By Wes Ball. Wes is a strategic innovation consultant and author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success (Westlyn Publishing, 2008) and writes for Leadership turn every Tuesday. See all his posts here. Wes can be reached at www.theballgroup.com.

I was reading Miki’s postings on Saturday about “disruptive innovation” as described in IBM’s Enterprise of the Future, so I downloaded my free copy.  I walked away with a nagging concern that these 1000+ CEOs are still chasing their tails, because they seem to be looking for the answers to long-term growth in places that require the highest investment and the highest risk.  Instead, there are much greater sustainable profit and growth opportunities sitting right in front of most of them.

The point of looking for “disruptive” innovation is that it is believed such innovation will drive a long-term, sustainable competitive edge for the innovator.  The trouble is that such innovation models typically require technology development or other innovation into untried areas that more often than not fail to deliver either long-term or sustainable growth.  It is often too easy to “one-up” such innovations, so the investment often never quite pays off as hoped.  Not everyone can deliver an iPhone or a Blackberry.  Too often the technology “breakthrough” only offers a short window of opportunity until someone else improves upon it.

This drive to find ”new” places or ways to sell is usually driven more by frustration at the failure of marketing and sales to provide sustainable growth opportunities than it is by a real lack of opportunity in existing markets and business models.  The fact is that customer satisfaction and fulfillment is very low in most product and service categories, which leaves a readily addressable opportunity for growth to the organization that can understand what to look for.

When we do research in most product and service categories, I am almost always surprised at how low customer expectations are compared to how high their dreams and aspirations are.  That gap represents a significant opportunity that can often be addressed without large investment.

What it takes is a willingness to open up the focus of innovation to go beyond product improvement, process refinement, or other functional innovation (including technology breakthroughs).  The real focus to create really disruptive innovation should be upon those dreams and aspirations, not functional improvement.

Innovation that focuses upon these dreams and aspirations (the Alpha model shown in my book refers to these as “self-satisfaction” and “personal significance”) can drive growth that catches competitors flat-footed and often unbelieving that success could come so simply.  We’ve had many examples where an organization used this kind of innovation, created dramatic growth, and their competitors doggedly proclaimed that “there must have been something else that happened to create that growth.”  In many cases, competitors never figure out what the real ego-satisfaction innovation was that drove success, so they waste time and money unsuccessfully trying to “compete” by copying other things they see happening that they think must be the true cause for the success.

Apple’s iPhone just experienced this.  The success of the iPhone put several competitors on a panicked innovation track to try to at least get “in the game.”  None have succeeded, because all of their efforts have been on the product improvement and functional innovation side, while the real success of the iPhone is far more on the ego-satisfaction side of the equation.

I own one of the original iPhones.  Functionally, it’s pretty darn good, but so was the Blackberry to which I compared it.  In some ways the Blackberry was better; in others the iPhone was better.  But on the ego-satisfaction side, there was no comparison.  Like the iPod or the MacBook Air or just about any of the other Apple products available right now, all you have to do is touch an Apple product and you feel that you’ve been transported to a planet where companies suddenly know how to make customers “happy.”

Who can describe what happens or why?  It’s so emotional that it’s beyond description.  But it is real enough that people are buying them like crazy despite the “economic downturn” we find ourselves in.  Address a person’s ego-satisfaction needs well and every competitive product pales by comparison.

We did that with so many products throughout our Alpha Factor Project that it’s hard to recall them all.  The funny part about each one was, however, that competitors seldom figured out what was really going on.  That was truly disruptive.  Often we would wait, expecting competitors to catch on, only to see them blindly fall into the product improvement trap trying to copy what we had done without addressing the core ego-satisfaction needs that had actually created the success.

The point is:  if you absolutely have to change business models or find new markets, because you’re selling in a way or to a market that is a dead-end, then by all means change.  But if you’re just frustrated with your lack of success at getting enough out of your current model and markets, then make sure you aren’t focusing upon product improvement and functional innovation, when the real need is on the ego-satisfaction side.

Do your products/services address ego-satisfaction?

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Do you consider an offer of help charity?

Here’s the background for my question.

Yes, I earn my living as a coach. But on both of the blogs I write I have a standing offer to my readers for free coaching assistance. Not only has no one taken advantage of me, no one has taken advantage of the offer.

I often help to friends and associates when they hit a snag and my expertise can ease the problem. Again, none have taken advantage of me.

I can afford to do this because what’s often a challenge to one person is easy to another with that particular expertise, so it’s not like I’m offering up the next X years of my life.

That’s the background, here’s what happened.

A guy, call him Jim, and I are volunteers for the same professional organization and have gotten to know each other over the last few years. Jim is CEO of a small, privately-owned company.

To make this short, we were talking on the phone and Jim mentioned that he had to replace a person on his staff and it was critical to make the right choice.

So I offered him some coaching, he said “great,” and I said that I’d send some written material that I used in my practice and then we cold talk.

When I didn’t hear back in a couple of days, I resent the files thinking that they hadn’t gone through (happens all the time).

Jim replied as follows,

“I will not waste / take your time without compensation. Perhaps calling it charity is a poor choice, but if I am not paying I will not waste / take your expertise.”

I wasn’t looking for compensation—of course, I wouldn’t have turned it down if it was offered, but in companies such as Jim’s I know that it can be a difficult sell to the owners—but it annoyed me no end that Jim made the decision based on his assumptions.

Didn’t ask/discuss/mention, just decided.

Do you agree with Jim’s actions?  Am I annoyed for no reason?

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Nerys Wadham, in commenting on the changes in the corner offices at BP and GlaxoSmithKline, says, “…culture perhaps being less about ‘the people’ collectively than the CEO individually. The tone, look and feel of a firm are to a great extent set from the mindset and world view at the top.”

I can’t stress enough how true this is.

It’s the boss’ MAP (mindset, attitude, philosophy™) that creates the form and shape of the corporate culture.

It doesn’t matter if it’s a mom and pop operation, startup or global giant; whether the company has two, two thousand or twenty thousand employees; whether the boss is called owner, founder, president or CEO.

Best Buy’s vaunted ROWE could not have taken root, nor would it have spread throughout the company, without a top boss who enabled the bottom-up culture in the first place, as well as providing the fertilizer that allows ideas to bloom.

It’s not enough to announce the cultural attributes in which you believe, such as no politics, and then ignore political actions because you believe that your senior staff are adults and won’t engage in behavior that goes unrewarded.

Even if you want to manage your culture by benign neglect, people need to know that there are repercussions for actions that flaunt the corporate culture just as there are for actions that violate legal issues such as harassment.

All this is just as true for the individual subcultures that establish themselves around every manager in the company.

Creating and caring for the culture around you should be written into every manager’s job description at every level.

If that bothers you, just remember that culture affects productivity, engagement, innovation and retention.

And if that’s not enough motivation for you to pay attention then stay focused on the MY-CCF mantra—my compensation, my career path, my future.

What do you do abut culture?

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See all mY generation posts here.

Continuing the focus on disruptive innovation as discussed in chapter four  from IBM’s The Enterprise of the Future (a steady Saturday feature since July 12; be sure and download your free copy) begs the question as to what is being disrupted? What are companies really doing to drive financial performance?

The most common approach is “revenue model innovations, nine out of ten are reconfiguring the product, service and value mix. Half are working on new pricing structures.”

Changes include offering more services; moving to recurring charges (as opposed to one-time payments); bundling or unbundling depending on products and industry.

The major change in pricing is being driven by more knowledgeable customers who can tap into global choices. “More are starting to price based on value to the customer, rather than on cost plus.”

The truly disruptive innovation, i.e., industry model innovation, you may have been hoping for isn’t as likely.

“CEO s mentioned several reasons for not pursuing industry model innovation. But most can be summed up with: it’s tough to do. For similar reasons, industry model innovators are more focused on redefining their existing industries (73 percent) than on entering or creating entirely new ones (36 percent).”

Not surprisingly, it’s the outperformers that usually focus on industry model innovation—think Apple.

So, what can you do to embed innovation in your MAP (mindset, attitude, philosophy™) and strategic planning?

“Think like an outsider; draw breakthrough ideas from other industries; empower entrepreneurs; experiment creatively in the market, not just the lab; manage today’s business while experimenting with tomorrow’s model.” (See the details I the doc.)

And be sure that you can answer the following four questions with a resounding “Yes!”

1. Is a disruptive business model about to transform your industry? Is it more likely to come from you or your competitors?
2. Do you spend time thinking about where the next disruption will come from?
3. Are you watching other industries for concepts and business models that could transform your market?
4. Are you able to create space for entrepreneurs and innovative business models while continuing to drive performance today?

If you can’t, then start working on them today!

Is your MAP in tune with disruptive innovation?

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College presidents want to take a radical approach to dealing with underage drinking on university campuses—lower the drinking age.

It’s an interesting debate, with more support than you might expect.

“Opinion polls suggest most Americans support enforcing current drinking laws,” but I wonder if that’s a knee-jerk reaction or well thought out reasoning.

The college presidents and their supporters cast it as a choice between “just say no,” which is the only option until age 21, or the ability to teach responsible drinking without breaking the law.

I’m not sure what makes these houses of higher education believe that they’ll have more success teaching responsible drinking between 18 and 21 than the parents, churches, and various other groups had during years 0-18.

Unfortunately, today’s kids tend to listen to their peers for better or worse, so the major benefit may be keeping their record clean for when they finally grow up—assuming they do.

(Hat tip on this to Jean at Small Business Boomers.)

What do you think?

Another favorite of mine, Robert Sutton, author of The No Asshole Rule added his thoughts to BW’s cover story Business@Work.

In a short, hard-hitting piece, Sutton says that “One of the most compelling, and frightening, academic literatures I know is about something called “emotional contagion,” which has the power to turn almost anybody into a jerk.

The research shows “…that most people, regardless of their personality traits, will automatically and mindlessly start feeling and displaying the emotions expressed by the people around them,” and says it has happened more than once to him.

Next up is research that confirms that power does indeed corrupt, and it doesn’t take much to do the job.

“A growing body of research—notably by professors Dachner Keltner at University of California, Berkeley, Deborah Gruenfeld at Stanford, and their students—documents that three things happen when people are put in positions of power:

1. They focus more on satisfying their own needs;
2. They focus less on the needs of their underlings;
3. They act like “the rules” others are expected to follow don’t apply to them.

Keltner also cites research showing that power leads people to process information in shallower ways and to make decisions that are less carefully reasoned.”

Hilariously, given just a smidgeon of power and people “eat more cookies, chew with their mouths open, and leave more crumbs.”

The way to avoid these traps is by honing a high state of self-awareness, while cultivating a circle who tells you the truth no matter what. This approach is in line Stanford professor Hayagreeva Rao’s recent hypothesis “…that CEOs with teenage children are less likely to suffer from the power poisoning described by Keltner and Gruenfeld. He reasons that no matter how much deference they get at work, at home they face sons and daughters who constantly challenge their power and question their judgment.”

Gee, who knew that teenage angst and rebellion served a higher cause than just making adults miserable.

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Books on leadership, management and associated subjects abound. Jim Stroup has a great post on the dangers of buying into the books written by academics. Jim points out that many academics do do valuable work,

“But when you pick up a book by an academic, look for a sense that the author feels he or she is examining a species of being (you and me) that is not meaningfully self-aware. Such an author may interact with us while conducting research, but will not assign any validity to our own assessments of what we do or why. We are expected to cede that to him (or her), the scholarly expert, whose role it is understand and explain. Ours is merely to learn as best we can, sufficient to be able to comply with the scientific prescription for our suffering – and that with submissiveness and gratitude… Do not let yourself become vulnerable to an academic coup. Keep the scholars in the campus.”

Although I agree that countless academics have taken this approach over the years, I find the attitude not that much different from many of the business “leaders,” consultants, and gurus (self-proclaimed or otherwise) who write how-to and how-I-did-it books.

There are a few gold nuggets in almost everything written, but there are no silver bullets.

And, valuable as it is, reading takes time, so your goal should be to find the highest value for the lowest time/energy cost, which means that reviews and referrals are a good way to go.

But you need to keep certain things in mind,

• nothing will have value if it isn’t at least synergistic with your MAP (mindset, attitude, philosophy™)
• consider the source of a referral or review first;
• Google the book and read several reviews;
• remember that reviewers review through the prism of their own MAP; so
• trust your MAP and your reactions to what you hear/read.

Finally, never forget that you don’t have to finish a book you start—I promise that no thunderbolt will strike. If the book is a chore to read it’s unlikely that you will derive enough value to warrant the cost of reading it.

Please! Share your favorite business books here.

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Last month I suggested you join a discussion going on at Business Week, offering readers the chance to weigh in and comment on serious workplace topics.

The August 25 issue offers insights gleaned from readers and experts to which I’ll be referring over the next few weeks.

First up are some interesting comments from an interview with Jim Collins of Good to Great fame. Here are some comments that struck me as excellent wisdom.

“…a “stop-doing” list or not-to-do list is more important than a to-do list, because the to-do list is infinite. For every big, annual priority you put on the to-do list, you need a corresponding item on the stop-doing list. It’s like an accounting balance.”

How true! In all my experience I’ve never seen a to-do list, professional or personal, at any level or walk of life that could realistically be finished, although they were constantly added to and/or rearranged.

That made them a continued source of frustration and demotivation.

There’s a reason that IBM’s slogan is ‘THINK’ and Collins research shows that those who with the highest level of effectiveness give themselves time to think. And while his solution takes a lot of self-discipline it’s not rocket science.

“The key is to build pockets of quietude into your schedule—times when you have an appointment with yourself and it’s protected. I have on my calendar “white space” days. I set them six months in advance, and everyone around me can see them. It’s not that I’m not working, but absolutely nothing can be scheduled on a white space day.”

Technology is the excuse I hear most often for not doing this and, again, the solution is grounded in the self-discipline required to turn things off.

“You don’t report to your BlackBerry” should be engraved on your frontal lobe.

Collins also offers great advice to all those functioning in bureaucratic organizations sans the power to alter the situation, but with potential worth staying for.

Although Collins focuses on senior executives with corner office potential, his advice resonates for workers at any level.

“They were focused on what they could control. That is Job One. But they were also really good at figuring out the three to four people in the organization who really mattered and became very good at presenting to them evidence and arguments that were persuasive.”

This is advice that anyone can follow. Instead of allowing all the stuff that you can’t control or change to frustrate you, focus on what you can do while learning and tapping into your company’s social network.

Collins even answers everybody’s question, “How long should I stay—when should I give up and leave?”

“If you produce exceptional work, your ability for influence is very high. Most people, even in bureaucracies, are hard-working, well-intentioned people trying to do good things. If you ever wake up and say the majority of people here aren’t that, then for sure it’s time to jump.”

There’s a lot more packed into a fairly short interview. I hope that you’ll take a moment to read it.

What resonates most with you?

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By CandidProf, who teaches physics and astronomy at a state university. He shares his thoughts and experiences teaching today’s students anonymously every Thursday—anonymously because that’s the only way he can be truly candid. Read all of CandidProf here.

Some students are just “needy.”  They want you to spoon feed them.  They don’t want to study and learn on their own. They would rather call you or email a question than to look it up on the textbook’s index.  They won’t go to the library to do research for a paper.  Instead, they’ll just do an internet search.  But they won’t do that to answer any of their questions.  If they hit a tough homework problem, they will come ask rather than try to puzzle it out for themselves.I don’t mind helping the ones that truly need it, but many of my students don’t even try on their own.  You can help too much.  Then the students don’t learn how to learn. But these are not the students that I really have a tough time with.  I can tell them to go work on it themselves for a while and then come back if they can’t figure it out after they try on their own.

However, some students have extracurricular life events impacting their studies.  Sometimes they tell me what is going on as a way to explain why they are not doing well.  Others try to turn to me for counsel.  Those students are tougher to deal with because my training is in physics, astronomy, and astrophysics—not in psychology.  In fact, I have never even taken a psychology class.

Students often look up to their professors, so that is why they come to me with all sorts of personal issues.  All I can do is listen sympathetically and be supportive, much as anyone else would do.  I can’t really advise them on anything.  I do tell them that perhaps they should talk to someone at the college’s counseling office, but often they are unwilling to admit that they need professional help.

Many students are dealing with difficult issues.  Most college students are young adults, and they are facing adult situations for the first time without parental support.  I also have many students returning to school after several years, and they face major life issues, too.  I have students come to my office to explain why they are not studying and doing well, only to break down in tears.

I have had students whose parents died; students going through a breakup with someone (including some students whose spouse left them midway through the semester); students losing their jobs; and even students diagnosed with cancer or other life threatening illness.

In most cases, there is nothing that I can really do.  I do listen and that is sometimes the best thing that I can do and sometimes that is all that they need.

I have spoken with faculty here and elsewhere, and we all agree that this is not something that we were prepared to deal with when we became college professors.

Our training is in our academic fields, but we are called upon to be teachers (most of us have never even had any training on how to teach), role models, mentors, counselors, friends, and even in-loco parents for our students.

A few universities offer support for faculty placed in these unfamiliar roles, but most do not, so we are left to fend for ourselves.

Join us next week for Dealing with student disabilities

Is this multi-role profile good for the students? For the professors?–Miki

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