The 5 Skills Of An Innovator | Bob Moesta, The ReWired Group | BoS USA 2018

Bob Moesta, Founder, The ReWired Group

How do you see innovation and how do you harness it effectively to make it work? How do people learn, and how can they work better? Every innovator comes across daily problems that they don’t know how to answer or where to even start thinking about the answer.

In this fast-paced talk from BoS USA 2018, jobs-to-be-done expert and lifelong innovator Bob Moesta helps give you the skills to make all your innovation outcomes more predictable, and successful. Bob has honed these key skills from his life working in everything from automotive, weapons systems, food, private equity, homebuilding, construction software, and more.

Video, slides, and transcript below

Video

 

Slides

Transcript

Bob Moesta: These stairs suck. Like I gotta look down. It’s all good people. Okay.

Eighty two slides in 50 minutes ready? You better be awake. All right.

So I’m going to talk about the ‘five skills of an innovator’ which is me how I became an innovator and let me tell you a little bit about myself. I’m an engineer. Electrical undergrad study both mechanical and chemical basically have my MBA. Thing is I’ve learned a lot about how to develop products. I’m from Detroit. So Mark told me I couldn’t swear, so that means I’m going to swear. Damn. You can bleep it out. The other part is I’ve worked on over thirty five hundred different innovations. I’ve worked on everything from the guidance system for the Patriot missile. I’ve worked on Pokémon mac and cheese for Kraft. I’ve worked on Base Camp. I’ve worked on health care systems and just about everything you can imagine in between. The other thing you have to realize is I’m dyslexic. I had three close head brain injuries and I can’t read and write. My mom basically taught me how to hack the system because she knew if I was labelled as ‘special ed’ the system would take care of me my whole life. So she did things like teach me how to lip read when taking a test so I could take the test. She taught me to read by circling the five biggest words on a page and guessing what the heck the page was about. All right so seven years old when this all started. Right. So, what I want to talk about though is basically this phrase “context creates value and contrast creates meaning”.

This is the thing that drives me and it’s driven me to be able to be, you know, basically to go innovate. And so I want to unpack what that means. I’ve done everything from automotive, weapons systems, food, private equity, homebuilding and construction software. And, basically, I’m headed to be an adjunct in the Kellogg School at the Entrepreneurial School. Where’s Peldi? Peldi, raise your hand. So I’m 10 years ahead of you. And I want you to pay attention to this because you need to see this number here – you see that number right there? What number is it? That is the number of days I have left in my life. So, my mom passed away at 63 and she never saw it coming. And what I did is I took her death date and added it to my birthday and said when will I die. I’ve chosen to pick that as my death date. And so literally I’m here because I only have three thousand days left and I need to impact people. It’s all about relationships as you’ll see. But by picking that date it’s actually impacted me dramatically to really say he…this no swearing’s going to be hard. No I’m not going to do that. Yes I’m going to do this. And so my thing is by picking a death date as crazy as it might sound the fact is as you start to realize that it’s way more than money it’s all about relationships.

This is this is a smattering of the people I’ve worked with in my life everybody; from Clay Christensen. I’ve been lucky enough to have 27 years with Clay Christensen for four hours every quarter consistently for that period of time. No agenda. Sit down and think and talk. I worked with a Jason Fried, I’ve worked with Dr Taguchi. If anybody knows who that is I’m going to be shocked he’s the most awesome man in the world. These are all the people who helped teach me and the shoulders which I stand on. And there’s behind them are another thousand people. But to realize that we all are learning from each other all the time, right. The craziest part is this man right here I was his intern when I was 19 years old. I had no idea who he was. He took me to Japan. I worked for Ford Motor Company. They took me to Japan to learn all about his systems not in manufacturing but in innovation and how Toyota was actually building better products and doing it half the time at twice the quality of what we could do. So that’s where my life started from – from an engineering perspective.

So here’s the crazy part to me is having done all these different innovations the way I frame this up. Is there’s a sweet spot that’s between a really good insight a place where somebody struggles and what a consumer wants to make progress. Strategic clarity of why are we doing the business, the business model piece of it and the systems behind it. And you need all three: great technology + great insight + crappy strategy and I lose; great strategy + great insight + crappy technology and I lose. I need all three together, but the reality is it’s what, why, and how for who, when, and where. And so, to me that’s the key is being able to understand the who when and where of who you’re actually serving and so it’s a combination of both that have been able to make me successful. This is how naive I was in the beginning. I’d see a problem, you’d pick up the rope and say ‘hey I can solve this problem’. And little did I realize that there was just a big mountain of crap on the other side. The reality is that there’s a simplistic approach to how we think. Sometimes people just dive in and do the first thing off the top of their head. And what I’ve realized is you have to get through the complexity to get to simplicity on the other side. It’s one of the only quotes I’ve memorized and when I heard it, it really rocked me which is Oliver Wendell Holmes who is a Supreme Court justice from 1902 said “I wouldn’t give a fig for simplicity on this side of complexity, but I’d give my life for simplicity on the other side of complexity”.

On the other side of complexity

So I want to share with you what my life is like on the other side of complexity so I can show you how to innovate better. All right, here’s the thing: this is this is where I learned actually waterfall but if this is the product development right. This is the number of changes and this is the design cycle and this is where I launch. What would happen is we do very little changes upfront. We get the concept to work once and then we’d start to put it together put the whole car together. More and more changes keep going keep going. Then you get to this point to call it the Nike point just launch it. We’ll just launch it. Get it out there. And then afterwards we’d fix it. And then I was ‘oh we got to cost reduce it’. We can make it faster, cheaper, better. And so this is this is the system that I was taught on in the 80s. And eventually I started to realize there were people who were doing it that way different and they had a completely different pattern of changes and it looked like this. And so what you realize is that in the system developed they were doing 10 times the prototypes we were. They were literally making things fail. They were figuring out how to push to the limits. So the notion to me is the biggest fallacy is people say ‘oh yeah you got to fail to be a successful entrepreneur’. No, you have to fail pushing the limits. You just don’t fail. You’re trying to make it faster. You’re trying to get better.You’re trying to make it cheaper. What are you feeling for and what are you trying to do that doesn’t exist now? And so to me I’ve spent my whole life trying to figure out how to be more green line than red line. The other part that was kind of crazy about this is that when you look at costs; the cost of a change goes from x, 10x, 100x, 1000x so literally if I’m on the red line I end up spending almost twice as much/three times as much to build the same product because I’m reacting. And so, what we end up having was half the time, half the resources, and ten times the impact. And so to me was it methods? Was it tools? Was it thinking? What the heck was that all about? I’m trying to keep it P.G.!

OK look.

Red Line innovation are very linear thinkers. Red line innovators are basically focusing on problems. The craziest part to me is that red line innovators are waiting for problems to happen it works, “oh now it doesn’t work. Okay fix it.” Everything’s a reaction to some problem of some sort. The green line, basically, innovators. They’re thinking about it from a very, like, how do I make it fail early? How do I understand what causes failure? How do I understand all those different things? And so, to me, this is really the dichotomy between being a red line and green line innovator. So I want to talk about that.

For me, innovation is like standing on the edge of an abyss: what does that mean? Has anybody had that feeling where you’re really sitting there, and everybody’s behind you looking at you, like okay what are we going to do? And everything is possible, and nothing is possible at the same time. It’s just crazy to me, and, to be honest, those are the moments I love. And what I want to come back with is ‘what are the tools that I have when I find myself on the abyss?’ ‘What are the skills that I have that actually have me run into that fire as opposed to running from the fire?’ And the reality is there’s five skills that I asked a lot of people about who innovate with me to say ‘what’s my skill?’, ‘what am I really good at from actually a functional perspective helping teams do stuff?’, and they came back with five things.

Five Skills

So one of them is empathetic perspective. The ability to see it from so many different perspectives. I literally, as a dyslexic I could never read a word, so, I actually had to look at these things from so many different perspectives to say what the hell does that mean? Second one functional systems there’s so much understanding around systems but Taguchi taught me this thing called functional systems that I want to share that really is one of those underlying skills that lets me see things really really clearly and understand what to do next. Consumer progress. This is really about understanding what causes people to want to buy something new or to do something new. This is all the behavior of people. And so part of it is one of those tools experiences and why is that? Oh that’s a problem. This is about designing experiences. What I’m finding is people can design product but they’re actually not designing it from the customer side back and understanding experiences. So experience design is that the crucial aspect of the intersection of both functional systems and progress. And the last one is prototyping which is I have this very strange way of thinking about prototypes and using prototypes and I use it in everything I do in my life. I want to be able share that.

#1 Empathetic perspective

So let’s start with empathetic perspective. So there’s the first thing I saw when I was about I think about 20 years old. Anybody know what this is? How many people see the old woman? How many people see the young woman? Right. The reality is the same picture you can see two different things. The young woman is looking backwards over her shoulder the old woman is looking down and has her chin down and all of a sudden you start to realize that the same dataset you can actually see completely different things in it. And so part of it was this was my obsession to say like ‘all right how do I know I have the right data?’. The second part was – I always love this example – if I get a bunch of scientists together and blindfold them and show them to an elephant and I ask him what it is and they all feel different pieces of it, they’re not going to be able to put the whole thing together. And so, to me, this aspect of what you see, how much do you see, how big is the picture, I feel like that was one of my biggest things especially as a non reader. This was my greatest weakness. I was very very insecure about this. And so, the first thing that started was just being able to contrast things. Deming actually hit this hard was talk about the problem: What are the root causes of the problem? Can you understand the difference being a problem and a solution? Can you understand symptoms versus problems versus solutions? What you realize is the English language blows. It’s just horrible. We can speak up at these levels of pablum where stuff doesn’t make any sense. It’s a part of this is how do we actually separate all this stuff? So to me these perspectives helped me one get the words out so we can understand what they mean and then systems help me unpack it down to what two things really mean.

So the other thing is this version of macro and micro. Taguchi used to always look at me and say ‘think of yourself as a molecule’, ‘think of yourself as an electron’, ‘think of yourself as a piece of data, what happens to you?’  Really focusing me to think about micro behaviors about what happened to me. For example I’ll talk about a paint system, but it’s like if I’m a paint molecule, what happens? How do I get made? Where do I get pressurized? How do I actually get into the paint gun? How do I actually, as I’m going through the air, what am I thinking about? Things in very very small increments and then I turn around and run and go see Clay and he would talk about things in decades. And so this notion of being whipsawed between different perspectives again helps you just kind of see that problem or see what you’re doing from so many different actual angles. And so to me the really important part here is to make sure that we actually start to look at things from multiple perspectives all the time right. Classic ones to me is ‘what’s the flow of money’, ‘what’s the flow of information’, ‘what’s the flow of finished goods’. Always trying to make sure that we can see things from all these different perspectives because it helps me from an innovation perspective to know where the conflict’s going to be.

So this is the one I’ve been working on the most right now is with Ryan Singer. How many people know Base Camp? So Base Camp is a project management project collaboration type software Ryan and I have been really working on this notion of space and time. Which is where and when do people start a project, where and when do they struggle, and how do we actually understand those struggling moments, and can we understand the job of why people are doing things? And so, part of this is how do I look at data to actually align it? So, typically, you’d look at things like well here’s what happened Thursday, but what I would say is how do I actually back this up to say how does everybody who started a project what happened after day one/day two/day three/day four? How did how do these projects play out? And so, understanding space and time is very very crucial in terms of being able to have very good empathetic perspective. There’s a movie I saw that literally kind of typified how I felt or how I feel when I do this, which is this scene here. The Last Jedi. This is Ray, and she’s in a hole. And all of a sudden her image starts to show behind her and the image starts to show in front of her. And the whole notion is as you can see her raising her hand and snapping her fingers and then and then the snap goes off away. And to me this the symbolizes the fact of being able to turn around and look backwards and say ‘what the heck happened?’ and the ability to understand causality clear enough that I can look forward and say what’s going to happen and cause and effect is the way in which we see the future. And so to me this notion of understanding time and space for your customers, for your teams, for everybody. The notion of understanding how to play things out is really really important.

I do want to bring up to three things. One is this notion of guessing especially in innovation. I feel like planning is guessing. I get the project first day. I’m actually the stupidest I can possibly be at that moment and I put together a plan, and somebody – I call the Church of Finance – holds me accountable to that plan I put together. And especially if I’m in a large organization. But three weeks later guess what; I know I should change the plan. But what happens if I change the plan? Well you’re not following your objectives, the objective should be this and you should know what you’re doing. In innovation we don’t. And if you do you’re not actually innovating in my book. Innovation should be about the unknown. That’s why that’s why things like agile works so well, and lean start so well because you’re learning all the time. I always think about is reserving capacity and having deadlines to basically check in and being able to see it in a completely different way. The other part is lying. In terms of I don’t think of people maliciously lying, there’s many causes of why people lie. And part of it is omission is a form of lying. And so part of it is, I spend a lot of time understanding the types of lies and to be able to understand where am I most vulnerable and being able to understand how to get to the clarity and get to truth. What really is happening? what’s not happening? How do we see it? To me the hardest part here is measurement. We usually measure what’s easy to measure but not what’s meaningful. And then we try to make meaningful things out of easy measures. But the reality is measurement is the hardest thing of all. And once we can measure it then we can manage it. Then we actually can make it better. But we don’t spend enough time really thing about meaningful measures. And so the last part is one of things both Taguchi and Deming were hard of hearing and I was 18 and they would yell at me and I didn’t realize they couldn’t hear I thought they were just mad. So these things are like this PTSD of like ‘oh my god they’re yelling at me’. But the reality is they would all say that the world is not random. Randomness is our ability to basically say we don’t know and in some cases they would say ‘it’s lazy thinking’. And so what we end up doing is increasing the sample size to get statistical significance to a bad question is a bad idea. And people confuse what’s statistically significant to what’s important. They’re two different things. And so to me I actually have changed the way after reading this book. This is probably the most influential book and if you haven’t read this book it’s awesome it’s called The End of Average by Todd Rose an amazing author and Peter Molenaar is from Penn State, he’s the math guy behind it. So the other part of it is I’m dyslexic but I can actually see equations in my head. You can give me an equation I can literally play it out. But they basically taught me that “it’s more about cause and effect”. The moment I start talking about probability I’m talking about averages. The moment I started thinking about statistics it’s a fact that every number is generated in context and I need to understand the context that that number was generated and when you average it you actually strip away context, so you lose it. And so, he talks about how to cluster and how to see patterns in behaviors through time.
So Peldi, this is this is how I’ve been doing it for a while but over time this is how I improve my ability to have perspective; is I paint. I’ve been spending much time figuring out how to mix colors, how to do brush strokes, how to actually represent and, to be honest, to build abstractions in my mind of what was the interview I just did and how to actually convey it in a different way to build different languages. I’ve seven hundred and ninety four paintings to date. This one I did this summer I just want to see it on the big screen.
It’s a big file that’s why it’s taking so long. So I just want to appreciate it for one second. I like it that big!

#2 Functional systems

Skill number two functional systems: understanding how things work. There’s many many many many ways in which to talk about systems but the very hard part is every time I pull something up on Google. Nothing explains systems how I’ve been using systems and how Taguchi and Deming and everybody else taught me systems so I want to just talk about it for a second.
So it really gets back to levels of abstraction. My mom said something that horrified me. She said “it’s a word world”. And when you can’t read that scares the crap out of you. If everybody’s using words and you can’t read words and you can’t see words and you don’t know what words mean. How do you figure this out? And so part of it is my hacking of being able to figure these things out. To me meetings and marketers are usually full of words make it easy, make it fun, make it fast. Right? But what does all that mean? And it all has different meaning and different context. And so just aggregating all the requirements together without understand the context you’re used, in I’m screwed. And so for me it’s really that the English language blows. And half my time is spent unpacking these words down to actions. What do people really mean by fun? There’s eight ways to cause fun – what are the four we’re going to use? How do they work? I only have money for two, which two are we going to pick but I can’t do it all? And so part of this is the aspect of getting away from just the marketing and positioning down to what do I actually have to create as experiences.
So again, yelling in my ear, “you don’t know what you’re know you’re doing if you can’t do a process”. So the interesting part here is I think a lot of us took this the wrong way that everything’s about process especially the Church of Finance because let’s be sure, sometimes, quality is a little part of that church. But the reality is what he’s saying is you need to describe what you’re doing. You need to know how to talk to other people about what you’re doing. You’ve got to talk to people how it works. And so, in most cases the process was not the thing to follow, it was the thing in which to help you articulate to everybody else how it worked. And so you can get to common language and common definition as opposed to ‘hey, I’ll write down the process, here, you follow the process’ and treat people like robots. That’s not right. So the initial part to me was learning this thing called SIPOC – suppliers, inputs processes, outputs, consumers. And having conversations about who are the consumers of the output you create? What’s the quality level? So just because I made the list is the consumer going to use the list whether inside the company or outside the company? Using this at all levels of the organization. But it focuses us on understanding who’s going to get what, what’s going to happen to it, what value adding are we doing to it? What’s the outputs we’re trying to deliver? And what’s the value from the from the customer side? And it forces us to have very very meaningful conversations end to end as opposed to just what are we going to do.

So this is where Taguchi kind of blew my mind, because Taguchi came back and said ‘no, no, no. Systems are about functions’. I said ‘functions? What the hell’s a function?” He said ‘well, a function is something that you put together and that when you put the system together it actually does a complete new characteristic of that system’. So when, you know, what causes a plane to fly? The plane has to fly. But what systems have to come together to cause flight? But he would talk about the differences of what we would say what are the inputs? What are what are the control factors what things do I have responsibility for? What’s the actual outputs and what are the measures? The interesting part is this this notion of what is measurement is the trickiest thing in the world. I spent probably 30% of my time figuring out measurement systems. My belief is the people who actually break through and do measurement systems better will own the world. And when you can’t measure it well you can’t actually improve it. And so part of this is being able to understand what function of the system do how do I measure it. But the key that Taguchi actually added was this notion of noise factors. At some point in time there’s variation to the system I’m building things that influence it. Variation that comes in, variation that happens inside the system, variation that happens outside the system. They all influence it. And what we used to do is we’d call that root cause. The root cause. Because the temperature went up in the in the server room and so all of a sudden the servers went down. It’s like no I need to make it robust to temperature. I need to figure out how to actually make sure it can handle the different noise factors and so it focuses you to have conversation of not only how is it supposed to work, but what are the things that that actually can hurt it from working so you can talk about how to make it more and more robust in different methods around it.

So here’s the thing, Ryan Singer and I are having a conversation other days like we were talking about earlier this summer around this whole notion of objects. Object-oriented kind of systems and function-oriented systems and so we had this argument where we’re sitting drinking water. He goes ‘there’s a cap and a bottle and I want to create the ideal cap and the ideal bottle and put them together and they work’. And so the whole notion is the engineer of the cap and the engineer of the of the bottle. The fact is it’s these are the two things I’m going to go build. But the reality is what I would say is but that’s not the functions that one of the key functions is sealing the water and the seal is actually the interface between the bottle and the cap. And understanding the variation of the threads on the cap and the threads on the bottle become a very critical thing and so I can specify exactly what it should do but because of temperature it’s going to cause us to go back and forth and nobody actually is responsible for the whole aspect of sealing. And so part of this is by seeing things through the functions right as opposed to the objects you see a whole different side of the world and you can actually start to understand how to affect them and actually have an impact on them. So, here’s the here’s the example we talked about a plane. How does a plane fly?

Audience Member: Magic!

Bob Moesta: Magic? That’s one

Audience Member: Lift.

Bob Moesta: Lift! How do I get lift? So it’s a combination of in some cases it’s the wings. It’s actually the engines. What else do I need?

Audience Member: Wheels.

Bob Moesta: Wheels! And I need the fuselage. So what happens is we have these subsystems that have to be able to go into it right. And it’s how do I actually create lift to do that. But once I see the lift and what are the things. So again those things come together to create a whole new function that not one of those things create. Not one of those things can fly but together they can fly. But all of a sudden it’s like how do I think about the next level down. What is the subsystem? And so I start to look at and say let me take the engine, right, and now put that is the system or subsystem to the plane. What are the inputs for that? It’s the fan blades it’s the fuel it’s all these other things. And the measure there is control thrust. How do I actually break things down from a functional perspective as opposed to an object perspective. And so Ryan and I had this whole notion of if you look at registration – sorry Mark I’m going to pick on the registration form – there’s a whole bunch of objects I need to actually register for this conference but the reality is what are the functions in there, and what happens to that data, and what’s the experience that the consumer has, because half the questions you asked in the form when I had to  register for somebody else. I had no idea what the answers were. But oh, by the way, they were required! So all of a sudden without understanding what are you trying to do and what’s the real function here you end up creating things that just have objects that say ‘oh this is required’ without thinking through the experiences without thinking through the functions.

So here’s the other part. Once you have it that way you have to also talk about the super system. Where’s that plane going to fly? Different altitudes, different weather conditions, all these different things the ‘where’ aspects to it. So part is I have to start to think about the super system that it lies in. And so part of this is now I can actually see how something works as a whole. And for me it goes back to time and space. Sorry. But the reality is I have the system in the middle and it’s part of the super system and that that engine is the part of the subsystem. How does it actually get assembled and what happens to it over time. It gives me a frame to start to see how things are going to play out. I can start to see all the problems. I can start to see where I need to actually think about things differently. My thing is as most people spend the time figure out what’s the right system I have to build without thinking through the matrix. And this is Gearhart Altshuler who basically is one of the primary inventors of this fabulous man built thing called the theory of problem a theory of invented problem solving. It’s phenomenal work but this is being able to think through systems from that perspective. Right. There’s lots and lots of stuff on systems theory – everything from Jay Forester who’s like I consider him like the godfather of systems he talked about his economist, right to Peter Senge to a whole bunch of people but the reality is is this notion of trying to find functionality Tuguchi is the only one I know who basically is not and I’m trying to get out of my head what I’ve been doing because I’m a practitioner I’ve just been doing it. I really don’t know how I do it. And so this is my first attempt of trying to get the stuff out of my head.

#3 Consumer progress

So this is the whole notion of value, what is better, and jobs to be done. And so to me, ultimately, jobs to be done was invented because of the word value and to realize that people value things in different context and that I can get a bunch of requirements but in different context you value them in different ways. And so when I was doing something called QFD (quality function deployment) I realized that I was collecting all these requirements but the weighting of what was important depended on the situation people were in. And so that’s where, kind of, jobs was born from. And so that aspect is trying to frame the solution by saying ‘let me understand the problem the context people are in’. ‘Let me understand the outcomes they have’. So I can actually then go design the solution so it’s framing this what I have to go develop way better without going into the designing of the answer. So it’s almost like hold back don’t come up with any answers yet. Let’s just talk about where, when, who, why.

And this is where what I would say is context creates value. Context matters here. I would say “do you like steak or do you like pizza?” People say, “I like both”, but if I take the last time we had steak and put pizza in it, how well does that fit? Not so much. I would take steak and put in the pizzas. It doesn’t work either. And so, in some cases your product might be undervalued because people are just using it in the wrong context. And part of this is understanding of what is the context is wrapped around how people use your product right. So, there’s another book that influenced me which is this ‘Aspect of habit’. We are creatures of habit. If it works and we can do it once we will do it over and over and over again; we don’t really want to change. But the reality when we change it only comes from a struggling moment. My belief is demand actually is created only when people struggle. If there is no struggle, people don’t change. And so everything I do is focused on where’s the struggling moment. What are the people trying to do what can’t they get done and how do I build a new solution feature to it?

So if I can’t find struggling moments I actually don’t innovate there, because I don’t believe it will happen. The way that I view this is that I have some solution A and I use it a little but with little hires. But as I’m using it My Struggle builds up and finally I’m like OK enough is enough I got to go find something else. So then how do I go find something else? How do I pick B? What is it and what are the new struggling moments these are actually not the same struggling moments as it’s all of a sudden ‘hey I got a better phone but the battery is dying’. All of a sudden there’s all these other new struggles a part of us being able to understand where is there struggles and understand the cause and effect, cause and effect is the key. So, two tools: one’s called the timeline. Like any good crime there’s a timeline. There’s a first thought. There’s passive looking. There’s some event that then goes to active looking, where they start to look at it. And they can look forever but then all of a sudden they have to decide. When they’re deciding they’re making tradeoffs. And so every time somebody switchs, every time somebody hires your software they go through this process, every time they fire your software they go through this process it’s the same thing of how people change. What I want to do is I don’t want to know when they’re active looking what they want because they just make – can I say the ‘S’ word? – crap up. They make crap up. Right. It’s like oh I want this all I want that. But the reality is is it is until they decide to say I’ll give up this so I can get that, actually I’d rather pay a little bit more to get this. And so you start to realize that there’s a whole bunch of tradeoffs that people make. And, by the way, when they buy in committees where the value code is actually locked in, they don’t value things back here. They value at the moment that they decide that they’re going to purchase whatever they’re going to purchase. Part of it is finding out those things.

The other part is this. Mikey, where’s Mikey? Mike! There you are. I know you were there. Mike talked about this morning there’s push there’s things that make people make progress but there’s hindrance. I have it broken down into four different type of forces one is there’s a push at the situation that says I need to do something new. Why in the world do I need new software? They have no idea what they want, they just know they have to move. If there’s no push, there no struggling moment, they’re not going to do anything. And then at some point unless they have an idea of what’s possible this is where they just – I’m sorry I have to use this one – this is where people ‘bitch but they don’t switch’ I say “bitchin’ ain’t switchin’!”

In the moment they see the new thing they’re like Oh my God this is great. Oh this is awesome. This does everything I want to do but then the reality hits and there’s two underlying things there’s an anxiety force that comes in there’s like this waterline right here which once they see is like, oh yeah, what am I going to do with all my old data? How am I going to migrate this? Do I have to train a whole bunch of new people? And by understanding this is the anxiety of the new. And then there’s like Oh yeah, but I love this part, the service for this company’s been great, and so there’s all these habit forces that are at play and so part of it is being able to understand how to actually help people make progress. Getting rid of the old. Just so you know when people fire you as a software company in their mind they’re making progress. You need to know what that is. Nobody changes to go backwards. What I would say is the irrational becomes rational with context. And if you think that they’re irrational about their decision I would say you don’t know their context because once you understand their social-emotional context you will actually understand what they’re trying to do.

I think the biggest key of jobs is being able to understand the tradeoffs that people really make. So a friend of mine buys a brand new car, an Audi RS7 anyone know that car? Gorgeous, right? Pulls up in it. I go to get it and it goes I love the car he goes “Yeah but it’s white. It’s like a ninety thousand dollar to one hundred thousand and I’m like ‘what do you mean it’s white?’. He goes ‘Yeah I wanted silver’. What do you mean? He goes ‘well I would’ve had to wait three weeks.’ He goes ‘my lease was done and I didn’t have this and I didn’t know how I was going to coordinate it and they weren’t sure they could really get a silver one so you know I just took the white one’. So the notion here is that even though he wanted silver he’d rather have it in time and have it in white. That was closer to the color he wanted than the black one.

And so all of a sudden you start to realize people make tradeoffs all the time. We make tradeoffs on every purchase we make. And the question is ‘what are those tradeoffs’. And so Frances Frye wrote a book called Uncommon Service and the best way to say it is, ‘you need to figure out what you suck at and what you should suck at’. So for example Southwest. They suck at food. They just do. Do they care? No! You’re not going to fly because the food. No! They’re on time and they’re actually lowest price. They have all these different things going for them. So there’s the thing is you can’t do everything. What are the things that you can suck at and still own the market. You can’t be good at everything. This is where jobs helps us figure that out.

And to me I always love Jason’s quote “a kick ass half, is better than a half ass whole”. Again I’m quoting you might have to bleep that, sorry! But that’s Jason right. And so the whole aspect here is how do you figure out what’s the awesome part of your product and they’ll look past some of the other things. The planning is guessing  is equally as relevant for consumers. Who here knows what they’re going to have for dinner next Sunday night? Nobody. So how in the world can I talk to you about the next innovation that you want for your company? Because it’s something you don’t even know it’s possible. You can tell me the outcome you want but you can’t tell me the underlying technology. You can’t tell me anything about the solution I should be building. And so the notion is trying to get consumers to think about the future is futile, it’s actually harmful because, let’s be clear, I learned from hard knocks. I built exactly what they told me and then they said no. A hundred times. A lot. And you start to realize like what didn’t I hear? How didn’t I hear it? And the reality is that part of them is lying. Lying by omission. Lying that they don’t know. Lying because they don’t want to admit they really have a problem. So part of it is you have to get really good at understanding consumer needs. What are they struggling with? So what did I do. I went out and learned criminal and intelligence interrogation methods and so I talked to consumers as if I’m interrogating them. I literally use these techniques on the slide here to say I literally play back the story wrong to make them fix it. I try to make sure that they tell me their stories as clear and concise as they can. And when they don’t have language I bring prototypes to them but I don’t really care what they want. I want to know what they did and what they’re trying to do and so to me this is this is a very important part of jobs. Nothing I don’t think I have anything to say on that one.

#4 Experience design

This is probably one because, I have the other two or the other three, his makes this a little bit easier for me. But the reality is that a lot of times we think so much about the products itself as opposed to the experience from the consumer perspective and ultimately trying to build the best product does not guarantee you have a great consumer experience. And so, it’s understanding what are the real experiences that people are having. And this requires people who have ability to sense. A lot of the entrepreneurs that I work with they have this notion of, like Jason Freed he has this notion, like ‘yeah this is too clunky’. What does that mean? And he can actually tell you about every aspect of it. So, to me this is the difference between UX and UI. I’m sure you guys have all seen that before, but the reality is to be asked this isn’t actually it as well because this is better where they’re worried about what’s in the bottle, here they’re worried about how people getting it out of the bottle. I saw this one as well I like this one. UI vs UX. It’s the thing is I still need to build a better spoon but I need to know how it works and so I need to understand the consumer experience as I’m trying to create first and understand the tradeoffs I’m willing to make along the way. So, to me I talked about at the beginning who, what, and why. Which is really asystem. What why and how are really systems. What am I going to build? Why am I going to build it? How am I going to build it? That systems. Who when and where is really jobs. And so the ultimate part is that experience design is really about putting those two things together and figuring out how do I actually design systems to do jobs and there’s lots and lots of tools around that. But my thing is you need these two things to basically get there but you still need to execute on the experience design. Understand the experiences. By the way, what I would call the big hire – the sales experience of buying your product and the using of your product in terms of the struggling moments by people actually who are interacting with it on a daily basis you might not get fired, you’re more likely to get fired by not doing the little hires well but you only get hired if you do the big hire well. And so you have to be able to understand those two things.

So to me consumer experience is the biggest of all and being able to understand how to measure. Measurement is the hardest part because we tend to be very subjective and we can get very concrete about the product and what it should do versus the whole experience which includes social and emotional pieces. So being able to actually be good at understand those experiences is critical. This is the whole notion of hey I got a recipe I want to make this. What’s the experience of not only basically going to the grocery store but all the way to eating it and cleaning it up. You have to think of the entire experience and how do people feel socially, emotionally, and functionally and where will be situations when they will actually pick this recipe and situations where they would not pick that recipe and why? Understand the jobs of how people are using and not using your product. Once you have it then it’s a question of where are the critical points -and is it really about minimizing the negative. Or is it about maximizing the positive, to be honest, again I feel like in some cases because it’s low here I actually get greater satisfaction because there’s two low points. When it’s all good, it typically starts to numb out. And so part of it is knowing some of those techniques around how to design and design better.

Lots and lots of resources here. Like this, I would never confess to be an expert here but I again I feel like because I have a better way of understanding the world it makes this part easier for me. But there are many people who are way better at this than I am.

#5 Prototyping to learn

The last one though is this one, and this is really about, so I talk about context creates value, and then I talk about contrast to create meaning. And so to me prototyping is about creating contrasts so I can learn so I can understand what people mean. And that’s how I unpack things. Here’s the thing as a dyslexic person I think of it as the greatest gift I ever got, because it’s literally forced me to think about things in such a different way. So, the first thing is most people start out thinking they’re going to get an A because they have a rubric somebody tells them how to get away. I can’t even read the rubric. And what I’m used to is starting with a D. But the only way I got from a D to a C to a B was reps and prototyping. So instead of reading a book once I’d have to read it five, six, seven times only looking at the big words and guessing but I got comfortable with that uncomfortableness. And so the notion is where everybody wants to go in and study, I’m want to go build. I’m want to go test. I want to go find things out. And so to me the gift I have is that hard working – again I think it’s a little Detroit, a little bit my mom, a little bit my dad – basically saying get harder with it but the reality is it’s built a system for me so I can actually prototype way faster than everybody else. I think if you have a single biggest thing of how I’ve been successful is I can prototype ten times better in ten times faster than anybody else. And I’ll tell you the secrets.

The first thing to me is I don’t think of prototypes as physical things I think of any decision I have to make any place where I have to make a tradeoff. Any place that I don’t know something. Anytime that I have options I’m building. And what I’m doing is I’m using it as a mirror. I’m not trying to say what the answers are. I’m using prototyping as a mirror to reflect the value code of what’s important and why. So in terms of giving consumers things to test I’m actually giving it not to find the answer but to find out why these things either resonate or don’t resonate. How would they pick them? How would they choose them? And so part of this is being able to understand what’s important to them so that I can build better things. I’ll give you an example a little bit. This really roots back to Deming, again I think all roads go back to Deming, Deming for those who don’t know Doctor Deming the guy who went to Japan in 1949 and helped MacArthur rebuild Japan. He’s the father of the Toyota production system and basically lean – more or less. And I got to learn all the stuff from him when I was 18/19 years old. The thing to me is that applying that process of plan, do, check, act to this divergent and convergent thinking is all of a sudden how I prototype. What’s possible. How do I actually figure out mental prototypes to say what are the five different ways we can go? And I don’t want different ones, I want really different ones. Contrast creates meanings so if I can understand what’s contrasting. As I decide I actually need to figure out how are people going to choose? What are the tradeoffs I’m willing to make?

So how do I actually use prototyping to basically answer this side of the convergent thinking. Two completely different sets of prototypes to think about. Now 1987 is when I basically learned this but it’s what we call the prototyping process plan. Plan design build. PDBEL (plan, design, build, evaluate, learn) and it’s all about a series of those things. The reality in 2001 that became agile, but the reality is as I’ve been I was I was probably doing it for almost 15 years before that and I didn’t know what to call it again just a practitioner. But the reality is when you start to look at is planning is articulate. So for example most of the way we describe prototyping is ‘what’s the question we’re trying to answer’. On the red line people talk about verifying everything. On the green line they’re using prototypes to learn where are the limits? How can I fail? How do we actually understand where the different limits of what I have? And understand how to design sets of prototypes. Not one. Not A/B testing to understand what is the range of things I can actually build and I’ll talk about that but the reality is like, here’s the thing, this is probably the single biggest thing that helped us at Ford, we had a waterfall process and we used to have to design the engine and have the engine done before we can do the transmission. So our development time was seventy two months. Seventy two months. Six years. Toyota’s was thirty six months.

And so what we learned was the fact is they used an agile type process and the idea of noise factors and controls factors and what they did is they built something called the concurrent development where they could actually work on the engine and the transmission and to a set of prototypes about integration but they had rules of how they actually could work. And so it allowed us to cut literally half the development time just by understanding 1)to move it to an agile notion but 2) then how do we actually develop concurrently. And so the whole notion here is how the way we prototype, the kinds of prototype, are critical. Most of the time when you’re in the waterfall it’s waiting. I can’t tell you how many times it’s like you go to a team and like ‘what are you doing?’, ‘well I’m waiting for them to finish this’. Waiting is like the worst swear word of all to me. Like what else could you be doing to help you learn. And the notion of a small change is like that, I think Bethany said it this morning about the fact of just making a change that takes six months, there’s no small chang. You change one thing it’s got to change 50 other things. How do you actually identify the interdependence? How do you understand how to make things modular? All that has to go into how you think about the prototypes you build in the system you end up creating.  While on the red line side it’s like simultaneously below pushing the limits. I can’t emphasize this one enough is too many people talk about failure but they don’t talk about why we fail. You want to fail because you’re pushing the limits. You’re actually making you go faster, you’re making you go easier, you’re making whatever you’re doing. But where does it break? So it’s about pushing to break not pushing to fail. Anyone can make something fail it’s like I want to push the limits

So there are four types of prototypes. Learning prototype to answer critical development questions so for me we actually do sprints and we really frame one question or two questions at a time and it’s all about basically framing work that we can answer. Small questions. So if a big question or big thing that I have to go do I’m going to break it into small questions and that becomes sets of prototypes. Communication prototypes, by the way, this is I think the most critical thing especially when you have cross-functional teams is how do you actually build communication prototypes that enable everybody on the team to have a common language. The common language thing I think the biggest problem with teams is there’s two things; We use the same word and we have two completely different meanings and we really come back to it one hundred times. If you really have a meeting three times and use the same word and nobody’s making progress on it, you need to stop and unpack that word because it doesn’t mean the same thing on both sides. The other problem you have is where people have used different words that mean the same thing and you’re arguing about the same thing so you spend an hour arguing about the same thing. And so part of this is being able to get to that language and get to understand it’s a building communication prototypes helps you there. Integration prototypes by the way had no notion of what an integration prototype was. We thought everything was about verification prototypes of forward in the beginning just build something to verify it works just build stuff to verify it works and the reality is as they were doing 10 times as many prototypes as we were and learning so much from it and by the time it got to being able to launch it they knew what tweaks to make. And we literally almost had to start redeveloping.  It’s crazy

Types of prototypes. Has anybody ever seen this one before? This is … Ulwick and what’s his name? These guys are from University of Pennsylvania but the notion is how much money and how much time do I have to learn to answer the question. And this is the kind of prototype. Is it a focused prototype on a specific attribute or a specific set of attributes or functions or is it a comprehensive prototype where I’m looking at trying to put it all together and is it a physical prototype or is it a conceptual prototype? And so part of this is as I look at the questions I’m trying to answer. What’s the portfolio of questions I can ask? And so we went from having to build everything physically coming down here and being able to do focused conceptual prototypes that enables this design way faster. And as we added them up we could actually build less physical comprehensive prototypes. And so being able to understand how that works is really again another important thing to me. This is the last of this one but this is like this is the thing that made me a superstar I think at the end of the day is that Taguchi who was at Nippon Telephone and Telegraph he won the Deming Prize in Japan three times personally for the work he did and this is one of them which was for this work here. But he basically always used to say A/B testing when he would call one factor to type testing is nothing but engineering security because what’ll happen is you end up saying Oh we’ll try these two thing which one works better. Oh and B and then we’ll do it again and we’ll pick another one and see it. But will happen is that one thing changes we don’t know why B was better. We don’t know why it is. So, when I have to take one thing out or one other thing changes in interdependence I literally go back to zero every time. What he taught me was it’s like playing whack a mole – solve one problem, create another. Because we wouldn’t know how the system worked.

He basically said ‘No how do I actually think about things as control factors and noise factors and literally be able to design things so I could actually get the data out and understand how it works’. So, then I can optimize for speed time performance etc. And so the reality is this if I did a full factorial it’s there’s 81 possible combinations. But he showed me a thing called orthogonal array so I could do nine of these experiments but predict 81 so I’m 90% more efficient than if I did a full factorial. The reality is because I’m changing everything simultaneously, I learn so it becomes more reproducible and I can manage the tradeoffs. And so, where people would be able like what the wave forward of having me do this is we’d doing a parallel path. I’d go solve it and something else also go solve it. And what would always happen is I would come back faster because they would do one factor at a time and then they go to verify it wouldn’t verify because they couldn’t tell why. And so, as a very young kid this is one of the things that kind of made me a very early hero is being able to just do this and I knew nothing about half the systems I was working in.

So, here are the five skills:

How to see the world.
How things work.
How people work.
How it comes together.
How to learn.

That’s what’s made me a very successful innovator. And my belief is that everybody has their own set and everybody has their own way of doing this. But to me I’ve been very successful – it’s not just any one of these it’s the set together.

So, some common elements which you realize is asking a lot of questions. Again the gift of dyslexia.Does anybody have one of those kids where they ask a thousand questions you like ‘oh my god please go away’? So, I was one of those kids. My mom actually gave me a rule that if she let anybody come within three feet of me please go talk to them. I don’t want to hear anything anymore. But to be honest I’m always asking questions. The way Clay states it is questions create spaces in the brain for solutions to fall into. And so asking and getting better at asking questions is what I think innovation is all about. Being humble and saying I don’t know anything. At 35 my mom had told me never to tell anybody I was dyslexic because she thought I’d be labelled; but at 35 I finally I had too much going on, I had a couple of health issues I basically started to tell people I was dyslexic. And the reality is being very stupid about things allowed me to ask all the stupid questions, which were all the assumptions they had in place. And so, my thing is just be humble to say you don’t know so many people will fake that they know something when they don’t right. And, to be honest, I would much rather go into something and start from the fresh eye of nothing than start with something.

How to maximize

This is another thing that comes back is like whether it’s how do I do as little research as possible? How do I do as few prototypes as possible? How do we actually figure out how to do this? And so to me as a combination of doing as much as possible, with as little as possible, as fast as possible. That’s where all this these techniques and tools for me have come from it’s like I never had a lot of money, I never had a big way of doing things like I just got to figure it out and how do I figure out better ways and get smarter and do it smarter not harder. All right this one I can’t emphasize enough I feel like this is the thing that’s missing in a lot of innovation is really spending time to think through time and space; where and when are people doing things. Who is doing what. And spending this time to actually get the right data sets to understand behavior and the experience. I think if I look at my current work that I do 30% of my time is unpacking. People use the word fun, easy, fast. What do you mean? Where? How? Who? It’s all that kind of work

So I’m going to tell you a story from way long ago, one of my first projects. I’m 20 years old. Twenty one years old at this point. And there’s a paint line at Wixom plant in Detroit. The plants shut down now. But the way we paint these cars you decode them and then you basically go through the robots and they get painted. And as they come off the line they be paint problems something called Orange Peel and runs in drips. And at some point they had about 150 million dollars of rework going on and they had a they had a very big team working on it. Of all the chemists and the robot people and the chemist and the paint and the operators etc. And I sat in the back and I just listened. And all I was listening for were control factors and noise factors. I was listening for what are the things that you can change that actually will affect this and how does it work. I knew nothing about paint systems – I was electrical engineer. The closest it came is that they would charge the car with voltage and they charge the paint. So the paint in the car would actually come together. And so part of this was as me sitting in the back like okay. And Taguchi was coaching me at this point and saying you know just listen for those factors that what they control; what I can control the viscosity of the paint, we can control the pressure of that paint, we control the speed of the robot, we can actually control the speed at which it goes back and forth, and the number of times, we can change the voltage, we can change the polarity the voltage. I’m just writing all these things down and like okay so we’re going to go off and we’re gonna measure the number of cars that come out with orange peel and paint runs he goes “No no no it’s not right. Don’t measure the problem, measure the function”. What does that mean? He goes don’t measure the problem as if all problems are problems variation. Figure out the functional measure that describes this. We went off and we started to talk about this. Sorry I get all that done. We figure out those factors. But I went off and basically found out that the real part of the problem was the thickness of the paint was varying over where it was. And part of it was how do we actually paint complex parts that literally whether it’s a vertical or horizontal surface. And that in some cases it gets sags. Right it’s like if you put too much paint on it will stick but it will start to sag down. And so he said how do we actually figure out how to actually reduce the variation because if it’s too thin I get orange peel or if it’s too thick I get runs in drips and sagging. And what was happening is they fix one problem and they cause another one. And then they fix that one and they caused another. So they were just kept going back and forth. And so part of it was OK, we got it. So we went off and we took this is this orthogonal array we did 18 experiments but we did it some very complicated parts so we could understand basically how to do this very quickly so in a matter of four days we’re able to run the process 18 different ways. I just put in what for example a one is like the voltage drop. So is it 250 volts. 180 volts. 120 volts.

The crazy part is I didn’t know what is going to happen. Mostly we’ll try to test because they know what’s going to happen. I was testing cause I didn’t know. And so what we were able to do was come back and say we’ll collect the data. We could put it back there in a week. I came back to the team PHDs in chemistry all this thing I’m like, “I think you need to change this this and that”.  They were like ‘kid, who are you?’. You don’t know enough that I’m like OK here’s what I did. I showed him the data. Yeah. And they’re like the theory tells us that the voltage should be this way and it should be this polarity and you’re telling us to reverse the polarity. Like I don’t know why I’m just telling you what the data has basically to do with it. So it’s the notion of tech doing the technical data. At some point they said all right we’ll try it and the plant manager was there and the results was we reduce variation by almost 40%, we reduced rework by 83%. So from $150 million to about $25 million. Sped up the line by 14%. 20-year-old kid who knew nothing about anything. And so my point is by learning these tools and these methods and being able to dive into the depth of them and see the system and see what’s there and, to be honest, prepared to fail, prepared to learn, prepared to build contrast, prepared to push. That was one of my first successes. To be honest all that happened was ‘you need to go work on this project’, ‘you’re going to do that’ and they moved me around and all I did week after week after week was basically do these kinds of things. And I worked in everything from metals and injection molding and glass and hundreds and several hundreds of products knowing nothing about them but learning how they worked so to me that’s the power of these tools.

So this is the other part and I don’t keep it at work. I feel sorry for my children. Can you imagine my children? These are my four kids. And the reality is I’m about to be an empty nester this year. I made it! And this weekend the youngest has said she’s going to stay because you never know they can go but sometimes they don’t stay. But for me it’s literally using the same thing thinking about college the system. What are the different things that caused them to pick the school? What are the different things we can actually think about what they want out of school? Forcing a conversation to think about it’s not just about getting to school it’s getting out of school. What do you love to do? What are you good at? And so by forcing to think about that with them basically – yes I did it – I built a little array. And the array was things like ‘hey you know do you want to go to a close school within 50 miles?’, ‘do you want to go to school farther away?’, ‘do you want to go to a public university?’, ‘do you want to go to private university?’, ‘do you want to go to a big school?’, ‘do you want to go to a small school?’, ‘do you want to be a liberal arts or to be science?’. And so as we went to these different schools I knew they weren’t going to want any one of the schools we went to, but as we went to them. What do you like about this one? How do you see yourself looking at these ones? Literally building the experience behind it. So all of them basically did that. So I took him o Wayne State which is literally in Detroit’s backyard, Hillsdale which is closed now, Miami, Ohio, Harvard, Trinity. You know we went to West Coast as well, but this is just by saying contrast. The notion of as they got on the plane and so they said they want to go far away the moment that they landed to see how this is too far right. They don’t know what they were. They have no idea! But by then having them score the schools and what was important to them and what was good I was able to get them to those three schools.

Here’s the stupid part. They’re all applied math majors. So let’s be clear they are all geeks. But here’s the thing is as I started to do this I started to realize how many other parents have this problem.

A lot.

So I actually turned it into a book. It’s coming out in August with Mike Horn. What’s next. Choosing college. And there are five jobs why kids choose college and what you can do is if you know the jobs that they’re in here’s how you can pick. Here’s how you can build a plan and how you can do it. And it’s written for the kid or the student. It’s written for the parents and it’s written for the universities. So this is one of those things people say like when do you not think about systems. Everything’s a system to me. Writing this presentation was a system.
All right. So where am I. Oh am I over. I’m out. Hold on can I do one more slide.

One more. No Two and that’s it. This is a bonus slide. But this is about supply side. So really what this is is bringing everything together. And what happened is this is for me the supply side is where I have a business and I want to go create something. But I actually don’t have any demand for it. And so my best example is where the hospital say I can prevent a heart attack. So we’re going to build a system to prevent heart attack. Has education has all these different things. And guess what. There’s no demand for it until you have the heart attack. So as much as they can prevent it the fact is there’s no demand. So part of it is how do I actually understand the progress people want to make and then feed this back here and design experience. So Ryan and I are talking a lot about this whole notion of supply side thinking and demand side thinking and you need to actually have both. But the reality is demand side which is the jobs part is basically where you have to decide two. And sometimes you want to design the best product and the best product for them is halfway. It’s just this good it’s just a little better than nothing. And you’re trying to they know I’ll this they can’t value the whole thing.

So greatest innovation comes from Deming. I was sitting with Clay Clayson on what’s your greatest innovation ever some people have seen that some people haven’t. But the reality is as it comes back to when I was renting cars with Deming and Deming would be like you know come on we got to get to the airport you want to be late I have to return the car. Right. And so it turns out that this is me pulling into the gas station with a rental car first thing on my mind. Holy crap. Which side is the gas tank? And you look in the mirror is trying to find the thing it’s not there and then you basically pull up and you’d be on the wrong side and you’d be argh! So what happened then is basically pull around and I did it that side of the wrong side. And then what would happen is like I pulled over and there’s Deming in the front seat yelling at me like why are you doing this. So at one meeting he basically looked at my boss and said you know what you need to fix this problem. This kid needs to fix this problem, so he made me go out and take pictures and do all these different things. And so in 1987 that’s what the gas tank looks like. Here’s the crazy part. Five years it took me to come up with that little arrow. I make I make no money on it. It literally has no impact on money but it’s one of those things where there’s just a little more comfort for a few people in the world. So when they drive somebody else’s car they don’t have to worry about which side the gas tank is on.

Thank you. All right. Sorry. Thank you.