Innovation and development

Put all your eggs in one basket

How disciplined desire can improve strategic innovation and execution

In dynamic business environments, innovation and development are often key capabilities that are needed to take advantage of the opportunities provided by changing conditions. The old saying ”Do not put all your eggs in one basket” has little value in such environments.

Put all your eggs in one basket

To be noticed in today’s fast world, focus is needed. Leaders and knowledge workers should ”put all their eggs in one basket”, i.e. believe more strongly in something, and act accordingly.

The below text is an extract – go to the top of this page to download the entire article.

We should do that in four ways: Desire to change the world, change the world in an area we know something about, focus our effort on few things – that matter, and apply fast feedback and simplicity in our work.

The article explains why this is true, how it can be approached, and how to deal with the risks of putting all the eggs in one basket.

What we learned about risk management...

... at business schools, and in our management jobs, is that we must spread the risks by having a balanced development portfolio. If some projects should fail, others, with a different risk profile, might succeed. We also learned how to apply analytics in identifying the most attractive markets. And we learned how to make cost/benefit evaluations and business cases to prove effect and create support.

Whether attending business schools in the United States, Europe or Asia, the methods and knowledge acquired are very similar. It is the global lead thinking. We are taught the same best practice, and how to apply similar management tools in a similar fashion. And that makes very good sense because how else are we to create economies of scale in education, training, and management processes?

In an operationally stable environment, the future is a continuation, or an optimization, of the past. Competitive strategies imply executing the ”industry agreed” best practice a little bit better than everybody else. But when operating in dynamic environments, or when innovating, a different approach is needed. Companies need a very strong belief because they are mostly doing things that have not been done before. They need to make more experiments, take more chances, and they need to make more mistakes.

Seen from a traditional point of view, that will lead to an unacceptable level of danger and risk. Therefore, innovative organizations must have a different way of managing risks and mistakes.

Good developers are fueled by dreams of making great things, not by figures in a spreadsheet

If we do enough things, some of them will be successful

A manufacturer of widgets – company A – launches 37 new product models one year. Launching all these successfully requires a very thorough understanding of user needs. They acquire external research from companies that have a good track record (of doing the same thing for their competitors). They make detailed segmentation. And microsegmented analysis appears to be needed.

In our very individualistic society, consumers crave unique products and experiences. The virtues of customer focus are mass customization and needsbased segmentation. However, the effort of launching 37 widgets within a year requires an extensive coordination of technology, initiatives, project staffing, materials, supplies, logistics, sales material, and a lot of other things. It shifts focus from developing great widget user experiences towards more generalist management, coordination, and administration.

Henrik Sonnenberg
Henrik Sonnenberg
+45 2338 0031

But not only that, it also dilutes that burning vision and motivation that is needed for developers to create truly great products. There is a danger that it leads to less value creation and more bureaucracy.

Another widget manufacturer – company B – develops only four new widgets a year, all of them quite expensive. The management team consists of curious practitioners and dreamers. They play with widgets, and they have a deep interest in how people actually use widgets in their daily lives. They dream of a widget that improves life for ordinary people. That is the simple, but powerful dream they communicate internally (and externally), again and again.

They do not communicate a financial dream of improving contribution rates in five key markets by 40% in three years. The reason why they don’t do that is that good developers are fueled by dreams of making great things, not by figures in a spreadsheet or quarterly bonus payments.

Company B develops only four widgets, and all the resources they save due to minimized coordination are channeled into optimization of customer experience and product quality. Of course, that is not easy, but when successful, it starts disrupting the way we usually think about segments and price points. People in the so-called low-cost segment,unaware of their own segment label, suddenly start buying expensive widgets, although they are not really supposed to.

Company B looks for similarities in needs, and not for differences. They believe that many human beings have very similar basic needs, such as ”ease of use”, ”be in charge”, ”avoid wasting time”, and ”receive recognition”. By putting all their energy into a few product experiences (dreams), they achieve something quite unusual, and make consumers seek the product, so the product does not have to seek consumers via traditional persuasive advertisingand communication.

The above story lacks a lot of details, and the companies A and B are not real companies. But if they were, where would you rather work – A or B? Many people would prefer to work in company B. But let us assume you were offered a job in company A with the task of making it more like B. What would you do?

Many people would prefer to work in company B. But let us assume you were offered a job in company A with the task of making it more like B. What would you do?

If your job was to help, what would you do?

We hope you take the challenge, and while you think about it, we would like to propose some areas to reflect upon. We list four key points, but not as a step-by-step model because the idea of just following steps might not be useful for company A or any other company for that matter. That being said, change does need to start at the top. If a company has a complex innovation portfolio sprawling with hundreds of projects, a good question would be: ”What is it, in the strategy we created and in the way we lead our organization, that makes this happen?”. 

1. Desire to change the world

Without that desire, we can forget about the rest. And many developers are even in a position where they have to make others desire to change the world. In fact, you might argue that all knowledge workers, at some point or another, have to sell their ideas to others.

A certain degree of ”geek factor” is not a bad thing to possess.

A deep desire to change the world means that we are beyond money and position power as prime motivators. It means that we are closer to having a true vision. With a true vision, we are less anxious about looking good in front of others because we do not have to defend the position of our ego. We work for a cause larger than that. That sounds almost spiritual and a little bit silly, some would argue. Yes, working to achieve a big vision is spiritual somehow, and that is not only okay, it is necessary if we want to make a difference. Is it then okay to be ”silly”?

Throughout history, people who embarked on new explorations have always been called ”silly” and far worse things because they did things outside the norms. But creating great new things demands that we go beyond current things. How do we, and our good colleagues, get a true vision? Well, hundreds of books have been written about that. So, it is obviously impossible to make the ”plug & play answer”. But some of the elements at play are: having diverse interests and colleagues, real curiosity, lateral thinking, and the ability to ”connect the dots” across different areas. In our experience, the love for ”the thing” – the product and the user – has to be larger than the love for the administrative management game. A certain degree of ”geek factor” is not a bad thing to possess.

The above text is an extract – go to the top of this page to download the entire article.