the highest-quality arts education to everyone. And that mission helped Eaton to secure donors and other key stakeholders who were motivated to continue the innovation journey.

“I keep reminding our donors, our board members, and the foundations that, at the end of the day, it’s all about the kids. That seems to have really helped,” Eaton said. “I tell them, ‘This is what Settlement has traditionally done, but we can have an even greater impact and address much bigger issues that are happening in this city. We can really work towards disrupting the cycle of poverty, and here’s how we can do it.’ And I give them lots of metrics and ensure they we are partners through the process.”

Today students range in age from six months to ninety-five years. In 2016 Eaton was named a “Top 30” innovator by Musical America Worldwide, and in 2018 influential blog Charity Navigator named Settlement one of the top ten music charities in the country, as it worked to preserve and expand music education and access to the musical arts.

Eaton described the journey as a “rollercoaster ride,” with “moments of great highs and lows, moments where you are certain about what you are doing, and moments where you question everything.” She traces Settlement’s success to rigorously maintaining curiosity and customer obsession. “We understand our audiences better, because we are asking the right questions and responding thoughtfully. This has all led to the organization’s capability of doing even greater and more impactful work, and so we become more ambitious, and the journey continues.”

Settlement’s new capabilities proved vital as COVID-19 crisis unfolded in early 2020. Within two days of local lockdowns, Settlement was ready to provide high-quality virtual learning, with a clear plan and guidelines for families translated into four languages. It trained 170 faculty in distance learning, allowing it to quickly engage with students and launch free classes to raise its local visibility. In essence, Settlement was able to quickly open its seventh branch: a virtual one. Eaton shared the following with her board: “In the face of a global health pandemic, some may wonder—why care about community arts? And we say: Care because it is what lifts our souls. Our shared belief is that the best thing anyone can do in a crisis is to be productive, achieve something. We are the people who believe that the act of doing, of practicing, of reaching goals, will be what gets us through this time with our spirits intact.”

Reflecting on her decade at Settlement, Eaton offered the following advice to leaders looking to embrace innovation in their organization:

Identifying something that is authentic about your institution—in our case, service—and celebrating that in all of its different forms is easy when you are a good listener. Customers (our families), employees, and volunteers want to be heard, and the CEO can be that person if you go into the work with the intent to truly listen and change as a result. That is the easy part. The hard part is when your ability to innovate is so directly tied to people outside your own organization who may not have had their ideas, hopes, and dreams nourished in the same way. At Settlement, we do our most innovative work through community partnerships and collaborations outside our own doors, and those inherently bring in new people with whom we have never worked. The theories, the ideas, the concepts, they all work, no matter how large or small your organization. They are motivating and inspiring. It requires patience and dogged determination coupled with a dose of reality when something is really just not going to take off.

Tool: Curiosity Quotient

How curious are you or your team? There are seven ways to display curiosity in an organizational context:

1. Customer intimacy:  Seek to know your customers—not just as numbers but as living, breathing humans.
2. External orientation:  Take “idea road trips,” bring in outside speakers, and use other mechanisms to get external stimuli.¹²
3. Idea sourcing:  Seek ideas from everywhere, including customers, suppliers, and outside experts.
4. Collisions:  Bring together diverse groups to break the back of tough problems.
5. Openness to experimentation:  Experiment regularly, sometimes just to learn.
6. Idea sharing:  Share rough ideas early to get useful feedback.
7. Failure tolerance:  Recognize that, in the early stages of innovation, effective learning is more important than commercial success.

Table 5-3, which first appeared in the appendix of Dual Transformation, is a simple way to assess your team’s “curiosity quotient.”¹³

1. 1. Chip and Dan Heath gave a great example of this in the book Made to Stick: Ask people to brainstorm all of the objects they can think of that are white. Typically, you will get blank stares in response. Then ask people to brainstorm all of the objects they can think of that are white and are in their refrigerator. The floodgates will open and will include nonobvious answers.

2. 2. For nonlinear readers, in chapter 1 we referenced Competing Against Luck by Clayton Christensen (Innosight’s cofounder), David Duncan (an Innosight senior partner), and two other coauthors as a great book-length treatment of the idea of the “job to be done.”

3. 3. It chose the word “lumen,” which Wikipedia defines as “a measure of the total quantity of visible light emitted by a source per unit of time,” to connote that the lab “lights the way” for innovation at MetLife. MetLife decided to integrate innovation into its operating units and shut LumenLab down in 2020.

4. 4. Yes, these are the same heroes who valiantly lived innovative behaviors and BEANstormed WITCH in chapter 4.

5. 5. Fun fact: Odds are you are reading a physical book. When e-readers came out more than a decade ago, about 30 percent of Scott’s reported sales went digital. By 2020 that number had decreased to about 20 percent, which is generally true for business books. It makes sense. Business books are given as gifts, people like to take notes in them, and part of the job to be done is to have these books proudly displayed on the bookshelf. Our prediction is that COVID-19 does not fundamentally change these dynamics, but, of course, we will see.

6. 6. During the drafting of this section, the writer Googled “culture of innovation” and received 12,400,000 results (731,000,000 if the quotes were removed). “Behavior enabler, artifacts and nudges” returned 152 results. Adding the Oxford comma added another 24 results. And led the writer to switch music from Of Monsters and Men to Vampire Weekend. This reference confused one of our favorite reviewers. “Oxford Comma” is an excellent song by one of Scott’s favorite bands, Vampire Weekend.

7. 7. P&G had fun with office design to reinforce the consumer-is-boss idea. At one point, its baby-care division had a room with oversized furniture so that people could look at the world through the eyes of a child.

8. 8. Yes, it is 2020, or maybe 2021—or, if this book really clicks, it is 2073 and our alien overlords (or Skynet) are contemplating creating a culture of innovation. But Scott visited the jHub in 2019.

9. 9. David John Moore Cornwell is best known by his pen name John le Carré. None of the four of us have pen names. Any suggestions?

10. 10. A second moral: the customer isn’t always who you think it is.

11. 11. Jack Bruce was a hugely influential guitarist who was the lead vocalist and bass guitarist of British rock band Cream (which featured Eric Clapton). He was the cowriter of the classic “Sunshine of Your Love.”

12. 12. Scott heard Atari founder Nolan Bushnell use the phrase “idea road trip” at a conference in Australia a few years ago. The idea is that you get out of your normal routine to seek new ideas. That might involve going to a trade show in a disconnected industry, visiting a museum, or even leafing through a magazine.

13. 13. Yes, there are seven items on the list but eight evaluating rows. We split “collisions” into two, given the demonstrated impact that diverse perspectives have on innovation. We said it before, and we will say it again: magic happens at intersections!