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.

“If I don’t make a good grade on this test, I am going to hurt myself.  If you understood my background, you’d be worried about me.”

This is a statement made last week to one of my colleagues by a student who had already been identified as being unstable.

Unfortunately, this sort of thing is something that faculty face from time to time.  All sorts of people go to college and many are not mentally as stable as others.

Also, we have students come to college who have been coddled all their lives.  They’ve never been allowed to fail.  But, when they get to college, suddenly things change.  They are no longer the star student.  No one is there to make sure that they don’t fail.  They have to take responsibility for their missteps.  And for many that is hard to do.

For many students this is a very difficult time.  I feel that what we’ve done is, in part, move some of the awkwardness of growing up from the early to mid teenage years into the late teens early twenties.

The problem with that is that many of these students are no longer living at home, and parents can’t do as much to help (assuming that the parents are not too busy with their own lives to worry about the kids).

Now, the higher education doctrine of “in loco parentis” applies.  We wind up being the counselors and parents for these young adults.  The problem is that faculty are not trained for this.  Colleges have support staff for the students.  This includes counselors trained in dealing with these sorts of issues.

The student support service staff often have some training in how to look out for these problems.  Faculty, though, are trained primarily in only their fields.  Physics faculty learn about how to do physics.  History faculty learn all about history.  Psychology faculty may know what is going on, but not necessarily Business faculty.  We learn what we need to about how the college works, how to submit grades, etc.  Sometimes colleges offer seminars on effective teaching.  I never hear about seminars on dealing with suicidal students. Yet, I’ve had to deal with three of them in my years teaching, one being a quite serious case.

But this raises another question.  Was this student that I mentioned at the beginning of this post really suicidal or was this a very childish attempt to manipulate her professor into giving her a higher grade? Do we forward the matter on to higher ups?  Do we refer the student to the counseling center?  Do we need to call the police to report a possible suicidal student?  Or do we just tell the student to grow up?

If we refer the matter on to student services, then this incident becomes part of the student’s permanent record at the college.  If we notify the police, then it becomes a permanent police record, which are not as protected by confidentiality as student records.  How do we know what to do?  After all, faculty are not trained in dealing with these sorts of things.

The matter is not as easy as simply saying that it is better to be safe and report it than to be sorry and not report it.  Students have sued faculty for forwarding on disturbing papers and writings. Our campus attorneys have trouble keeping up with current legal interpretations.

• Before Virginia Tech, we were advised not to report students who have disturbing writings.  After all, if we report a student for writing an essay about going around shooting people, the student can sue saying that the essay was nothing but his freedom of speech and artistic license.

• Before Virginia Tech, that may have been upheld.  But the shooting incident at Virginia Tech changed things.  Faculty there got into trouble for not reporting the shooter’s troubling works.  Those faculty that did report it found that nothing was done because the administrators were afraid of doing something that would get them into trouble.

Now we can get in trouble for not reporting such things.  Unfortunately, we can still get in trouble for reporting things too quickly.  That puts us into a difficult position.  And, again, we are not trained to deal with these sorts of things.

Do you see a pattern?  We are continually put into positions of dealing with issues that we have never been trained to deal with.

That is not unique to college faculty, though.  Anyone in a leadership position will have to adapt to new situations that he or she has never seen before or even contemplated.  It is how we respond to these situations that separate good leaders from those who simply happen to have a supervisory job.

So what was our solution to the situation with this student?  (I say “our” since I am serving in a temporary administrative roll at the college.)  Since we already knew that this student has been seen at the counseling office, we called them to have an informal consultation.  They did not seem too concerned.  We also knew the department in which the student is actively pursuing a program of study (psychology!), so we called the department chair to inquire about the student.  It turns out that this particular student is seeing a psychologist, has done this sort of thing to instructors on a regular basis and the people with the training feel that the student is not really a risk for suicide, but rather has learned that some professors yield to this sort of pressure.

The head of the psychology department tells the student to simply grow up when the student does this sort of thing.  So that is what my colleague did when the student began crying after the test was passed back.  The student quit crying and began to pay attention for the rest of the class.

There have been times when we’ve had to deal with actual serious mental health issues.  And, of course, most of the time we don’t know whether or not a situation like this is serious.  In this case, the student was known, and the behavior had been identified by professionals in the mental health field as manipulative not suicidal, so we went on their recommendations.

But what would we have done in the event that this student were not already known to be one who pulls this sort of thing on a regular basis?  Well, at this point, we would have had to make a judgment call and either passed it on to the police if we deemed it an imminent threat of safety to the student or to the counseling center otherwise.

These are the things that make the job tough.

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I’ve written a number of posts abut the lack of leadership in healthcare and the resulting problems with links to useful articles. I’ve even managed to discuss them relatively calmly and sans four-letter words—or at least edited them out. (My focus isn’t surprising, since I’m one of the 47 million uninsured.)Three new articles prompt today’s post.

The first was an article, including multiple links to additional information, at Health Care Renewal by Roy M Poses MD. It shines a light on just how little unethical and/or illegal actions impact a career these days.

On September 10th, according to Bloomberg, “UnitedHealth Group Inc.’s former chief executive officer William McGuire agreed to pay $30 million to settle a lawsuit brought against the company and individual defendants over backdated stock options.” But don’t waste your sympathy on Mcguire, who still has around $800 million in stock options to fall back on.

On September 11th, “the Minneapolis Star-Tribune reported Stephen Parente, director of the Medical Industry Leadership Institute in the Carlson School of Management said the school had given him the go-ahead to explore the idea [to be “executive in residence”] with McGuire, former chief executive of Minnetonka-based UnitedHealth Group… “We don’t really care about the stock options.””

How’s that for a great leadership stance?

On September 18th, The Star-Tribune reported that the University of Minnesota is disavowing any plans to make McGuire a faculty member.

Looks like someone with at least a half a brain figured out that having an ethically challenged “executive in residence” wasn’t a good idea.

The second highlights yet another onerous practice of healthcare providers called “balanced billing”—only this one’s often illegal.

“Balance billing most frequently occurs when medical providers participating in a managed-care network believe the plan’s insurer is imposing too deep a discount on medical bills or is taking too long to pay. California, New Jersey, and 45 other states ban in-network providers from billing insured patients beyond co-payments or co-insurance required by the plan. Similarly, federal law prohibits providers from billing Medicare patients for unpaid balances… Many states also shield insured patients from balance billing by out-of-network hospitals and doctors in emergencies, since patients usually don’t control who treats them in those situations.”

Illegal or not, when collectors threaten to trash your credit people pay up. Better to call your State’s Attorney General and scream bloody murder. And if you’re unfortunate enough to live in one of the five states where it’s not illegal maybe you’d better get your network together and lobby for a change.

The third brings us to a new take on managed care.

“Consider what is happening in New England. Blue Cross Blue Shield of Massachusetts, that state’s dominant insurer, and financially struggling Caritas Christi Health Care, its second-largest hospital network, want to switch from a system that charges patients for every medical service to a managed-care-like flat fee per patient. The yearly fee would be adjusted for age and illness…

According to Dr. Stuart Rosenberg, head of a group of 1,400 doctors at Beth Israel Deaconess MedicalCenter in Boston, “70% of U.S. doctors who are specialists would be loath to enroll in a system that emphasizes primary care.

At least a third of those trillions is wasted on unnecessary care, according to the nonprofit Dartmouth Institute and other researchers, and medical experts blame widespread fee-for-service plans. These encourage volume over quality—doctors and hospitals have a financial incentive to perform more and more tests and operations whether they’re needed or not.”

Will it be better? Who knows, but at least they’re trying.

Consistent through all the problems, as well as the barrier to potential solutions, is the MAP (mindset, attitude, philosophy™) of greed and mememe that permeates our society.

In fact, that MAP is the one constant thread I see tying together the debacles on Wall Street, in healthcare, education, religion and a host of other problems.

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Today is International Talk Like a Pirate Day with the goal to “unleash your inner buccaneer.”Black humor indeed, considering the financial headlines this week.

Wall Street not only unleashed its inner buccaneer, it walked the pirate talk to financially rape and pillage with nary a thought to the consequences.

That’s what 30 years of bipartisan deregulation (three Republican and two Democratic Presidents) gets you.

Not that I think regulation always works, nor that Congress crafts good regulation, since it’s heavily influenced by lobbyists, PACs, and other special interests.

But assuming that “leaders” will act in the best interests of all is way beyond stupidity.

To add to the hilarity, the folks on Capitol Hill are debating whether to allow the same financial institutions that are melting down to take over private pension funds.

Only this time the totally unregulated, shrouded-in-secrecy, completely opaque hedge funds want a piece of the action, too.

So if bailed-out AIG, Chapter 11 Lehman and the already acquired Merrlil Lynch haven’t given you nightmares this certainly should.

Maybe we should all just walk the plank and get it over with.

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CandidProf is dealing with the aftermath of Ike—he’s fine, but has family in Houston; hopefully he’ll be back with us next week. (Read all of CandidProf here.)  In the meantime…Last week, CandidProf cited new rules by the Dallas School District that, essentially, eliminated accountability from the classroom—“…students who flunk tests, blow off homework and miss assignment deadlines can make up the work without penalty…”

Hilariously, an article yesterday on the dismal state of grammar and spelling said “the State Board of Education in May adopted new curriculum standards, including greater emphasis on grammar instruction in Texas schools.” I wonder how that will match up with Dallas’ no accountability standard.

The article focuses on the spelling in signs, “cheep gas, No in-and-out priviliges,” and student writing.

• “There is nothing wrong with my writing, maybe it is her that doesn’t know what she is doing.”
• “After writing numerous papers I feel I have improved existentially.”
• “He should not have taken that for granite.”

But don’t sit there and smugly assume that this is a Dallas or even a Texas problem, it’s global.

“A university lecturer in England says teachers should accept their students’ errors – Febuary instead of February or speach instead of speech. “Either we go on beating ourselves and our students up over this problem, or we simply give everyone a break,” Ken Smith wrote last month in the Times Higher Education Supplement.”

That lecturer would feel right at home in Dallas.

“Educators say these bungled words are a symptom of a deeper problem: Students aren’t learning grammar.”

Duh. Based on the writing I’ve seen both in and out of business, they haven’t been learning it for decades.

I guess this is what’s meant by a pebble turning into an avalanche.

Do you think that the Federally mandated no child left behind and associated funding cuts are improving the situation or do they inspire “just so they pass” rules similar to those from the Dallas Board?

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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.

Why can’t every innovation be “disruptive?”  Why can’t more companies come up with disruptive innovations?  And why is it that many innovations that are disruptive only lay the groundwork for another  competitor to take control and become the leading innovator?

I believe the answer is in the focus we place upon innovation.

All useful innovation starts with an idea that addresses an unmet functional need.  Without that initiative, the idea will have little value to customers.  “Good” innovations also create future growth potential by pointing the way to a “thread” of future innovations — a logical progression of innovations that build upon and improve the original innovation.  Those that change the way much of an industry works are considered to be “disruptive.”  But the most desirable innovations also allow the original innovator to maintain control over the innovation “thread,” rather than just creating opportunities for many other competitors, who may take control and become the leading future innovator. Maintaining control ensures the innovation thread will be sustainable for the original innovator.

Harley-Davidson was able to achieve this—until recently, no other competitor was able to overcome the hold H-D had on customer aspirations.

Apple may have with its iPod and iPhone.  In fact, Apple seems to be making its innovation thread expand to encompass its entire product line with new products like the MacBook Air that share many of the characteristics of both the iPhone and the iPod.

BMW and Mercedes have been able to do this, as well.

In fact, most companies I refer to as Alpha companies do this to some extent, although most could do it even better.

We are talking about much more than functional innovation or branding or advertising or new distribution models or any of the typical things innovators might think to use to expand attractiveness and build loyalty and longevity to their innovation threads.  We are talking about things that go beyond the traditional factors addressed in innovation, yet create significant and dramatic shifts in loyalty, aspiration to purchase, and willingness to pay more to own.

Almost any smart group of people can come up with a potentially disruptive idea that addresses unmet functional needs.  Customers are certainly under-satisfied in most categories.  The key is in understanding how to make that innovation yours, and not something others can improve upon, taking the lad away from you.

Here’s the problem:  innovation is almost always too focused upon functionality, price, and delivery of benefits rather than the real core factors that create long-term, sustainable success.

What if Apple had decided to introduce the iPod in a traditional way, using functional performance as the sole innovation criteria?  It still would have been new.  It still would have made getting and listening to music easier and more “personal.” It still would have had iTunes.  It still would have been a breakthrough that changed the way people buy and listen to music.  It still would have made Apple the initial leader, but almost any competitor could have come out with a cheaper and perhaps better performing product that would have put Apple on the defensive. And isn’t that what we see happening to too many “good” ideas?

Luckily, Apple did not stop there.  It also made its product with visual and tactile appeal — a seemingly superfluous addition, but the key to generating ego-satisfaction: the real key to sustainability. With those ego-satisfaction factors, it has been able to hold off numerous attacks and charge significantly more.

The “intelligent” cell phone is another great example.  Blackberry was really the disruptive leader.  Apple, however, “improved” upon it with ego-satisfaction factors that gave them the real leading position.  They now have the opportunity to control the innovation thread from this point forward, IF they protect what got them there.  The iPhone’s functionality was different, but not really “better” than that of the Blackberry.  It just appealed to the ego-satisfaction side better and more fully that RIMM’s Blackberry product did.  Now Blackberry, the original innovation leader, is on the defensive.

Alpha learning shows that disruptive innovation is only of value to the originating innovator, if ego-satisfaction becomes part of what is “proven” by the functionality of the disruptive innovation.

Every human needs three sets of things: physical minimums (safety/security), a sense of being cared for and valued (affection), and a purpose for being.  For purposes of innovation, the Alpha model breaks them into Function, Self-satisfaction, and Personal significance.  The reality of life is that humans cannot fulfill the satisfaction and significance elements easily, because they are typically based upon how they feel about their interactions with other people.

By understanding and focusing upon fulfillment of emotional satisfaction and personal significance, however, once functional performance has reached at least the minimum level required, the Alpha innovator dramatically magnifies the impact and value of innovation.

The result?  Control and dominance over the future thread of innovation.  After all, what good would be a disruptive innovation that just gets taken over by a competitor?

Don’t misunderstand:  this is not suggesting that functional innovation is a waste of investment.  You cannot create sustainable innovation by only addressing ego-satisfaction.  It is just the way you dramatically enhance whatever innovation you create.  It is also the way to filter ideas to make sure they will be sustainable, whether they are truly disruptive or not.

Almost all of the disruptive innovations we can think of are most obviously functional innovations.  But the innovations that will really make your company’s future (and do it at the lowest initial and on-going investment) will come from adding the ego-satisfaction element to them.  Such innovation is truly disruptive, because it changes everything in your favor, while competitors wonder what happened.  In fact, in most cases, competitors are caught flat-footed for months, because they can’t understand what you even did to create such successful change.  They are looking at the functionality but miss the ego-satisfaction elements as the really critical ones.

It also doesn’t just create a new functional solution that everyone can copy or improve upon.  It creates a highly-defensible platform from which you can control much or all of your category, while competitors scramble to even come in second.

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By CandidProf, our regular Thursday guest author. Read all of CandidProf here.

I have been teaching college students since 1984 (starting as a TA in graduate school).  I have been at my current institution since 1994.  In 24 years of dealing with students entering college, the quality of preparation for those students seems to fall every year.

I see parents and schools setting students up for failure in college, and this worries me.  Entering students do not know how to study.  They do not know how to do work outside of class.  They do not know how to use outside resources.  They have such a poor vocabulary that many words that are routinely used in technical fields go completely over their heads.  They have such poor math skills that nearly 75% of them are required to take remedial mathematics before they can even take their first college math class.  Worse, we now offer three math classes for college credit that are below the level of the lowest level math class (offered as a remedial class for no college credit) that was available when I began college.  And, students expect that they will pass a class by simply showing up for it.  How did this come to be?

Part of the problem is that parents and politicians put pressure on schools to make it easier on their little darlings. In a rather sad case, an unpopular math teacher was dismissed from a suburban high school where I live because parents complained that she was far too tough on her students.  She gave them way too much homework, and her tests were much tougher than the other math teachers’ tests, forcing her students to study for hours each week outside of class.  Interestingly, her students also scored the highest on state mandated standardized achievement tests as well as higher than other teachers’ students on the quantitative portion of the SAT and on the math AP exams.  Still, she was tough, so they fired her.

Recently, the Dallas school district implemented new policies aimed at preventing dropouts and making sure that students have a better education.  At least, that is what they said the new policies are for.  In my opinion, they are setting students up for failure.  The new policies require teachers to accept late work without penalizing students.

Does this teach the students that they have to meet deadlines?  When they get a job, will their boss allow them to complete jobs when they feel like it instead of meeting a deadline?  Homework can only be counted towards the students’ grades if it does not lower their grade.  So, there is no incentive to actually do homework.  There is no penalty for not doing it.  And teachers are not permitted to give a zero on any assignment or exam that is missed without personally speaking with parents and offering personal assistance to the students to assist them in doing the assignment.

Of course, teachers are not paid to provide assistance to students who don’t want to do the work, so how many are actually going to take time to do that?  They’ll just turn in something on the student’s behalf and get the whole matter behind them.

If students get a grade on an exam that they don’t like, they have the right to retake the exam and keep the higher grade.  A clarification to the rule that came out later indicates that the rule is meant to allow students to retake the same exam (with the same questions) as often as they wish and to keep the highest exam.

So, they can not study, take the exam, find out what questions are on it, go study them, retake the same exam (with the same questions), and then if they still didn’t get the answers right keep on taking the same exam.  And, according to district policy, no grade lower than a 50 is permitted.  After all, a failing grade harms the students self esteem.

This policy teaches students that they don’t need to work or study.  It teaches them that there is no penalty for not doing what you are assigned or for not doing it in an acceptable manner.  It teaches them that deadlines are optional.  It teaches them that learning is optional.  It teaches them that they have to take no responsibility at all for their learning. So, what are they learning that will help them when they get a job or go to college?  Basically, it is ingraining in them habits that doom them to failure.

There is so much wrong with this that I don’t know what to say.  It is defeating as an educator to see this sort of thing coming along.  Of course, some of these students may take my classes.  I maintain standards, so they will try to just show up and expect to pass the class.  They will fail.  It will make me look like a bad instructor to administrators and people outside the college who don’t know what is going on.

I can not teach an entire K – 12 curriculum and still cover college level material.  But if I lower my standards, then I am doing a disservice to those students who do want to learn.

If too many of us in college lower our standards, and I see college faculty all over the country lowering standards because that is the easy thing to do, then that will ultimately make a college degree as worthless as a high school diploma from one of these school districts that adopt these policies that are so counterproductive to learning.

It is no wonder that so many of the best and brightest teachers are leaving the profession.  It is simply too discouraging to know that what you are doing is pointless.

I guess, though, that holding your ground, even under outside pressure to do the wrong thing, is one of the things that separates a good leader from a bad one.

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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.It doesn’t make any difference what your political views are, everyone recognizes that Sarah Palin’s nomination as candidate for VP for the Republican Party changed everything… not only at the Republican convention, but also at the DNC.  There was obvious fear in both the eyes of Democratic spokespersons and the words of their primary candidate.

Why would something so simple have such a major effect?  I believe it is an example of the power of the Alpha model at work. Let me explain…

We saw that John McCain was the underdog, despite the apparent closeness of the polls.  Almost everyone assumed that this one was in the bag for Obama.  He is smooth, well-spoken, and inspirational, even when you’re not quite sure what he is saying.  His original message was one of joining together for a great purpose that made many persons who are not tattooed with a cute gray elephant on their foreheads aspire to be part of the movement to a brighter tomorrow.  Obama had not even had to tell anyone how that brighter tomorrow might occur to gain that following.

John McCain, on the other hand, had never been able to quite generate the support his poll numbers seemed to indicate he had, because his stiff jawed approach and constant reminders that he was the candidate with experience rang un-inspiringly hollow.  Going into this convention, the Republicans were trying hard to put on a good face, but it was obviously hard to do.

Then, magic happened.  It wasn’t that she was another “Maverick.”  It wasn’t that she was a “real” woman, who can shoot her moose dinner, cook it up, and still make it to work at the governor’s mansion the next morning in time to bust the tail of some nasty oil executives.  It was something quite simple, and it happened when we saw her speak:  she was inspirational.  She was real.  She, like Obama, could make people feel that they could be part of something great.  She made people aspire to be part of this “maverick” movement, and that even if you are a lifelong small-town resident, you can be part of this great country — you don’t have to be an ivy-league elitist.

The best part was that she was able to tell the “my experience is better than yours” story more inspirationally than John McCain, not because she has more experience, but because she was so inspirational and aspirational.  It meant something coming from her, where it just did not mean that much coming from McCain, because not that many really cared.

This is the Alpha model at work.  The Alpha innovation rule is:  Ego-satisfaction over-rules functional satisfaction.  You can have the performance advantage and still lose to someone who is more inspirational and aspirational than you.  Make people feel that they will feel good about themselves (self-satisfaction) and that others will feel good about them (personal significance), and the only factor performance has in the equation is to act as “proof” that you are telling the truth.

This campaign has suddenly become one where issues will be important.  They weren’t before.  Before it was who makes us feel that we want to be part of a movement.  Now it’s going to come down to who can prove that their claim of that benefit is real, based upon how they are going to achieve their goals.

A couple of months ago, Obama would have won without anyone really knowing how he was going to do anything.  Now he will be forced to explain it, because there is another inspirational “gun” in town who is stealing the scene.

If candidate McCain can join in the inspirational, aspirational game plan, this could now have become an unbeatable ticket.  If not, it will still be a very close race with the small set of independent voters measuring who they really believe will give them the Alpha leadership they desire.

Does Sarah Palin provide you with ‘ego-satisfaction’? (Miki)

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I took last week off, but today I want to wrap up the final chapter in IBM’s The Enterprise of the Future (a steady Saturday feature since July 12; be sure and download your free copy)

Chapter Five is called Genuine, Not Just Generous and refers to “an emerging generation of socially minded customers, workers, partners, activists and investors” who are demanding—through their wallets and their feet—a new commitment and level of corporate social responsibility (CSR) from companies.

It’s not an accident that three of the nine drivers that continually moved higher over the last three surveys are all part of CSR—socioeconomic factors, environmental issues and people skills—CSR reputation is critical to attract and retain scarce talent.

According to one electronics CEO, “Corporate identity and CSR will play an important role in differentiating a company in the future;” one consumer products CEO said “Consumers will increasingly make choices based on the sources of the products they buy, even the ingredients and processes used in making these products.”

But, like a leopard, these corporations are having problems changing their spots, “They’re very interested in new product and service opportunities for socially aware customers, however, transparency is not currently a top priority.”

Still, “CSR investments will grow by 25 percent, which is faster than the other trends…”

There are five key points to CSR

• “Understands CSR expectations;
• informs but does not overwhelm;
• starts with green;
• involves NGOs (nongovernmental organizations) as part of the solution;
• makes work part of making the world a better place.”

and five key questions you need to ask yourself

• “Do you understand your customers’ CSR expectations? How are you involving them in solutions?
• Do you know which NGOs your customers listen to and are you collaborating with those groups?
• Have you gained insights from current green initiatives that can be applied to your broader corporate social responsibility strategy?
• Are you offering employees the opportunity to personally make a difference?
• How do you ensure that actions taken throughout the enterprise — and the extended value chain — are consistent with your CSR values and stated policies?”

Finally, “The CEO s we spoke with are upbeat — not just about opportunities for their organizations (important as that is), but also about a bright future for business and society.”

Are you?

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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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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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Image credit: nookiez  CC license