Today, innovation is seen by business leaders and the media alike as the key to growth, a burning issue in every company, from startups to the Fortune 500. And in that space, Fahrenheit 212 is viewed as a high-performance innovation SWAT team, able to solve the most complex, mission-critical challenges. Under Mark Payne, the firm's president and head of Idea Development, Fahrenheit 212, since its inception a decade ago, has worked with such giants of industry as Coca-Cola, Samsung, Hershey's, Campbell's Soup, LG, Starbucks, Mattel, Office Depot, Citibank, P&G, American Express, Nutrisystem, GE, and Goldman Sachs, to name but a few. It has been praised as a hotspot for innovation in publications like Fortune, Esquire, Businessweek, and FastCompany.
What Drives Fahrenheit 212's success is its unique methodology, combining what it calls Magic--the creative side of innovation--with Money, the business side. They explore every potential idea with the end goal in mind--bringing an innovative product to market in a way that will transform a company's business and growth. In How to Kill a Unicorn, Mark Payne pulls back the curtain on how the company is able to bring more innovative products and ideas successfully to market than any other firm and offers blow by blow inside accounts of how they grapple with and solved their biggest challenges.
|Publisher:||Crown Publishing Group|
|Sold by:||Random House|
|File size:||8 MB|
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Seeing Through It
It’s Cool, but So What?
It just might be the coolest technology we’ve ever seen.
We’re sitting in Fahrenheit 212’s offices, watching as grainy YouTube clips roll by, one after the other. In a rapid-fire montage of short video reports, a string of tech reporters from various corners of the globe sound as breathless as kids on Christmas morning.
The object of their awed fascination is a new translucent LCD screen technology Samsung has unveiled at the Consumer Electronics Show in Las Vegas. Showcased on a sleek fourteen-inch laptop, the translucent screens cause a feeding frenzy among the tech paparazzi working the floor. Shooting video for their audiences back home, the reporters can’t resist waving their hands behind the see-through screen as they proclaim it to be the most amazing thing they’ve seen in ages.
Welcome to another Fahrenheit 212 project briefing. On a crisp June afternoon, a dozen of us on Fahrenheit 212’s Samsung team--an amalgam of strategists, analysts, financial black belts, writers, designers, architects, film producers, and conceptual thinkers, are gathered around the back bar of our office in Manhattan’s West Village. In aggregate, the team spans what we call the Money and the Magic. They make up the two sides of our philosophy, our team structure, and our model for developing high-impact innovation solutions. It is the way we create new strategies, ideas, products, categories, and businesses.
The Money & Magic model is in essence an innovation aimed at innovation. Its purpose is to turn the pursuit of breakthrough ideas from a hopeful hit-or-miss rain dance in search of random lightning strikes, into the reliable growth engine modern business needs innovation to be. Money & Magic does this by forcing the collision of two power sources that have traditionally been kept apart--user-centered creativity and outcome-driven commercial grunt. The two forces are joined at the hip in full-bore end-to-end collaboration. Each side of the business comes to a project with equal intensity, equal influence, and equal accountability in shaping high-impact innovation solutions.
Embedded in our approach to new ideas are hard-earned lessons about what separates innovations that work from those that don’t. The ones that work make it to market and make good money. The ones that don’t are what we call unicorns--ideas that are lovely to think about but don’t become real. The lessons here are designed to help any innovator--from the Fortune 500 C-suite exec to the startup entrepreneur to your next-door neighbor tinkering in his garage to your cousin building apps in his dorm room--turn ambition, sweat, and the alchemy of human imagination into real products and businesses that change people’s lives.
My colleagues and I gather for project briefings like this kickoff for Samsung’s translucent screens around this same worktable every week. As kids kick balls around the park below us, we kick around visions of the future up here. Many of the world’s great companies invite us to help crack their most strategically important, commercially critical innovation challenges across a spectrum of businesses. From software to soft drinks. Money to music. E-commerce to eco-packaging. Hotels to haute jewels. Wellness to whiskey. Microchips to potato chips. Resorts to retail. Fashion to factory equipment. Productivity tools to perfume. Textiles to high-tech manufacturing systems. Lipstick to life insurance. And literally soup to nuts. The running joke around the company is that we’ve turned ADD into a business model.
As the video clips run and the buzz builds, project point man Jon Crawford-Phillips has seen enough. An eloquent pragmatist of British upbringing, Crawford-Phillips is an embodiment of Money & Magic. He hops off his bar stool and shuts down the video feed. In the silence that follows, he walks to the glass wall in front of the back bar where we jot down ideas, grabs a marker, and writes five words.
It’s cool. But so what?
Pointing at the words on the wall, he turns toward the rest of the group. “That’s the question Samsung has asked us to answer. We have four months to solve it.”
What Jon means is that our assignment is to help Samsung turn this cool technology from something interesting into something valuable. What lies ahead is a rapid march through a gauntlet of high-stakes questions. For starters, where should Samsung point this amazing technology? Dozens of industries are fair game. Within any of them, what pain points and unmet needs would translucent LCD address and for whom? What new user experiences, benefits, business models, revenue streams, and competitive advantage would it ignite? What would it replace? What specific products would be the door kickers to begin a revolution? What would those products do and how would they work? And in a technology sector that moves at light speed, how could Samsung get to this bold see-through future faster than competitors who might be chasing similar science?
Solving an innovation challenge like this is a bit like wrestling an octopus. Pin down one arm and another wriggles loose. Before diving into the variables we have to start with the few fixed parameters we have. In this case there are just two: the technology itself and the capabilities of the company behind it.
Jon reaches under the table and pulls out an early prototype Samsung has built for us to play with. It’s a TLCD screen mounted into a monitor. He flips it on and talks us through the nuts and bolts. Translucent LCD is a see-through glass panel with the ability to deliver digital content while allowing a viewer to see whatever lies behind or beyond the screen. Long the stuff of futurist films like Minority Report, it’s a piece of the future seemingly teleported into the here and now.
The technology is impressive. Samsung’s engineers have handed us a seemingly miraculous way to deliver imagery onto a piece of glass without the typical backlight and solid back panel that make today’s LCDs work, and without any external projection mechanism. It does this in part by recycling the ambient light around the screen and repurposing it for image creation. Eliminating the backlight has a number of positive side effects, including reduced weight, energy consumption, and cost.
Cool, cool, and cooler.
But at the back of our minds is Jon’s nagging question. So what?
WHERE TO PLAY
Job one is cracking the issue of what businesses this technology should be unleashed upon. Or at least where it should start. The laptop at CES was a showpiece to get reporters talking; it was not meant for market.
From a commercial point of view, Samsung had understandably high interest in opportunities beyond existing consumer electronics markets. They were looking for ways to drive their world-leading LCD capabilities into new industries, rather than purely chasing the next upgrade in current lines of business. In truth, the translucent screen could conceivably go anywhere a pane of glass could fit, electricity could flow, and added content could deliver added value. Entire cities built of LCD-skinned skyscrapers? Implausible, but not impossible.
Finding possibilities with this potentially transformative technology wouldn’t be the hard part. It never is. Making decisions on which opportunities to pursue and which to jettison is the tougher task. Veteran innovators know that this kind of breadth is both a blessing and a curse. As a design researcher named Dr. Sam Ladner once put it, “There is no shortage of creative solutions to unmet needs, only a shortage of profitable ways to provide them.”
Where the dazzling technology is our first killer asset in terms of identifying new product opportunities, the second is Samsung itself. Samsung isn’t just one of the world’s biggest technology companies, it’s one of the smartest and nimblest. The company’s scale is mind-boggling. With 2013 global revenues of $268 billion, Samsung is the world’s tenth-largest company. We’ve worked with them on many innovation challenges and have consistently been amazed by their ability to execute with brilliance and speed against the things they consider important. Most businesses reaching that kind of scale are slow to spot new opportunities and act on them. But Samsung keeps charging forward.
Fast Company magazine recently celebrated Samsung as one of the world’s most innovative companies. Two of the four innovations that were cited were ideas we’d helped shape with their world-class innovation teams. In an age where every company talks incessantly about innovation, Samsung lives it, moving with remarkable speed and decisiveness. They have an unusual ability to simultaneously jump on near-term opportunities and keep their gaze on the long-term horizon. For all the headlines Apple has commanded, Samsung has earned global market leadership in smartphones, and transformed itself from what was once a primarily industrial company into a top-tier global consumer electronics brand, achieving most of that transformation inside of twenty years.
As a more vertically integrated business than most of its peers, Samsung invests heavily in raw component innovations like memory technologies and next-generation screen components, which they sell to other Samsung divisions, and to other big-name companies in consumer electronics. If the history of Samsung’s prior LCD innovations offers any indication, the products using this translucent LCD technology are as likely to go to market under other companies’ names as under Samsung’s. This is exciting as it opens up businesses beyond Samsung’s category footprint. But it is also a challenge. It means we don’t just need to invent products that use the new screen; we also need to fashion the ecosystems around them, creating value propositions capable of attracting other players Samsung may not be doing business with today.
The skill set required to handle this kind of multifaceted challenge is decidedly bipolar. It demands equal doses of inventive imagination, and hard-nosed strategic and financial skill. We would have to generate compelling product options, give those fledgling ideas enough specificity to be able to levy judgment on their feasibility and potential, and assess their economic value.
Anyone who has bought into the happy-go-lucky myths about what a great creative process feels like would be puzzled by the way we come at it, if not outright mortified. Joyful romps where every idea is celebrated tend to fill rooms with Post-it notes rather than real value, so you won’t find them here. It’s more intense than that. The players on the team are sent off their separate ways to think independently about the problem on the table, and then regroup to fire ideas at one another and debate their merits. Ideas are treated not as precious pearls to be polished, but as sparks born of friction. They ignite heat, iterations, and tough questions that propel and shape them further. It’s not an inquisition. Irreverent jibing peppers the conversations. But it’s exploration by interrogation. In the weeks ahead, we’ll synthesize and shape big ideas, but won’t stop until we’ve run them through an intense internal gauntlet. Experience has taught us what the geologists learned long ago: it takes pressure to make diamonds.
Exposing fledgling innovation ideas to the tough love of tough questions--like how could that actually be made with today’s technologies, where’s the competitive advantage, what’s the business model, and how could that ever be profitable--ensures those ideas can survive in the real world of real companies placing real bets with real money. Friday afternoon fantasies have to endure the harsh light of the Monday morning reality check.
We work this way not because we like debate for debate’s sake, but because it’s more effective at generating a greater proliferation of ideas and sharper, more valuable thinking than the artificial coddling that goes on in typical ideation methodologies. Former New Yorker columnist Jonah Lehrer wrote an interesting piece on how the myth of brainstorming’s potency took hold, and how it’s subsequently been debunked by a growing body of scientific evidence. Brainstorming as the world knows it, wrapped in the gauzy belief that every idea deserves a trophy, traces back to adman Alex Osborn’s 1948 book, Your Creative Power. In it, Osborn says, “Creativity is so delicate a flower that praise tends to make it bloom while discouragement often nips it in the bud. . . . Forget quality; aim now to get a quantity of answers. When you’re through, your sheet of paper may be so full of ridiculous nonsense that you’ll be disgusted. Never mind. You’re loosening up your unfettered imagination--making your mind deliver.” Brainstorming’s core underlying tenet, a belief that the key to unleashing creativity is the creation of a judgment-free zone for the development of ideas, was taken as a given and widely propagated. We initially bought into it, too.
At Fahrenheit 212 we got to a debate-centric way of building ideas not by conscious choice, but as an accidental side effect of hiring a lot of restlessly curious alpha personalities and feeding them too much good coffee. We had no inkling of the science behind it. But a deeper look at the science has painted a clear picture of why our seemingly tough method has delivered a higher hit rate than more common methods. While brainstorming works better than having no method at all, new research shows that debate-centric idea development is far more effective, not despite brainstorming’s judgment-free model, but because of it. Charlan Nemeth at the University of California, Berkeley, ran a large-scale creative problem solving study where 265 students were put into teams and asked to come up with creative ideas to alleviate traffic problems in San Francisco. The teams were given the same problem--“How can traffic congestion be reduced in the San Francisco Bay Area?” Each team was assigned one of three conditions. One got the standard brainstorming playbook, which included the no-criticism ground rules. One got what Nemeth called the “debate” condition, where team members could freely debate, criticize, and challenge one another’s ideas. The third got no instructions whatsoever, leaving team members free to come up with ideas in whatever way they wanted. Each of the teams was given twenty minutes to come up with as many solutions as possible.
The results? The brainstorming team slightly outperformed the teams that were given no instructions at all. But teams that debated and criticized ideas were far and away the most creative. “While the instruction ‘Do not criticize’ is often cited as the important instruction in brainstorming,” Nemeth says, “this appears to be a counterproductive strategy. Our findings show that debate and criticism do not inhibit ideas but, rather, stimulate them relative to every other condition.”
In other words, unless you’re 3M, you’re not in the Post-it note business. Every idea isn’t worth writing down and spending time on. Failing to strengthen an idea by throwing tough questions at it is a disservice to creativity.
As we start riffing on the Samsung challenge, there’s an energized positive tension in the room. The group has no hesitation to lob judgment at a fledgling thought or suggestion, but it’s done through a positive lens. The key question posed over and over is “Okay, but what must be true for that to work?” It’s a powerful question, one that quickly separates high-potential ideas from the blizzard of distracting ideas that can result in lost traction. If that list of “what must be true?” is kind of long, the idea may be a long shot. If it’s extremely long and laden with monumental barriers, we label that idea a “unicorn”: lovely to think about, but doable and profitable only in an imaginary world. We’re out to build big ideas and make them real. Big and absolutely impossible isn’t big. One of our important steps to success, in other words, is to kill off the unicorns or at least cordon them off in their own private pasture.
Table of Contents
1 Seeing Through It 1
2 The Two-Sided Problem 25
3 The Two-Sided Solution 35
4 The Stretch Factor 55
5 The Wow and the How 75
6 The Need for Speed 89
7 Seeing the Obvious for the First Time 103
8 The Question of Transformation 119
9 Lessons from the Spatula 141
10 Bend, Don't Break 149
11 Insights About Insights 165
12 Choice Advice About Innovation Strategy 181
13 2B or Not 2B 209
14 A Little Myth Busting 225
15 The F-Word 233
16 Making It Work 249
17 Monday Morning 275