The Clean and the Messy:Customer-Focused Innovation For Executives

Stanford Business School recently hired the charming (and damn smart) Hayagreeva (“Huggy”) Rao from the Kellogg Business School at Northwestern –- where he had won the award for outstanding teaching (and wrote a pile of fantastic academic articles). After a “get to know you” meeting in Huggy’s office, we decided to go out to drink some wine, and, well one thing led to another, and soon we were talking about developing an executive program on innovation that combined more traditional “business school” case style instruction and lecture at the Graduate School of Business with the more hands-on “design thinking” approach that we use at the Stanford d.school.

Huggy and I soon started focusing on innovation around customers (as we both have research and teaching interests here) and on the notion that –- rather than limiting instruction to the pristine environment of the case style classroom at the Graduate School of Business -- we would have the executives spend much of their time doing hands-on design work in the unfinished and somewhat grungy double-wide trailer currently occupied by the Hasso Plattner Institute of Design at Stanford, or as everyone (including Hasso) calls it, the d.school. 

We became quite enamored of this idea of “clean” innovation models for the morning sessions and the “messy” process of doing creative work for the afternoon sessions. We liked this approach was that it models how effective organizations do innovation: traveling between rigorous (if somewhat sanitized) theory, evidence, and case studies and the (more messy) challenges of actually identifying, developing, and trying to test real ideas with real customers. We also liked the idea because (we hoped) it would be a great experience for our customers, the 35 executives who participated in the program.  We believed that the blend of the two modes would teach them a lot and keep them motivated and engaged throughout the week.

The first iteration of Customer-Focused Innovation program took place from November 12^th to 17^th and the initial signs are that the participants loved the program, and so did the people who ran and taught in the program (although those of us in the second group have just now recovered from intensity of it all). One participant after another told us how great it was and a remarkable percentage indicated that they were going to go back and convince their colleagues to attend the next program. And the initial survey results indicate that on 5 point scale, of the 30 participants who completed surveys, 27 executives gave the “overall experience” a “5,” 1 executive gave it a “4.5,” and 2 executives gave it a “4.” And on a 5 point scale ranging from 1 (definitely not) to 5 (definitely yes),  in response to the question “would you recommend this program to others,” the mean across the 30 responding executives was 4.93.

Not everything was perfect, of course, but we are extremely encouraged by these results. I am completely biased, so I hope that some of the participants will chime in, but I was taken with overall quality of the “clean” models and cases in mornings, including Robert Burgelman’s case study of innovation strategy at Intel, Chip Heath’s session on how to design ideas that “stick,” Charles O’Reilly’s discussion of balancing innovative and routine work, Jeff Pfeffer’s session on the knowing-doing gap (I am co-author of the book, so you can’t trust me here at all), Baba Shiv’s sessions on the role of emotion in marketing decisions, and Seenu Srinivasan’s sessions on conjoint analysis in the product development process. And I was especially struck with the panel on “my favorite mistakes,” which included the deeply smart Michael Dearing explaining how –when he was a senior marketing executive at eBay – he and his colleagues raised prices in ways that ignited much controversy with the eBay community (and the steps they took to recover from the mistake) and the charming Mike Ramsey, who was founding CEO of TiVo.  Mike was refreshingly open about mistakes that his team made in developing relationships with other companies, but also quite convincing in arguing that other steps they made might have been worse.

As wonderful as these sessions were, however, the afternoon sessions in the double-wide trailer were what differentiated this Customer-Focused Innovation from other executive programs I’ve taught-in and led. The afternoon session was ran by Alex Kazaks (one of the founders of the d.school, an experienced designer who spent years at IDEO, and now a McKinsey consultant), Perry Klebahn (also a co-founder of the d.school, and a successful inventor and executive who is about to become  CEO of Timbuk2), and Sarah Stein Greenberg (now a d.school Fellow, but a recent Stanford MBA who has extensive experience in both the worlds of design and business).  We broke the participants into about 8 groups, and each had a coach.  In addition to Alex and Perry, we had a cast of wonderful young – and very skilled – designers including Alex, Ko, Liz Gerber, Scott Doorley, Yusuke Miyashita, and Brian Witlin. We also had fantastic support from the program manager from the Graduate School of Business, the flexible and persistent Stacey Gray and her assistant the "other" Sara (In fact, one of the participants gave them a “6” on the 5 point scale!).

We were fortunate to have great help from British Petroleum, who worked with us to develop a design problem (improving the customer service experience at AM-PM mini-markets, which BP owns) and to get access to local markets. Then three BP executives joined the class to judge the participants work – mostly prototypes of different ways to layout the markets and alternative customer service experiences. The 35 participants went out on Monday afternoon to observe and take pictures of these gas station/mini-market combinations. On Tuesday, they brainstormed solutions and presented alternative points of views. On Wednesday night, they built their prototypes. Then the judges came in on Thursday afternoon to evaluate their work and suggest extensions and alternatives.

Sarah tells me that participants emphasized that several parts of the experience had an especially strong affect on what they learned. One big lesson was that going out and meeting real customers gave them a sense of urgency that is often missing from their regular work. The experience of interacting with consumers was surprisingly compelling. It sounds obvious, but management and innovation are usually mastered by companies that do obvious things well. Second, we gave the teams very short – seemingly absurd -- time frames to complete tasks. Sometimes, Sarah points out, we gave them 5 minutes to come up with a point of view (problem statement) based on their synthesis of a LOT of tenuously connected and hard to organize information from their observation process. Even though this rushed process felt uncomfortable at first, participants reported that they appreciated how acting fast prevented “overthinking,” and that even if they didn't come up with fully finished concepts, they were much farther along due to the bias toward action than they would have been had they been more analytical and "thorough."

It was a sort of do it yourself version of the ABC Nightline episode filmed at IDEO a few years back, where IDEO inventors developed a prototype shopping cart in four days. To give you a feel of what the executives went through, Sarah Stein Greenberg sent me some pictures and some captions. As you can see, this was an intense experience where the executives went out and observed what actually happens in these stations and then went through the messy process – with a lot of coaching and guidance from our wonderful coaches.

In this first picture, of one of the Monday observations, Sarah reports, “Stacy interviews a store employee (not pictured), while her teammate Jim keeps a low profile and observes the product mix on the shelves and in the refrigerated section.”

The second picture is of Team 5 at work on Tuesday, the day the teams brainstormed and developed a point of view about their solution.  Sarah tells us, “Team 5 plastered the walls of their work space with photographs and observations from their time in the field. This emphasis on visualization and pattern grouping helped the team quickly sort through qualitative data to surface key insights and areas of opportunity.”

The third picture is from Wednesday, the prototyping day. Sarah reports, “Executives built many ‘low resolution’ prototypes and discovered that a surprising amount of information can be gained from early prototyping. The activities were designed to jolt participants out of usual modes of business thinking and analysis by establishing tight time constraints and the pressure of a high-energy, fast-paced work environment.”

In the spirit of design thinking, we have dozens of ideas about how to make the program better next year. For example, we think that we need to blend together the lessons from the “clean” models presented in the morning more explicitly with the “messy” experience in the afternoon and we believe that we need even more coaches in the afternoon. We also believe that it can’t get any larger that 40 participants and 30 or 35 might be even better, as this is the most labor intensive form executive education I’ve ever experienced.

Finally, as with all reports, this one is biased. I am sure I left out important details, so I hope that people involved in the program – especially participants, but faculty. Coaches, staff and so on – will add their perspective as well.

Comments

[Lilly Evans]

Good to see that BP continues to use the relationship with Stanford Business School for mutual benefit and wider learning! And that true innovative learning happens from the practice blended with cases and some meta theory, not out of the grand organisational learning citadels (I should know, I was BP original link with MIT)!

With all that excitement and hard work, Bob you do not say what were the criteria for judging winners , which idea won and why. Would you be following up with BP how thy intend to use what they learnt from this process?

Thanks again for sharing this.

[Michael Wagner]

Thanks for sharing your initial learning from the Customer-Focused Innovation program.

I find this kind of reporting very helpful. It does get my mind racing.

Plus, I'm glad to find your blog. I have been a fan since reading Weird Ideas that Work. My copy "disappeared" from my library at work, so I know it must "really" be good!

Thanks again!