The Idea Killers

In the Harvard Business Review, branding bigwig David Aaker explains why business execs always seem to kill new ideas.

In a nutshell, they can't step over their own pessimism.

That hardly makes them poor performers.

But it does make them human.

Ten years ago, two psychologists, Amos Tversky and Daniel Kahneman, received the Nobel Prize for proving that people, given a choice, will predicatably choose the road most traveled.

They'll do so because the probable outcome of a safe bet feels a lot rosier than the probable outcome of a long shot.

"There's evidence that firms are no different," says Aaker. 

"They overinvest in incremental innovation, and underinvest in innovations that would create 'must haves' that would define new subcategories, which, with rare exceptions, are the only innovations that create real growth."

Business execs' predilection for pessimism typically manifests itself in four ways, Aaker says:

Execs overvalue safe bets. "An innovation that will provide a predictable increase in the sales and profitability of an existing business will be more attractive than an alternative that will offer a chance at a large profit platform."

Execs undervalue vision. Without the customary hard data, execs can't imagine how a novel idea might pay off.  "Estimation of the prospects for substantial or transformational innovation will depend on some uncertain market factors. And, the estimate usually needs to be based on insight, not data."

Execs underfund innovation. Inside most companies, it's the established business units that get all the R&D money. "Their business executives will already have a list of incremental innovations that they believe will further their business. They're unlikely to tee up major innovations that don't fall into their space."

Execs eschew other innovators. Executive nay-sayers love to point to other innovators' blunders to justify their dismal views, even though "market size estimates based on existing flawed products can be biased downward."

If human hard-wiring is the enemy of the new, what's the way out?

Execs need to shake their bleak attitudes, Aakers says.

"Biases against game changers need to be neutralized."

Open for Inspiration?

Inspiration, says The Merriam-Webster Unabridged Dictionary, means "a divine influence" or "the act of drawing in."

Divine influence lies all around us, all the time. But we're not always ready to draw it in.

That's because we're so self-reliant, we don't stay open to random events.

Consider the following.

In his memoir, Chronicles, Bob Dylan recounts the days leading up to his first recording session.

The sheepish 20-year old visited the office of a Columbia Records producer, John Hammond, to sign a recording contract with the company. At the end of the meeting, Hammond handed Dylan an unpublished album by a Mississippi singer-songwriter no one had ever heard of in 1961, Robert Johnson, and Dylan took it home with him.

Dylan describes how, in the weeks that followed, the record enchanted him. "Over the next few weeks, I listened to it repeatedly, cut after cut, one song after another, sitting staring at the record player. Whenever I did, it felt like a ghost had come into the room, a fearsome apparition."

Dylan transcribed all of Johnson's lyrics and studied them for hours. "I copied Johnson's words down on scraps of paper so I could more closely examine the lyrics and patterns, the construction of his old-style lines and the free association that he used, the sparkling allegories, big-ass truths wrapped in the hard shell of nonsensical abstraction—themes that flew through the air with the greatest of ease."

Dylan realized he'd found the key to his artistry in Johnson's offbeat worldview. "I didn't have any of these dreams or thoughts but I was going to acquire them."

Dylan wonders what might have been, had Hammond not given him that record. "If I hadn't heard the Robert Johnson record when I did, there probably would have been hundreds of lines of mine that would have been shut down—that I wouldn't have felt free enough or upraised enough to write."

How about you?

Are you open for inspiration?

HISTORY BUFFS' NOTE: March 19 will mark the 50th anniversary of the release of Bob Dylan's first record.

Feather of His Country

A Nebraska woman named Rebekah Speights is auctioning a Chicken McNugget that resembles George Washington, according to Yahoo! News.

Ah, capitalism at its finest.

In a letter to Benjamin Harrison, Washington wrote, "A people who are possessed of the spirit of commerce, who see and who will pursue their advantages, may achieve almost anything."

What Opportunities are You Missing?

Blogger Joyce McKee, whose Let's Talk Trade Shows is one of my favorite reads, contributed the following post.  Thanks, Joyce!

It seems we are so caught up in our routines that there may be great opportunities presented to us, and we just do not see them. 

Last week I watched this video in amazement.  It is about the age-old topic, money does not grow on trees.

How often as a child did you hear that statement when you wanted something and your parents did not have the cash to buy it and used that as an excuse?   I know I was told that many a time.

The video is created and filmed in Chicago in the summer of 2010. 

The majority of the people walking by this tree with money on it never saw it!  They did not look up or around as they walked by the tree.  Would you have noticed the money on the tree?

Just for today, start the process of observing.  With a sense of expectation, what will you see or hear?  Where is that great opportunity lurking?  Do you need to pick up the phone and call someone?  Or send a letter, email or card to someone?  Should you invite someone to join you for lunch or dinner?

Opportunities, with money associated with them, are all around you. 

Are you ready to harvest them? 

I know I am.

Ask Customers First

Today's novel idea: ask customers first.

The top managers of some top brands "have forgotten (or never knew) what every junior brand manager surely knows," write Carol Phillips and Judy Hopelain in Branding Strategy Insider.

Ask customers how they might feel about your decision before you announce it.

In recent months, Bank of America, Netflix and Hewlett-Packard have all reversed major decisions after suffering consumers' wrath.

"Senior leaders are acting like bulls in a china shop, awkwardly and prematurely broadcasting their strategic decisions in ways that destroy their company's (and their own) reputation and value," the authors say.

"What has happened to the instincts of corporate America? Have the leaders of these companies become so insular, so arrogant, or so detached from reality that they don't bother developing a customer-focused plan to communicate their decisions effectively?"

When e-research tools have made concept-testing as easy as spell-checking a memo, these folks have no excuse.