00:01 DK: Welcome again to the Defining Innovation podcast. This is episode number three where today I’m chatting to Tim Kastelle. He’s the senior lecturer for Innovation Management at the University of Queensland, in the business school there. He has an amazing blog, which is just an embarrassment of riches. It’s called Discipline of Innovation. Find it in the show notes. And you can also find him on Twitter @timkastelle. I asked him straight off the bat what his academic definition of innovation is and if it differs from any others?
00:34 Tim: So the definition that I always use for innovation is executing new ideas to create value. And everyone that studies it has their own definition but they all basically boil down to some way of saying that same thing. And there’s a couple of critical issues there, one is that everyone has the new ideas part and they get that. But you have to execute. So the issue of, you know you don’t want to be the guy in the bar that said I had the idea for Facebook ten years ago. You actually want to be the guy that builds Facebook, or the girl that builds the next Facebook. So you actually have to execute. And then the third point is the idea of creating value. Sometimes people will say — they’ll actually talk about money in their definition. So they say that innovation is an idea that has been translated into money. But I prefer value because value is more interesting. When we talk about value it means that education institutes can innovate without having to make a bunch of money. Governments can innovate without having to make a bunch of profit. So value I think is really important as a third part of it so executing new ideas to create value. To innovate you have to do all three of those things. It’s not enough to just have an idea. It’s not enough to be really good at executing without creating value. You have to do all of them. I think the biggest error that people often make, and this will come up again later as we continue to talk is to mistake innovation just for having ideas. Often people just say, “Well I have the idea. What more do you want?” and you absolutely have to execute. And it may be different people. If you have an organization it might be different people that have the idea and the execute, but at the end of the day — I hate when people say at the end of the day. But anyway to innovate effectively you have to be able to carry the idea all the way through and that means that you don’t just have them. It means that you actually have to do something with them. So that’s why that definition is fairly broad. But it covers I think all of the different types of innovation that you might have.
02:53 DK: That’s superb. Thank you for that Tim. So tell us what you do with those definitions because you work at the University of Queensland doing what sir?
03:02 Tim: I do sort of everything. I divide my time up in a number of ways. I spend a lot of time just out talking to people in firms about how innovation works. Sometimes that can be very formally as a piece of research where I’m doing it through interviews or through surveys. A lot of time it’s just more casual where people have come to me with a problem and they want some kind of help. I have a number of people that I just have sort of mentoring relationships with that are trying to run innovation programs inside of their organizations. I just touch base with them on a fairly regular basis to see what issues they’re facing because that helps me learn about what the big obstacles are and what people are struggling with. So a lot of my time is actually spent out in the field actually studying what’s going on inside of organizations. So that’s a big part of my time. And then I spent a fair bit of time then also teaching about innovation. So I teach into the MBA program. I’ve got other courses, educational courses and other things where I try to take all that stuff that I’ve learned and that other people have learned and packaged it up into some set of ideas that people can then take and apply in their particular setting in a way that will help them create value for whoever it is that they’re trying to create value for. So those are the two main things that I spend my time doing. And then kinds of my spare time hobby in the evenings is I then write a blog about innovation as well which kind of cuts across both of those things. My original thought with that was that I wanted to have a way to communicate with people that had taken my classes just to keep them up to date with what was going on with innovation. And then it’s just kind of grown and grown and grown and now I’ve gotten an opportunity to talk to even some people that have never met me about what’s going on in innovation and so the blog is basically when I take all these other things that I’ve learned and apply them in a way again that hopefully is useful to people.
05:16 DK: And we’ll be sticking that in the show notes because Discipline Innovation, which is the blog title, is a fantastic resource. I spend far too much time in there researching this interview. The digital kind of breadcrumbs and the rabbit hole really goes deep on your blog, in a good way.
05:32 Tim: It’s goes deep for me too.
05:36 DK: So tell us a little bit if you can how you actually teach innovation.
05:41 Tim: Well it’s one of those things where my official title is senior lecturer in innovation management. And often I’ll explain that to people and they’ll say well that’s an oxymoron. You can’t manage innovation. And it gets down to again that issue of thinking about innovation as just ideas. And the thing of it is we can’t — I can’t manage it so that you have an awesome idea in the next ten minutes. Maybe it will trigger one in the next ten minutes through conversation which is one of the things that you try to do to support innovation but if I’m a manager I can’t say, “Hey you guys, go have great ideas. And do it tomorrow or do it right now.” And I think one of the guys that I have done a lot of research with is a guy named Mike Coles and he did knowledge management for Hatch Engineering for a number of years. Now he’s out on his own. And one of the things that he said about knowledge management that has always stuck with me is he said, “Look people talk about herding cats, that knowledge management is like herding cats. And it’s not. It’s actually like herding butterflies because the thing with cats is that they’re actually some things you can do to herd cats. There’s nothing you can do to herd a butterfly. All you can do is set up the conditions that will attract the butterfly in.” And innovation is kind of the same thing. So the issue you have when we’re saying well how do we teach it, what we’re talking about is how do we create the conditions that will be attractive for good ideas? And it will help us then execute them once we’ve had them. And so when we talk about how do we train or how do we teach it, we talk about what are those conditions? How do we enable the construction of those inside of our organizations? There are some mechanical things, once we have really good ideas, do we have resources in place to execute? Do we have the skills that we need to execute and that sort of thing? And then that value bit we can also think about really clearly who are we creating value for and be very specific about is our strategy right for doing that? So you can think about the different parts of the definition. You can think about some of the tools and the techniques that support that and then if you pull all that together, that ends up being a little bit of an innovation course. It’s often not what people expect when they come in because they’re thinking well we’re going to have a class with beanbag chairs and Nerf guns and that’s not it. And there are situations when the bean bags chairs and the Nerf guns are cool but the main thing we try to get across in the course is here’s some stuff you can do. And I think that herding butterflies analogy is a really good one because what we’re really trying to do is we’re trying to create the conditions that enable people to innovate. We’re not forcing people to innovate.
08:49 DK: And you’ve written a little bit about this and I remember reading a bit about habits and forming habits which comes from the conditions and there’s a thing I used to say a lot was habitats form the habit right? And could you speak a little bit how an organization, for a lot of organizations that means a cultural shift rather than an operational or a hierarchical kind of fragmentation, maybe it is. But what’s the cultural shift that organizations have to do then to get their heads on the conditional side of innovation?
09:19 Tim: Yeah so that’s a great question and I think there’s a couple of key issues there. One is that if we’re talking about organizational habits or routines or the processes that we try to put in place, I think for me the most critical one is building up a skill for experimenting.
09:45 DK: A skill for experimenting.
09:47 Tim: Yeah or a habit, right but basically having that system in place where basically somebody says, “Hey I’ve got this great idea,” and then the response is, “That’s pretty cool. Let’s see if it works.” And the whole point, there’s a few I think critical points with that. One is that when you’re seeing if it works, if it’s an experiment, we’re just testing. And so we’re not trying to prove that it works. We’re not assuming all the way through oh yeah that’s the right idea. We actually have to figure out well how would we test it? So is there a way that we can build a prototype? Is there a way that we can scale it down to a really small level to see if it’s going to work to gather some data and then to see if that’s something that’s worth building more? The other thing with experimenting is that with an experiment you don’t fail. The whole thing with an experiment is we try it, and then the thing that we expected to happen either happens or it doesn’t and in both cases, then we have data. So either we’ve learned hey we have this idea and in this particular setting and under these circumstances it doesn’t work, so either we need to try different circumstances or a different way to approach it or do it with a different set of people or maybe it’s not right for us right now. But it’s not a failure. But then if it does work then we can say okay we learned something and let’s do more of that. But I think that habit of experimenting gets around a lot of problems that we run into with innovation including just getting hung up on the idea because if you’re experimenting we have to actually execute to figure out if the ideas any good. The second thing that it does is it gets around this issue of well what happens if we try an idea and it doesn’t work as we’re going out to learn? And I think the third thing that experimenting does is it just gets you into that habit of action. So if you talk about what’s the core skill of innovating, for me that’s it. And a lot of everything else that’s really important for innovation builds on that. So we have that habit of experimenting and that culture of experimenting and learning in place, then you can build a lot on top of that. And so if we’re saying well how can we be more innovative, a lot of people say well let’s go get an idea management tool. Or let’s get an innovation (inaudible) or all this other stuff. And for me all that stuff can be fine and it has it’s place but all the other stuff doesn’t really help you that much. So for me that whole thing is to experiment because that where an innovation culture then comes from.
12:38 DK: I love that and I never thought about how powerful just that one singular point, that granular point of experimentation can be and it leads into so many things. And then unhinges all the barriers, which you talked about.
12:50 Tim: Yeah if you’re talking about well what’s the thin edge of the wedge, you know we want to make our organization more innovative, what’s the one thing that we can do that would start to expand the way that we’re thinking, for me that’s it. It’s just how do we figure out a way to do that? And if you can do that a lot of really good stuff sort of naturally follows from it. And the thing of it is it’s not straightforward. It takes some changes to do that. You require different relationships in terms of power. You require different things in terms of empowerment that enable experimenting. And so it’s not like we can just walk in the door and say now we’re experimenting. But it’s for me the way to start.
13:45 DK: Wonderful, thank you for that. So let’s shift a little bit. Talk to us a little bit about the air sandwich. Just because I love this thing that I read on your blog about expectations between senior teams and implementation staff and how that is sometimes one of the biggest barriers for any innovation programs or even just communicating new ideas. Just talk to us about the air sandwich, it’s just so cool.
14:14 Tim: Okay well that’s an idea that I’ve stolen from my colleague and co-author Nilofer Merchant. So she wrote about that in her book The New How, which is wonderful. And in that she talked about how strategy gets built. And her whole argument is that within our organizations we’re not inclusive enough in how strategy happens. And I think it applies also to innovation. So the idea of the air sandwich is that if you’ve got one group that sets the strategy and then you’ve got a second group that’s expected to implement, you end up with a gap between them. And that’s what she calls the air sandwich. And so what happens is if the strategy group which is often a senior group, they set the strategy and then they just throw it over the wall and they say, “Here it is, go to it.” If the people that have to execute it have no investment in it, they’ve had no participation in developing the strategy. They have often no understanding of what the goals and objectives are, they can’t and they won’t do what you need to do to make that strategy work. And so what you end up with, if we think back to that definition of innovation, you have a gap in the value that’s trying to be created because the people that are being expected to implement don’t understand it, they don’t buy into it, they don’t see the value for themselves. So Nilofer’s argument and I endorse this 100% is that to be more effective with building our strategy we have to be more inclusive in including more people in the building of strategy. And that’s the way that you get rid of that air sandwich. And it’s too bad that everyone is just listening to this on the podcast because my physical gestures is really expressive. But the issue that if more people participate in building the strategy and building the goals and building the objectives of an organization, they’re more invested in making sure that those things work. Often those people are closer to the people you’re trying to create value for so they often have a better understanding of what your other stake holders will value. And so that idea being more inclusive in building strategy and building the ideas that you try to innovate around I think is very powerful one.
17:00 DK: I really love it. It’s just such an obvious thing that probably between us we can cite so many examples from our previous experience of working in global authorities or education institutions, you see it. My kind of only frown point with that if there is one is if you’re talking to an organization which is quite fat like maybe a governmental organization or university like Queensland, it’s quite big, how do you make sure the air sandwich is nonexistent which is what you’re advocating for or at least has a very thin layer of air?
17:36 Tim: Yeah, well so that gets into a huge can of worms. So the bigger question there is if we have a large organization and they’ve got set ways of doing things and we want to get them to change, how do we do that? And I think there’s a few points with that. One is that first off it’s really hard, unsurprisingly. And so that’s one issue but the second thing then is that there are in fact organizations that have done it successfully. IBM has transformed themselves twice in the past 20 years. You know first to respond to the rise of PCs and second to respond to the rise of the Internet. And so they’ve gone from being a hardware manufacturer to being a service company. And if you look at who were their big competitors in the 60s and 70s, they’re all gone. So all the organizations that were just as big that they were competing against have just disappeared because they didn’t make that transition. And IBM was thousands and thousands of people. So how did they do it? They did it by doing exactly the sort of thing that we’re talking about which was broaden the base of people that are participating in generating ideas and coming up with a strategy. You know their big innovation in the 1990s was the innovation jam. And the whole idea of that was well wait a minute we’ve been setting direction here in the boardroom with 20 people for years and that was fine while the environment was stable. But now the environment isn’t stable so maybe we should talk to everyone. Those first innovation jams, we went from having our strategy and our objects set by 20 people to having 10,000 people participating in figuring out what we should do next. So that idea of can we broaden the base of the people that are contributing ideas and contributing to our purpose and contributing to our direction, it can be done. So we have examples that we can look at. The third point in all of this is that often — so that’s doing that on a big scale. If we’re in an organization and we’re not the CEO, so we don’t have the power to change everything, I think the next question to ask then is okay there’s good stuff going on someplace here, how do we identify that and build on that? Because you’re better off finding the positive things and building on those than trying to stamp out barriers even if there’s barriers that are hindering innovation or change, it doesn’t necessarily just unleash a torrent of ideas or innovation that was just sitting there waiting to be unleashed. You’re better off finding the people that have already figured out a way to fight that inertia and of succeeding that system and encourage that. Try to get that to spread. You knock down barriers (inaudible) actually building the behaviors that you want rather than — supporting the behaviors that you want rather than trying to get rid of the ones that we don’t.
21:10 DK: Thank you, yeah that’s brilliant. So we could just rap forever man but we’re going to have to bring this to a close so I’m going to ask you, which I’ve asked the other guys I did a podcast with, who’s impressing you in this innovation space whether that be a person, a brand or organization, or even just an idea that’s popping in that you think has some legs?
21:30 Tim: Okay, I’m going to cheat and pick two because as you can tell I can talk. And so there’s a couple of ideas that has popped up. One is for an idea the thing that I think is really powerful and you and I met when I was talking about this is business model innovation. I think business model innovation the idea that we can change not the thing that we’re delivering to people but everything around it and then we’re creating fundamentally different value for people, I think is incredibly powerful. And it’s something that is available to pretty much every organization. So I think that the idea that we can innovate a business model is something that is a relatively new idea, obviously the activities that go into have been around for ages but thinking about it as a business model and innovating that relatively new and I think it’s very powerful. And so when we look at things like wing start up, that business model is right in the middle of that and that’s transforming the way that we start businesses. It’s also having a huge impact on larger firms as well and so I think that’s a really important idea and one that people should investigate. If we’re talking about organizations it’s another one that you and I were talking off mic at the start. The company that’s really impressing me right now is Under Current. And I think if we think about ideas that we’ve been discussing, how do we get (inaudible)? How do we flatten? How do we experiment? How do we find (inaudible) and expand it? That’s the think that their whole practice is built around. And I just think that they’re doing great work and I would love to see more companies like that. I would love to see them get really huge because I think that their approach to this is really, really good. They’re doing fundamentally good work. And it’s based on good theory and pretty solid theoretical underpinnings and that to me is the kind of company I’d love to see more of.
23:41 DK: I appreciate that and thank you. So Tim thanks for your time. It’s really been a joy to speak to you.
23:47 Tim: Yeah, thanks for the opportunity. As you can tell I love talking about innovation with pretty much anyone I get a chance to and I hope that this is been a good useful thing for people.
24:01 DK: That was Tim Kastelle, senior lecturer of the innovation management at the University of Queensland. You can follow him on Twitter because of course you’re young and funky and follow people on Twitter right? You can follow him on Tim Kastelle, that’s T-I-M-K-A-S-T-E-double-L-E, timkastelle, please subscribe to the blog, leave a comment or review it on iTunes. That would really help me out immensely. If you think we should be interviewing anybody for the Defining Innovation podcast just leave a comment or drop us a note on the contact page of justadandak.com. Until next time, I’ll speak to you then.