8 Lessons on Innovation, Brought to You by Philips and the LED

One of the classic (and most overused) images of innovation is a light bulb:

lightbulb

It’s only fitting, then, to look at 8 lessons in innovation by way of Philips’s 50-year exploration of LEDs – courtesy of the following excerpts from Fast Company’s March 2014 issue, from the article How Philips Altered the Future of Light.

LEDMarch2014FastCompany

photo by Kelvin Van Aelst

How did Philips take the LED to this point, and where does it go next? Which leads to another question: If the LED happens to be much more than just a better light–that is, if it happens to be an innovation, like the PC or cell phone, that alters the world in a significant way–what can it teach us about how big innovations happen, and why?

Screen Shot 2014-02-17 at 5.27.45 PMTo understand where the LED is going, it helps to understand where it came from. An LED is not a light bulb, really–it’s a light source, tiny and not much larger than a pencil dot, lodged deep within a larger package of plastic, metal, and glass that has been constructed to resemble a light bulb mainly because consumers still prefer a familiar, time-tested shape.

At the start, it is very difficult to predict whether a breakthrough can evolve into something that will actually change the world.

Screen Shot 2014-02-17 at 5.27.57 PMIf the LED wasn’t quite an innovation in the early 1990s, then what made it potentially revolutionary a decade later? Early on, the challenge for the LED, as with any fledgling innovation, was straightforward: It must do something either better, or cheaper, than the existing product it is trying to displace.

To look at the future of light in the mid-1990s was to see that the LED did neither. It was expensive, hard to make, dim. Yet even then, a few people saw the early trends and predicted that the technology might be able to achieve astounding gains, given the right amount of research, funding, and time.

Screen Shot 2014-02-18 at 7.13.00 AMIn the early 2000s, Philips believed that the product could only achieve scale or impact–the very definition of an innovation–if its manufacturing costs could be reduced and its quality greatly improved. The only way to get there was to gain one modest step at a time. Thus, Philips had to improve manufacturing processes, experiment with new materials, and make a host of improvements to help the LED surpass existing lighting technologies. And it had to imagine all the possible applications, no matter how small, because of a strategic reality: A radical new product will need to infiltrate markets at the margins before it can claim the center.

Screen Shot 2014-02-18 at 7.13.12 AMHow to bring the cost down further? How to do it faster? With novel hardware, it often requires the resources of a large company to support a product during the long haul preceding its mass manufacture. At the same time, government policy and funding often help push a breakthrough innovation into the market.

Philips demonstrated their LED bulb could now provide light that was just about as good as an incandescent and measurably better than a typical compact fluorescent. But the “cheaper” aspect was still a problem. Even in 2010, the prices of Philips’s 60-watt LED bulbs, at about $40, were still stratospheric.

Screen Shot 2014-02-18 at 7.13.24 AMHuman beings have a tendency to underestimate how long it takes for a ­scientific breakthrough to become a practical innovation. The LED, with origins in the early 1960s, has progressed only slightly faster. But what likewise seems true is that adoption rates can change quickly, just as they did with smartphones. As costs plummet and quality improves, a new technology can suddenly achieve an accelerating, global popularity.

At this point, Philips estimates that LEDs are improving by 15% annually in terms of light output while decreasing about 10% annually in cost. The main question now is whether consumers will refuse such a deal: a lamp that pays for itself in a few years in energy savings and lasts 15 years beyond the payback.

Screen Shot 2014-02-18 at 7.13.36 AMSo efficiency and economics can explain why LEDs will soon infiltrate our homes and offices–but not how the technology might subsequently evolve. The reasons behind the initial appeal of an innovation don’t predict the range of problems it will someday solve. The “second wave” of lighting will involve harnessing the “intelligence” these devices can contain–software and sensors that can allow LEDs to “understand” where light is needed, and at what intensity and color.

On Philips’s Hue LED concept, some light recipes already offer settings so users can “relax,” “concentrate,” and “energize.” The descriptions arise from Philips’s ­research on how settings in schools can improve student concentration, and how particular wavelengths have a relaxation effect. They’re not the whim of an app designer.

Screen Shot 2014-02-18 at 7.13.50 AMListening to Philips executives map out the future can lead to a realization: Older digital technologies–the Internet, for instance, or smartphones–accentuate the impact of newer digital technologies, such as the LED. Internet connectivity makes the product controllable by smart phone, but also endows it with a vast capacity for improvements.

Big data, the buzziest of recent trends, plays into the LED future, too. Because LEDs are controllable and connectable, they can follow instructions from remote sources. But they can also relay data back.

Screen Shot 2014-02-18 at 7.13.59 AMThere is a downside to every innovation, and LEDs are no different. What if your company’s main product is something that effectively never needs replacing? And what if it will soon become a low-cost commodity? Disruptive innovations don’t just disrupt markets or change the way people live; they disrupt old business models, too.

There seems to be a consensus within Philips that the shape, color, price, and functionality will soon make the LED device as common as the incandescent bulb. Yet there also seems to be a consensus that the market for the devices will rise steadily until about 2019 or 2020 and will then level off or drop from saturation.

///   ///   ///

And what if the market isn’t quite ready for this? “You didn’t have an iPhone seven years ago,” Philips’s CEO for Global Lighting Eric Rondolat says. “You didn’t even know you needed one.” Technologies like the Hue LED strike him the same way. Soon everyone will know that a better light has been discovered, and that its benefits are there for the buying. “The world is moving fast,” he says with a shrug. It’s just a matter of time.

 
inspired by and adapted from How Philips Altered the Future of Light by Jon Gertner
 
 
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Integrating Front-Line Team Members Makes for Better Decisions

There is an overriding concern from many leaders in today’s organizations who are trying to lead in a time of tumultuous chaos: traditional organizational structures no longer seem sufficient. There’s a simple reason:

The world in which many of today’s leaders were raised and trained no longer exists.

Fast Company Editor Robert Safian’s cover article in the November issue of the magazine is entitled The Secrets of Generation Flux: How to Lead in a Time of Chaos. In an earlier post I took a look at one section; now it’s time for another section – one that hits close to home for me.

Where hierarchy clearly fails the modern organization is in fostering and encouraging the creative ideas needed to stay agile in today’s networked world. The challenge for the Generation Flux leader, then, is to encourage creativity and agility while retaining the advantages of hierarchy. One of the leaders who has done so most successfully is General Stanley McChrystal. An Army man, McChrystal ran Joint Special Operations Command in Iraq and Afghanistan for nearly five years, and later commanded all U.S. and international forces in Afghanistan, before he resigned in 2010 after his staff was quoted saying critical things about the Obama administration in a Rolling Stone article.

McChrystal experienced a reinvention challenge of his own when the threat of Al Qaeda emerged and the U.S. military had to rethink its assumptions. “We thought we knew the rules, that we knew what it took to be successful,” he says. “But the sport we had been playing wasn’t good enough for the sport we were required to be effective at.” McChrystal, 58, speaks with the stentorian assurance of an old-school leader. But what he has to say doesn’t fit that profile.

We grew up in the military with this [classic hierarchy]: one person at the top, with two to seven subordinates below that, and two to seven below that, and so on. That’s what organizational theory says works,” he explains. Against Al Qaeda, however, “we had to change our structure, to become a network. We were required to react quickly. Instead of decisions being made by people who were more senior–the assumption that senior meant wiser–we found that the wisest decisions were usually made by those closest to the problem.”

In other words, leaders need to be open to letting others make decisions for them. In a fast-changing world, the boots on the ground–be they soldiers or salespeople, engineers or intelligence officers–often need to react without going up the chain of command for approval. What’s more, they need to be empowered to act, to solve problems they encounter unexpectedly. This kind of openness requires not just free-flowing information but a new kind of collaborative trust.

For McChrystal, creating an organization where the best ideas win starts with instilling what he calls a “shared consciousness.” Leaders want the best ideas, but they want to ensure that everyone across the organization understands its goals and strategies. How else can you ensure that your people will act as you would like, even when you are not there? “If I’d proposed this idea to the people I grew up with [in the military],” says McChrystal, “they would have beaten me up and taken my lunch money.”

In Iraq and Afghanistan, local commanders relied on video surveillance from unmanned aerial vehicles (UAV), which gave them unparalleled views of target zones. But there were few UAVs to share among many commanders. Divvying them up was operationally critical but also emotionally important; in a fluid, diffuse war zone, commanders could easily feel slighted if they weren’t informed and empowered. “We forced our task force to hold frequent video conferences,” says McChrystal. “It was tempting to centralize control of these assets, but neither I nor my top leaders did. The commanders made the decisions about how to disperse them.” McChrystal invested in technology to spur communication and decentralize decision-making; his organizational structure made sure that it was used by the troops in more efficient ways. “My command team and I guided our values, strategy, and priorities,” he explains. “The leaders lower in the organization made tactical and operational decisions in line with those principles.”

What makes McChrystal’s comments above very personal to me is that one of my sons is in the Air Force UAV program. He’s a sensor operator, providing the video surveillance described above that helps commanders make crucial, time-sensitive decisions. Serving under the same command structure described in the Fast Company article, he has guidelines to follow. But more than ever before, those guidelines allow the critical input of the front-line troops.

As the son of a WWII vet, the father of an active-duty airman, and an avid reader of military history, the movement toward this type of decision-making is unprecedented. That may be, but it’s being duplicated in all types of organizations – even in ChurchWorld.

As McChrystal says, “The wisest decisions are made by those closest to the problem – regardless of their seniority.”

At organizations big and small, the smartest leaders recognize that a new kind of openness to ideas is required. This is where hierarchy fails us completely. How can a leader make sure that all the options and ideas from the trenches make their way to the top? If you rely on a traditional suggestion-box approach–“Please send me your ideas”–you’re doomed to limit your inputs, even in a digital, social age. Self-censorship is endemic wherever there is a whiff of hierarchy. People assume that their opinions aren’t really valued.

It seems as if today’s leadership is about ambiguity. It’s time for both/and, not either/or. Leaders need a balance between top-down command and control and bottom-up, front-line leadership.

It’s time for GenFlux leaders.

Who’s the GenFlux leader in your organization?

My favorite post from October, 2012

Growth Should be a Tactic, Not a Strategy

Starbucks was recently named the most innovative company in the Food & Beverage category in Fast Company’s “World’s 50 Most Innovative Companies.”

Not a bad place for a company that just a few short years ago was failing at success.

CEO Howard Schultz tends to see his company’s recent tribulations as a case study in what can happen to a business that uses growth as a strategy rather than a tactic.

For the better part of 15 years, from 1992 through 2006, practically everything the company did produced a level of success and adulation. If Frappuccino is a hot category and you introduce a new flavor, and it moves the needle a lot, the organization comes to believe, ‘That was a great thing we did.’ And it imprints a feeling of, ‘That was innovation.’ But that’s not innovation. In fact, it’s laziness.

By Schultz’s criteria, the line extension of a product involves little in the way of risk-taking or long-range vision. That was the problem with the old Starbucks.

And it’s probably a problem with your church, too.

Starbucks’ rebound is complicated: the financial rebound can be traced to domestic cost-cutting and global expansion (most notably China). More fascinating is Starbucks’ reputational rebound – the result of Schultz and his company’s efforts to renew a culture of entrepreneurialism and innovation that had fallen by the wayside during a mad rush for growth a few years back.

It’s a cultural shift from a methodical expansion of the brand to a methodical enhancement of the brand. As Fast Company’s Jon Gertner writes:

Starbucks no longer seems to perceive its future as depending on an ability to clone its essential store concept ad infinitum. To be somewhat reductive: You can try to sell the same amount of stuff at more stores. Or you can try to sell more and more stuff at the same number of stores. These days, the overarching gestalt of the company – demonstrated by its plans for redesigned stores, investments in innovative coffee machines, and expansion of its digital networks, and rewards programs – is striving for every branch to be both more versatile and more artisanal.

Don’t let all this business talk put you to sleep:

Churches often think growth is the end game, when it’s really only part of the playbook.

What sacrifices have you made – only to later regret – in the name of growth?

 

Favorite Post from February, 2012

Generation Flux Revisited

One of the greatest challenges of 21st century leadership is that the world we were raised and trained in no longer exists.

Robert Safian, Editor, Fast Company

Earlier this year I wrote a series of posts about a feature article in Fast Company magazine entitled Generation Flux:

Generation Flux was a term coined by Fast Company magazine Editor Robert Safian. It describes the people who will thrive best in today’s environment. It is a psychographic, not a demographic – you can be any age and be GenFlux. The characteristics of a GenFluxer are clear: an embrace of adaptability and flexibility; an openness to learning from anywhere; decisiveness tempered by the knowledge that organizational life today can shift radically in a short time period.

In the November issue, Safian has written a great follow-up feature, Secrets of the Flux Leader.

According to Safian, “we have grown up with certain assumptions about what works in an enterprise, what the metrics for success are, how we organize and deploy resources. The bulk of those resources are wrong now. The clarity of words we use to discuss business, standbys like marketplace and competitive advantage, are being redefined and rendered almost meaningless.”

It’s the same for ChurchWorld, too. 

Following a single system or outmoded model is foolhardy – churches that are successful in understanding and accomplishing their vision will be nimble and ever-changing.

Attempting to minister in today’s world is nothing if not paradoxical. Churches must be both efficient and transparent; thrifty and ambitious; nimble and stable. Churches and other organizations based on traditional stable structure and management models are not equipped for these dualities.

Generation Flux leaders are the ones who will steer their organizations toward more sophisticated models needed to survive – and thrive – in today’s world.

Are you a GenFluxer?

An Apple a Day

While doing some research recently, I came across a back issue of “Fast Company” magazine and a great article on Apple entitled “Apple Nation.” It’s one observer’s version of what “the Apple playbook” might look like. It may be dated, but it’s fascinating – and it has some implications for your organization.

  • Go into your cave – Apple is fanatic about secrecy when it comes to their development process. Behind it’s often closed doors, Apple can ignore the clamor of the world and create its own unique brand of “magic.”
  • It’s okay to be king – Apple’s engineers spend 100% of their time making products planned by a small club of senior managers – and while he was CEO, sometimes entirely by the late Steve Jobs himself. It may seem dictatorial, but it works. The hyper focus lets everyone know exactly what is needed.
  • Transcend orthodoxy – despite all the noise about Apple’s closed ideology, the company adopts positions based on whether they make for good products and good business. Results are the driving philosophy.
  • Just say no – CEO Steve Job’s primary role at Apple was to turn things down. “I’m as proud of the products that we have not done as the ones we have done,” Jobs once told an interviewer.
  • Serve your customer. No, really – however great your product or service, something will go wrong – and only then will the customer/client take the true measure of your organization.
  • Everything is marketing – Apple understands the lasting power of sensory cues, and goes out its way to infuse everything it make with memorable ideas that scream its brand.
  • Kill the past – no other company re imagines the fundamental parts of its business as frequently, and with as much gusto, as Apple does. Nothing holds it back, so it can always stay on the edge of what’s technologically possible.
  • Turn feedback into inspiration – Apple doesn’t exactly ignore the many customer requests for improvements in its products. They simply use their ideas as inspiration, not direction; as a means, not an end.
  • Don’t invent, reinvent – revolutionary is one of Jobs’ favorite words. It curates the best ideas bubbling up around the tech world and makes them its own.
  • Play by your own clock – Apple doesn’t get caught up in the competitive frenzy of the industry; it plays by its own clock. Apple’s product release schedule is designed around its own strategy and its own determination of what products will advance the company’s long-term goals.

Everyone wants to be like Steve Jobs and the powerhouse company he created and led. It’s not easy. But the lessons of Apple above may just help move your own organization forward.

 

Have you had your “Apple” today?

 

The Lessons of Innovation

The January issue of Fast Company magazine featured articles on Generation Flux. I thoroughly enjoyed it, posting several applications to ChurchWorld:

The March issue has arrived, focusing on the world’s 50 Most Innovative Companies. Again, there are some great lessons for ChurchWorld – starting with Editor Robert Safian’s lead editorial. He linked his feature story from the Generation Flux issue to themes that emerged in the Top 50 list. Here are the top eight themes:

  1.  Growth should be a tactic, not a strategy
  2. Big companies need to be nimble as startups
  3. Tech is disruptive in unexpected places
  4. Design is a competitive advantage
  5. Social media makes products and services better
  6. Data is power
  7. Money is flowing
  8. Copycats are history

These themes emerged from business names you will recognize, but the truths behind them also have application in your organization – or they should.

Tomorrow: a closer look at these themes and how they are impacting ChurchWorld.

 

If Only Things Were Like They Used To Be

Nostalgia is a natural human emotion, a survival mechanism that pushes people to avoid risk by applying what we’ve learned and relying on what’s worked before.

It’s also about as useful as an appendix right now.

That quote is from Fast Company Editor Robert Safian, writing the cover story “Generation Flux” for the February 2012 issue. He goes on to add:

When times seem uncertain, we instinctively become more conservative; we look to the past, to times that seemed simpler, and we have the urge to recreate them. This impulse is as true for organizations  as for people. But when the past has been blown away by new technology, by the ubiquitous and always-on global hypernetwork, beloved best practices may well be useless.

ChurchWorld, to a great extent, finds itself in that situation right now.

There are huge shifts occurring in the economic, social, cultural, and spiritual fabric of our lives right now. That’s not new – change has always been a part of who we as humans are. But what’s different is the pace of change. It’s not just getting faster – it’s accelerating along an exponential curve.

And the response of ChurchWorld?

Put a fence around your facility and charge admission to a museum dedicated to the 1990s – or 1980s – or 1970s – or 1960s – or 1950s – or…

Oh, it’s not that blatant – but it is obvious.

It’s time to change.

My absolute favorite quote about change is from Will Rogers:

Will Rogers quote

To survive THRIVE in this age of flux, you have to claim what makes your church unique, what sets you apart from 10,000 other churches, what God has uniquely gifted your people to be and doHold onto that – and change any and every thing else that needs to be changed in order to live out God’s calling.