Man of String

An Innovation Paradox: When More of the Same Makes a Big Difference

This article was originally published in Fast Co. Design on August 4th, 2011

At a time when we are constantly being told to value the new and the different, it may come as a surprise to learn that the standard, the shared and the common can be strong drivers of transformation. In fact, many of the innovations that have changed the world, including railroads, modern manufacturing and interchangeable parts, money, agriculture, containerized shipping, numbers, the internet, even language, only succeed because of standardization.

Organizations that are looking to transform their operations, their customer experience or even their industries can benefit from incorporating as many types of standard, shared and common features into their efforts as possible. These include:

Standard Processes

In 2009, Baptist Health System (BHS) in San Antonio, Texas, became part of an initiative designed by The Centers for Medicare and Medicaid (CMS) to reduce costs and increase quality in acute care. A physician-led Clinical Improvement Council for Orthopedic Care at BHS transformed its approach to hip and knee replacement procedures. Where previously each one of the system’s 40 orthopedic surgeons had their own particular way of doing things, the Council developed a single model of care for all five of the hospitals in the system. New standards included everything from pre-operative tests, radiology, operating room instrumentation, supplies and other equipment, to post surgery medication, food and nutrition, physical therapy and physician consults.

Within a few months the results were dramatic; BHS cut its readmission rate in half, and infection rates dropped significantly, providing patients with a measurably improved customer experience. The physicians were able to complete their surgical workload in notably less time than it had previously taken them. Nurses, technicians and other medical staff reported higher job satisfaction because they no longer had to worry about managing 40 different models of care. The procedures cost less, saving the taxpayers hundreds of dollars per procedure. In short, common procedures, as well as a shared goal between physicians and hospital administrators, have demonstrated the potential to drive transformation in the US health care system.

Common Goals

Apple may seem like a strange company to include in a discussion of standards. It is, after all, the company that exhorted us to “Think Different.” But during his tenure as CEO, Steve Jobs instilled a culture inside Apple that had nothing to do with the free spirited and rebellious self-actualization that its TV and billboard ads proposed. Instead, Jobs set high expectations and goals for himself and the entire organization and swiftly got rid of people who couldn’t or wouldn’t play along. And for their part, his employees are known not for their diversity of perspectives but rather for their uniform adherence to and advocacy of the Apple approach to product design and development. They all value deep collaboration (multi-disciplinary teams that have the same goals and work together on different parts of the same problem at the same time) and take individual responsibility for the success of the organization, not the other way round.

From this surprising conformity, Apple achieves an extraordinary level of innovation and productivity that has transformed not one but several different industries, including computers, music, phone and home electronics. Its recent results have been a series of highly innovative consumer products and services that have catapulted the company into the upper echelons of profitability, growth and consumer loyalty. In the last decade, Apple’s stock price has risen from around $10 in 1998 to $350 in 2011, its revenues from around $5.5 billion to $87.5 billion, and the company is currently growing at about 60%.

Common Platforms:

By 1970, Black & Decker’s consumer power tool portfolio was a hotchpotch of 122 different models, which between them had 30 different motors, 60 different motor housings and 104 different armatures. Each of these variants required separate tooling. There were few shared components or processes, leading to high costs in inventory ordering, storage and management as well as in tool production and manufacturing. These costs were passed on in part to the customer. In 1971, driven by a triple threat of offshore manufacturers, inflation and rising costs, and anticipated regulation requiring double insulation to protect consumers against electric shock, the Black & Decker management team and board decided that it needed to rethink its entire approach to the design and development of its power tool portfolio.

A concerted effort by the business over the next three years saw a massive reduction in variants, leading to just one motor, a huge reduction in space, facilities, resources and time needed to manage parts and equipment, faster production cycles and retooling times. Motor production labor costs were cut by 85%, armature costs by 80%, failure rates fell from 6-10% to 1%. New products were introduced to the market in weeks rather than months and prices to the consumer were slashed by as much as 30% while maintaining 50% margins. In what amounted to nothing less than a complete transformation of their operations, Black & Decker became so dominant in sales, price, variety and quality that it forced many of its domestic competitors--including Sunbeam, Porter Cable, Rockwell and even General Electric, among others--out of the consumer power tools market.

Shared Values

Every potential new employee at the online retailer Zappos.com is screened not just for capabilities and experience but also for likely culture fit. As a new hire, they receive five weeks of training, are immersed in the company’s culture and taught the company’s ten core values. Commitment to these values is so important to the company that it offers new recruits $4,000 to leave if they don’t share them. The results are clear. Voluntary staff turnover, in a customer service/call center industry plagued by attrition rates as high as 50% nationally, is estimated by some accounts to be as low as 10% at Zappos.

Meanwhile, the customer service ethos–“Deliver WOW Through Service”--is famously anything but common or standard. Unlike the vast majority of call centers, phone calls are not scripted and they are not timed. In fact, there is some pride in the fact that the record for the longest call (as at July 2011) is 8 hours and 3 minutes. The shared commitment to a common set of values provides a platform from which a highly differentiated service is delivered, transforming what would typically be the most mundane of transactions into a delightful one, and one that itself drives loyalty and rapid growth.

Standard Interfaces

Until the development of standard parts in the early 19^th century, rifles were built individually by hand. Expensive and time consuming to build and to repair, they were also totally incompatible with one another, rendering them useless if they malfunctioned in the field. Interchangeable parts, a powerful form of standardization, changed all that and ushered in the era of mass production,

Nearly 200 years later, a standard interface has further transformed the rifle, allowing a standard weapon to take on multiple functions. The Picatinny (Pic) Rail provides soldiers with a means to attach and detach weapon accessories like optics, lasers, bipods, and other hardware to the M-16A1 assault rifle. Since its introduction in 1995, it has helped to more than double the longevity and functionality of millions of the Armed Forces standard issue weapons. The common interface provided by the rail has reduced the costs and simplified the logistics of equipping and supporting 1.5 million soldiers and 1.5 million reservists, and increased the rate of innovation and growth in the small arms and accessory industries. For example, Aimpoint Inc., a manufacturer and supplier of high performance optics to the US Army and Air Force, has seen a fifteen-fold increase in revenues since 1997, since the rail makes it possible for more soldiers to be deployed with, use and service advanced optics and other accessories in the field. Most importantly, the rail has increased the functionality and efficacy of active-duty front line soldiers, providing them with a tool that can meet a variety of both specialized and general needs.

Standards are Critical Tools of Innovation

Most organizations get it wrong when it comes to thinking about standards and innovation. They think that standards are a necessary evil, important but dull, their significance limited to cost reduction and quality improvement. At the same time they equate being innovative with being different. This is provably wrong on both counts. Focusing on the similar, the shared and the common will provide a stronger platform for scalable transformation then trying to be different ever will.

Memory and Experience

This piece was originally posted in Fast Co. Design, March 8th 2012

They may play tricks on us and may not be always reliable, but our memories dictate which experiences we choose to repeat and which we don’t. Why not then design for memory instead of experience?  

If you had to relive a painful experience for either 60 or 90 seconds, you’d choose the shorter period, right? It seems so obvious that we usually don’t even bother to ask the question. But, remarkably enough, experiments have shown that you’d be overwhelmingly more likely to pick the longer period if, the first time around, you sensed even a slight lessening of the pain in the final moments of the experience. It seems that we tend to remember, and judge, an overall experience based on the intensity of our sensation at its end relative to the peak intensity during it. And, we tend to ignore the duration of the experience. So we’ll rate a mediocre vacation more highly overall if our final experience of it is highly positive. And vice versa. We’ll tend to discount a great holiday almost entirely if it is some way tarnished towards the end.

For those of us who work in service design and innovation for a living, this has profound implications. After all, it is one of our orthodoxies, part of the designer credo, that user experience is paramount. But what if it isn’t? What if user memory is at least as important--if not more so? What if memorable experiences are determined not by the value of the experiences themselves but by the value of the memories they provoke?

Does this mean that we need to rethink our work?

In some cases, I think it might. Take the design of the average retail experience. Typically the least compelling part of that experience for customers is the financial transaction, the point where they actually have to pay for their purchases. In most cases, regardless of whether those purchases are products, like clothes and groceries, or services, like meals and haircuts, the exchange of money tends to happen at the very end of the experience as a whole. So if we are truly most impacted by what happens to us last, it would seem that many of these experiences provide customers with the worst possible memory of them.

Grant Achatz, one of the world’s most creative chefs, is tackling this problem head on at his latest restaurant, Next. Like a theater that puts on a new show every few months, Next presents themed menus that change completely four times a year. The restaurant’s opening theme was “Paris 1906” in which diners relived Escoffier’s legendary cuisine at the Ritz hotel. This was followed by a “Tour of Thailand,” after which came “Childhood”, a trip down memory lane replete with PB&J sandwiches, macaroni and cheese and superhero lunchboxes. Diners book tickets online in advance, as they become available. The tickets cover the cost of the meal – which, like a show, is presented as a whole, not a la carte – including taxes, tip and, optionally, wine pairings. Once the ticket has been bought, there is no bill to be settled at the end of the dinner. This method of payment not only improves Next’s planning and budgeting abilities but also extends the pleasurable aspects of the experience for the diners all the way through to them leaving the restaurant and thus, according to this theory, likely heightens their memories of it. Reading the reviews on Yelp, it becomes clear how willing customers are to embrace these innovations (nearly every single reviewer appears to be a repeat diner at Next) and how evocative their memories of them become.

Meanwhile in retail, Apple has not only replaced the checkout and cashier paradigm in most stores with “on the floor” payment offered by any available staffer, it now provides an option to bypass the human transaction entirely. Its November 2011 release of version 2.0 of the Apple Store app enables shoppers in any of its US retail locations to use EasyPay on their iPhone 4 to pay for Apple accessories electronically. This means that Apple owners can choose whether or not to engage with a store associate at all. Apple’s efforts to improve the final part of the retail experience, by giving their customers payment options that include using their own beloved iPhone, serve to reinforce positive memories and, perhaps, influence future purchasing decisions.

Of course, not every coffee, meal, grocery run or shopping trip needs to be made into an experience. Sometimes, maybe most times, people just need their caffeine fix or a sandwich-to-go or snacks for the kids or some office supplies. But even then a transaction can feel easy and pleasant, in which case they’ll likely return, or difficult and unsatisfactory, in which case they most likely won’t. In higher stakes experiences, whether they have a reputation for being painful, like a visit to the dentist, or pleasurable, like a vacation, we should consider designing them to maximize these rules to transform people’s memories and influence whether they are game to repeat the experience or prefer to find an alternative. Where once this may have been the domain of a User Experience (UX) specialist, now maybe there’s a role for an expert in User Memory (UM) as well.

Milk and Water

As a child, growing up in a small town in south east England, the milkman was one of the most visible supporting players in our community’s life. Once or twice a week he’d show up early in the morning and you could often hear him before you saw him, driving up the road in his electric milkfloat stacked full of crates, as the glass milk bottles jiggled against each other with each slight bump in the road. The bottles were all identical, imperial pint-sized, and unlabelled. The only thing telling them apart was the colour of the foil cap which identified each bottle’s milk fat content.

Our family always ordered silver cap, which was full milk and had an inch or so of cream at the top. Rich, but not as rich as the gold cap milk which was almost sinfully decadent. From time to time, if we didn’t bring the milk in early enough the local birds would perforate the foil cap with their beaks and get at the cream. This irritated my father no end as he liked to invoke the paternal privilege of getting the first pour for his morning coffee.

It turns out that birds are lactose intolerant and that milk will give them diarrhea, but the cream has no lactose in it and so is a tasty energy-rich treat for them, as it was for my father. Even so only two species of birds, the blue tit and the robin, learned to drink the cream at the top of each pint. It seems that the birds first learned this many years ago when milk was delivered without the foil bottle cap. That protective innovation was introduced after World War I but in less than thirty years the trick of perforating the cap had spread across the entire blue tit population. Blue tits flock together for several months and the young birds evidently learn from their elders. Male robins, however, are fiercely territorial and will shoo away others if they get too close. So even though some individual robins did learn the cap perforation trick it never got passed on from bird to bird.

For several decades the milkman was such a prominent feature of communities across the country that a whole genre of jokes grew up around him. More recently he and his electric milk float have gradually, though not totally, faded from view. But I am still struck by the very idea that milk can be delivered to our homes in standard sized bottles, and how that differs so dramatically from water delivery. When I want water I simply turn on a tap and out it pours in an undifferentiated, unmeasured flow. I can leave the tap on for as long as I like. I can water the plants, run a bath, wash the dishes, fill a kettle, and I can use a different amount every time without having to order it in advance.

As I think about this difference some more, it seems to me that nowadays mostly everything that we need to be delivered is done so like milk, in standard sized containers. This is obviously true of products like cereal or baked beans but also true of paper documents via FedEx envelopes, cars via sea containers, and digital content like emails, movies, songs and websites via the packet-switching network known as the internet.

In comparison, our experience of water delivery is actually rather rare and getting rarer. Apart from water itself, the only things that get delivered to us as a flow are electricity, radio and TV. Of these, radio and TV are being increasingly delivered digitally, over the internet, and are therefore now more like milk than water. Meanwhile, the traditional electrical grid concept of central power generation and always-on, use it or lose it electricity is being reinvented from all sides. The days of cheap and effective rechargeable batteries for home and car, linked to small scale power generation facilities like solar panels, potentially and intriguingly providing us with a hybrid water-milk delivery model that may even feed energy back to the grid, are hopefully not too far off. And that leaves us with water, which we inherit rather than make. We know how fortunate and few we are who have this precious flow at our disposal.

So when it comes to stuff that we want distributed, we seem to be leaving the world of water and embracing the world of milk. Technology transforms our experience of flow into episodes and transactions, bottles and crates, boxes and containers, envelopes and packets.

I’ve recently started to have milk delivered to our home again, after a break of at least three decades. It was a decision based on choice – it’s really good milk – rather than on necessity. The delivery mechanism remains more or less untouched, but many of the details of the experience have changed. We no longer pay the milkman directly but order and pay online. The milk bottles here in Chicago are US half gallon rather than imperial pint, and the bottle tops are no longer aluminum but plastic. And we never actually see or hear our milkman in person, though he does send his customers a holiday letter every year along with a photo of his family. No one tells milkman jokes anymore.

Invasive Principles #8: Grow Fast, Spread Fast

Invasive species spread rapidly once they’ve secured their niche.  Zebra mussels have spread the length of the Mississippi in only two decades or so.  The killer bees have spread into large parts of both South and North America within 50 years.  Some species seem to spread almost as soon as they’re arrived, while for others it may take them years or even decades to secure their initial foothold and make whatever adaptive measures they need to ensure their ongoing success.  But in either case, their subsequent expansion is usually very rapid, so much so that it usually appears as if they’ve appeared from nowhere, as if they’re an overnight success.

Their ability to expand quickly is made possible partially because of their adaptations, opportunism and hybridization, but also partially because they are not initially constrained by native counter-adaptations, competitors, predators, parasites and imitators.  Once they’ve established a new, valuable source of resources, however, copycats will follow and start to consume some of those resources.  And so speed is of the essence, to get to those resources before anyone else does.

In the business world, as in entertainment and in nature, overnight successes are usually anything but what that implies.  More often, as the saying goes, “it takes a decade to become an overnight success”.  This is thanks to the lag phase, during which potential invaders have to adapt to secure their niche or prove the potential of their innovations. 

FedEx took years to catch on and nearly went bust more than once before redefining everybody’s delivery expectations and growing to become the world’s largest airline.

Geeksquad had an 8 year lag phase, but once it hybridized with Best Buy it grew from 50 employees with $3M revenues in October 2002 to 12,000 employees and $1B revenues in only 5 years.   Of course, imitators have since followed.  Over the last few years thousands of local, regional and national companies have sprung up to provide similar services.  Hundreds of them have explicitly imitated Geek Squad, trading on the word “geek”.  In business as in nature, imitators follow innovators.

Once Curves found the right combination of customer experience and business model, which included a much smaller footprint than traditional gyms, it quickly spread beyond its original 2 locations to over 10,000 worldwide since its inception in 1994, making it the world’s largest health and fitness franchise.

Invasive Principles #7: Exploit Under-Utilized Resources

Invasive weeds often take advantage of under-utilized and overlooked resources.  Native plants typically gravitate towards the most nutrient-rich soils and towards the places with their preferred level of light and water.  In other words they tend to exploit the low-hanging fruit, the resources that are the easiest to get to.

Would-be invaders are therefore often forced to take advantage of the resources that have been left behind.  If they are successful in doing so they find that they have no competitors, at least for a while, and so can succeed in their new surroundings.  For example, barbed goatgrass, which is native to Europe, thrives in California on soils that are low in nutrients and water but often high in toxins.  Barbed goatgrass can grow profusely on these soils, overwhelming native species that have not adapted well to growing there.

In the business world resources can mean anything from raw materials and energy sources to partners and employees, as well as to customers and other revenue streams.

Some innovators have focused on under-valued customer segments and other sources of revenues.  Enterprise targeted the occasional renter rather than the business traveler, their home rather than the airport, and the insurance company rather than the corporate expense account.  In doing so it left Avis, Hertz and others to fight it out for the same customers and became bigger than any of them in the process.

Similarly, Southwest Airlines operates largely out of regional airports as they had been overlooked by the major carriers and thus offered lower costs.  It moved from Houston international to Hobby field in 1972, its second year of operations, and never left Dallas’ Love field even after DFW was built.  Starting with a fleet of four planes, it is now the largest domestic airline in the USA in terms of scheduled passengers served (source: IATA).

In this new era of climate and energy awareness we can expect waves of innovation to disrupt entire industries and create brand new ones.  Significant innovations have already occurred when organizations have looked at their energy consumption and byproducts and have joined forces with other companies in what is known as closed-loop manufacturing.  Byproducts can be a cheap source of energy.  Even animal dung is not to be sniffed at.  The small village of Juhnde in Germany is almost completely independent of fossil fuels for heating and electricity, instead using the dung from its cows and pigs to produce methane gas which powers the village’s generators.  Though currently on a tiny scale it provides at least one model for cheaper, more sustainable energy.  Solar, wind and water energy sources are also significantly under-utilized.  The opportunities for innovating to reduce costs and/or differentiate and/or be responsible citizens are still enormous.

 

Invasive Principles #6: Hybridize

There is growing evidence that hybridization between non-natives and native species among animals, plants and microbes can give rise to invasiveness.  The advantage of hybridization is clearly the combination of the characteristics of the native species that have allowed them to adapt to their current environment with those of the non-native species that have predisposed them to disperse and spread.  The African honey bee was introduced into Brazil in the late 1950s where it subsequently interbred with the domesticated (i.e. originally non-native but now considered native) European honey bees.  The result of this interbreeding, the Africanized or “killer” bee, quickly began its spread north.  The European genotypes, which have been in the Americas for centuries, are slowly declining in numbers and are expected to disappear eventually.  The most recent research on these bees suggest that the hybridization process has not created a random genetic combination, as might be expected, but rather one that incorporates into the African subspecies the genetic evolution that has occurred over the centuries to better adapt the European subspecies to its environment.

Hybridization in business helps innovators improve the likelihood of success by linking their new offering, customer experience, technology or business model to an existing infrastructure or capability.  This tactic tends to have advantages for both the innovator and the hybrid-partner.

Despite its evident potential and its almost inevitable future success, the electric car has so far been limited in its success beyond the fleet category.  This is at least in part due to the lack of infrastructure that is needed to support the range that consumers expect from their automotive vehicles.   The Hybrid car has, by contrast, proven successful in a comparatively short time, partially of course because of the rising fuel prices during 2008 but also because cars like Toyota’s Prius require no new infrastructure and therefore present potential owners with no barriers to adoption.

Apple was not the first into the MP3 player market by any means but one of its most important innovations was to account for the existing investment that its potential customers had already made in CDs.  Providing them with an easy way to enjoy their favourite music on a new and attractive player proved wildly successful and completely eclipsed the other MP3 players that only provided the new technology.

From a business model perspective, Google may be recognized for its original innovation in search algorithms but its revenue generating model is entirely traditional, selling space and time to advertisers.  The television industry has been in existence for decades based on this same model of providing free content for consumers and providing paid-for access to the consumers for advertisers.  Thus Google has combined an improved version of a recent service, Internet search, with a business model from a different, but now-converging, industry.  This has created a hybrid that dominates the search industry, from which it took its product concept, and casts a threatening shadow over the conventional media, from which it took its business model.

Invasive Principles #5: Play nicely with other invaders

More often than not, invasive species seem to make conditions in their new environment more hospitable to other potential invaders.  In some cases they do this by removing native predators or competitors.  On Christmas Island the invasive crazy yellow ant attacks the native red land crab.  The crab itself preys on non-native plants and snails so its removal by the invasive ant paves the way for the settlement of further non-natives and for “rapid, catastrophic shifts in species composition from mostly native species to mostly non-native species.”

In other cases invaders change the environment itself in ways that are often beneficial to other non-natives.  Zebra mussels were first introduced into the USA in 1986 and have since invaded the Great Lakes and the entire length of the Mississippi river.  They have had a strongly negative effect on native animal and plant species alike but their reproductive and feeding behaviors increase water clarity and organic material at the bottom of the lakes and river, creating new conditions that facilitate the introduction of other natives and non-natives.

In the business world, any disruptive innovation creates new opportunities as well as new challenges.  Innovators should stay alert to the efforts of other innovators, even those operating in different industries, since they may present opportunities for developing non-traditional partnerships or for exploiting new business models, technologies, processes or services.  The development of portable, digital formats for music, e.g. the MP3 format, helped to all but destroy the retail music stores that dominated the sales of music from the 1960s through the 1990s, as illustrated in the 2006 bankruptcies of Tower Records and Musicland, at one time two of the largest music retailers in the US.  But it also facilitated the rise of a whole new way of accessing and enjoying music, from peer-to-peer networks like Napster, Gnutella and Kazaa, to online music stores like Amazon.com and the iTunes Store, to MP3 and portable media players, most notably the iPod.  The latter has spawned its own ecosystem of thousands of accessories and add-ons and integrated docking environments and has driven customer experience innovations in entirely unexpected industries like automotive and the major airlines.

Invasive Principles #4: Embrace disturbed environments and tumultuous times

Invasive species tend to find significant opportunities for success in two quite different types of ecosystem.  As described previously in Principle #3, the first is the isolated ecosystem, the type that has not suffered any kind of external shock for so long that its inhabitants have evolved no defense mechanisms against invaders.

The second type of ecosystem is, counter-intuitively, almost the exact opposite to the first, namely the disturbed ecosystem.  This type includes environments that are regularly, or have been recently, flooded, burned, built upon, deforested, polluted or in any other way altered.  Many invasive weeds flourish along road sides and railway lines, river banks, agricultural land and on the edges of forests.  Interestingly, there is some evidence that even native species which behave aggressively in stable conditions may also act invasively when those conditions are disturbed.

Human ecosystems can be disturbed by a variety of factors.  In the USA, for example, a combination of the growth in the elderly population with the decline in the number of primary care physicians is widely predicted to create a crisis in the health care system.  But for an invasive species this is a huge market opportunity as well and we should expect to see innovative business models and services arising to exploit it.

Other opportunities arise in ecosystems that were hit by sky-rocketing oil prices, swooning real estate prices and collapsing financial markets just a couple of years back.   As recently as September 2008 we saw the extinction of at least one business species, namely the Wall Street Investment Bank, and others will likely be threatened.  But the gaps left by the loss of these businesses will soon be filled by new services and offerings.  It is perhaps too early to say who will emerge as winners from the recession but it is likely that those who are currently buying up real estate at heavily discounted prices, those who are actively engaged in the exploitation of alternative energy sources, and those who are developing new lending instruments will be among them.

Of course, business ecosystems can also be disturbed by the actions of innovators.  These actions often create conditions that are conducive to follow-on innovations.

Invasive Principles #3: Challenge the status quo

Invasive species in nature are, literally, outsiders.  They travel from their native habitats, often hitching a lift from our global transportation, trade and tourism networks, to arrive in an unfamiliar place possibly thousands of miles from home.  In the USA alone, killer bees from Africa via Brazil, kudzu from Japan, hydrilla from China, and the gypsy moth from Europe are among hundreds of alien species that have become invasive.

As outsiders, invasive species tend to have two major advantages over the natives whose ecosystems they invade.  Firstly, the natives often have no defenses against them or the diseases they carry with them.  This is especially true of island ecosystems like Hawai’i whose isolation once gave it protection.  Secondly, the invasive species have no co-evolved relationships or affinities with any of the native species and thus have no commitment to the status quo.

Acting like an outsider and challenging the status quo applies to innovation in many fields of human endeavor.  In his hugely influential book that introduced the idea of paradigm shifts, The Structure of Scientific Revolutions, Thomas Kuhn wrote:

“Almost always the men who achieve these fundamental inventions of a new paradigm have been either very young or very new to the field whose paradigm they change… these are the men who, being little committed by prior practice to the traditional rules of normal science, are particularly likely to see that those rules no longer define a playable game and to conceive another set that can replace them.” (Chapter 8, The Response to Crisis).

In business, Richard Branson, the billionaire entrepreneur and adventurer, has styled himself as an outsider and refused to play by the rules of just about every industry he has entered.  He started selling records in 1970 when he was just a teenager.  He named his company “Virgin” precisely because he was inexperienced at business but nevertheless differentiated himself successfully by selling records at a discount at a time when no one else was doing so.   He went on to enter the recording business in 1973 and signed a virtually unknown musician named Mike Oldfield when no one else in the music industry would touch him because his “songs” had no singing.  Virgin Records subsequently sold 5 million copies of “Tubular Bells”, one of the highest selling LPs of the decade.  Virgin Atlantic made long flights a whole lot more fun and Virgin Galactic is currently poised to be the pioneer in commercial space tourism, its first civilian astronauts scheduled to enjoy a few minutes at the edge of outer space in 2010.

Invasive Principles #2: Speed up your cycles to get to resources earlier

Invasive species develop earlier and shorter reproductive cycles that allow them to get to precious energy sources earlier than their native competitors.

Eurasian watermilfoil is an aquatic plant that arrived in the United States, probably as a stowaway in the ballast tanks of a cargo ship, some time before the 1940s.  Its growth cycle starts well before most native plants, with the spring thaw, and it grows rapidly up towards the water surface and the sunlight.  Once there, it continues to grow rapidly, but this time outwards across the surface, creating dense beds that rob native aquatic plants of access to the sunlight that they need to survive.  This has two main knock on effects; it creates an ideal environment for mosquitoes but it also removes an important source of food and shelter for local animals.

In business, the annual accounting and tax cycle acts like a vortex towards which many other corporate processes become inextricably drawn.  Planning and budgeting becomes an annual process, an unintended consequence of which is the much derided but widely practiced fourth quarter spending spree.  Strategy, marketing, IT and other core business processes all follow suit.  What happens all too frequently is that the internal process cycles dictate the rate at which services and products reach the market.  This leaves significant opportunities for companies who can reset their cycles to match the need or desires of their customers.

In the retail fashion industry, Zara has made major innovations to its business model in order to reduce cycle times.  New lines take less time to go from design to production, are made in smaller quantities and are flown rather than shipped to the stores.  In all, Zara has reduced design-to-store time from an industry norm of 6-9 months to 2-4 weeks.  Once in the store, the lines stay there for no longer than 4 weeks, which causes Zara’s customers in its native Spain to visit the stores up to 17 times a year, compared to an industry average of 3 times.

This approach has paid off.  As at August 2008 Zara’s parent company Inditex Group had more than 4,000 stores in 72 countries, overtaking its main U.S. rival Gap to become the world’s largest clothing retailer.  Zara accounts for more than two thirds of Inditex revenues.