Innovating in the face of the unexpected can stretch the most decisive innovation leader. COVID taught us that flexibility and adaptability is the name of the game. This is especially true within an organization’s innovation efforts. A new capability is needed to respond to these disruptive shock situations effectively. I call this capability “elastic innovation,” or the ability to innovate in the short-term while still managing innovation efforts in the long term.

Is Elastic Innovation Needed?

During these unexpected times, it is often necessary to innovate within a 0-48 hour timeframe. I became aware of this concept in 2015 when I read the Elastic Innovation Index. This index looked at the financial tech world and focused on how quickly companies could adapt to sudden changes. Recently, John Bremen wrote an article called Elastic Innovation related specifically to COVID. Today, I will be combining thoughts from these two articles with my own. 

Impacts of Elastic Innovation

Elastic innovation impacts different practices companies use. Firstly, it impacts an idea pipeline. Most companies have some form of Idea Management System (IMS). Forced to take an idea from your pipeline, you skip standard processes and immediately implement it. Elastic innovation may also impact your people.

To succeed with elastic innovation, you need to have a culture that allows for a high decentralization of decision-making and resources. The best ideas usually don’t come from senior executives. When in an elastic innovation situation, you need to empower your team to move quickly and create a diverse approval process. Approve it, fund it, and get moving.

Thirdly, elastic innovation impacts your operating pace. Typically your process and pace are set based on approval processes. Significantly accelerated, this is the pace in the case of an elastic innovation. Things are tested and launched to respond to disruptive shocks adequately.

Lastly, elastic innovation impacts the framework a company is following. It would be best if you were willing to drop some elements of your framework. Keep in mind; you should maintain your quality and safety standards and protect your brand.

Examples from COVID

During COVID, perfume manufacturers transformed their manufacturing systems to make hand sanitizer. They leveraged their capabilities in a short-term effort to create an entirely new product. Restaurants shifted to using mobile ordering and curbside pickup to get people their meals safely. The gig economy saw a rise in its grocery delivery services. Musicians adapted and started doing virtual concerts for their fans. 

If you keep an elastic innovation approach, you will deal with complexities and balance response tradeoffs. Most importantly, you will react quickly and decisively, which will lead to your organization’s success.

In past episodes, I’ve discussed science fiction stories as tools to predict the future. H.G Wells wrote about atomic bombs and the fallout - thirty years before Nagasaki and Hiroshima. In 1968, John Brunner predicted the European Union, China’s rise to power, and Detroit’s economic downfall.   You can probably take any existing technology and find a book or article that predicted something like it in the past. If you want to spark an idea, the most crucial part is understanding the timing.

An Unexpected Way to Predict the Future

Writers of fiction bring something to those whose jobs it is to predict the future. Writers bring the sensory talent. To be a great writer, you need to be aware of things others don’t see and pick up on different trends and moods. The ability for a writer to convey a picture of what could be generates that “what if” spark. Writers can create and invent emotions, worlds, structures, political parties, and., eliciting a response from the reader. It’s all about imagining what it will take to get from point A to point B.

This episode was inspired by an article written by Philip Oltermann discussing novels to predict crises such as genocides or civil wars. The project, called “Project Cassandra,” was run by Jurgen Wertheimer, a professor of comparative literature in Germany.

The overall goal was to figure out if you could predict the unpredictable. They discovered that authors in a given country were writing fiction tied to their country’s circumstances and forecasting what they believed would happen based on the patterns they saw. Some people refer to a crisis as a black swan, which is an event you can’t predict. On the contrary, the project showed that a few years before a crisis, local authors offered a sense of what was coming. These predictions weren’t based on extensive data collection but more focused on people’s feelings. Those running the project focused on the literary infrastructure, asking whether the -  was the book was being censored or if it did elicit extraordinary reactions.

Predicting as an Innovator

I tend to use a similar process when it comes to predicting the future. On top of looking at reactions, I take interesting writings and search out the people involved in them. Firstly, I ask the writers what barriers are keeping their predictions from happening. I also check what the dependencies are, and most importantly, I ask what the intended and unintended consequences are. No matter what you are doing, it is vital to ponder these things.

The Cassandra Project was looking to predict crises five to seven years out. The early stages of this project were successful in predicting things one year out. The next stage was five to seven years out. The early successes came from giving off strong hints, but this is hard to make actionable. In the case of innovators, hints are interesting, but they have to be translated. This is a challenge for any innovation. Ultimately, Project Cassandra was killed in 2020 by the German government.

Do you think reading the writings of authors can be possible sources of predicting the future? Prediction is challenging and often viewed as the d is the holy grail for innovators. The one guarantee is that you will never be 100% right. This shouldn’t cause you to make us give up, as a prediction can create that little spark that will lead you to the next big thing.

To me, pivoting is making a significant change in direction. Many people are not aware that some of the products they use today are the result of a pivot. Today we’ll look at seven companies that made meaningful significant changes resulting in ultimate success. 

Achieving Success by Pivoting Your Innovation

PayPal started as a digital “I owe you” platform. Today, it is a major payment transaction platform that gave birth to the “PayPal mafia”, which included people such as Elon Musk. The successful pivot was Airbnb, which originally offered housing for conferences and air mattresses. The third company is Twitter, which started as a podcast platform called Odeo. I was on show five or six in the early days of the platform. When iTunes came out with their podcast app, they put similar platforms such as Odeo out of business. As a result, Jack Dorsey and his team brainstormed, found inspiration, and pivoted, coming up with Twitter. Next up is Western Union, which was a telegram company founded in the 1800s. In recent years, the company pivoted and became a money transfer company. Today, the company handles just shy of $9 billion a year. I use Western Union for non-profit and for-profit work in Rwanda. The next company that has done major pivots is Slack, which I am an avid user of. Slack started as a video game venture called Glitch. When they couldn’t get any interest in their idea, they switched to a messaging platform and found success. 

Nintendo and Pivoting

The next company is Nintendo, which has been around since the 1880s and has been in many different businesses. They started off making playing cards, and then pivoted to taxi services. Next, Nintendo made instant rice cookers and then pivoted to hourly hotel rooms. Eventually, they pivoted into the early video game space and became the company we know today. The last company is Playdoh, which I grew up using as a kid. Playdoh was originally developed to clean up coal dust off walls. When heat sources were switched from coal to oil, gas, then natural heat, the market for Playdoh dried up. The company realized teachers were getting creative with Playdoh in the classroom and pivoted their business to a different target market. 

Important Steps

To pivot successfully, you should treat it like any other area of innovation. First, find your area of focus and ideate. Next, rank your ideas and execute them. At the end of the day, pivoting is better than going bankrupt. I did thirteen startups before my first IPO at Telligent. Pivoting is a skill that innovators need to have and an action they need to be willing to take. Additionally, you need to be dedicated and on the same page as your team to pivot successfully. Next, you need to be willing to change. Don’t fall in love with your innovation and refuse to let go. Thirdly, you have to move very quickly to pivot successfully. Lastly, choose what you will be doing and commit to it. 

Let's talk about some non-obvious sources of my innovation inspiration. Recently, we spoke about seeing with fresh eyes and how important that practice is. Fresh eyes need innovation inspiration to guide them towards that next game-changing innovation.

The Power of Unexpected Conversations

The first source of my innovation inspiration is unexpected conversations. I like to talk with interesting people who have different backgrounds than I do. I often do this on airplanes or at rest stops, as well as at large events like TED. My goal of these conversations is to walk away with at least one exceptional idea. I have a set of questions that I ask people in unexpected discussions, such as, "What are you curious about?" or "What innovation do you want to see come to fruition during your lifetime"?

In the 90s, my uncle owned Macarthur Fish and Poultry in the heart of Oakland. One thing that frustrated him was missed phone calls that often led to missed opportunities. During the holiday seasons, it was hard to keep up with numerous calls.

At the time, I was in the telecoms business, and I figured out that it was recorded every time a phone number was called. We decided to look up the callers' information from these missed calls and put it into emails. We would then send it to the store owner to call back, which led to more business. The product was called Imagine and went on to amass a ton of success after its launch in 1998. The success of Imagine eventually became the cornerstone of Telligent, which then grew to be a $3.1 billion business.

All of this resulted from a few unexpected conversations with my uncle and fellow shop owners on Macarthur Boulevard in Oakland, California. Never underestimate the power of an unexpected conversation.

Observe and Erase Annoyances

The second source of my innovation inspiration is being observant of what annoys me. We all have things that bother us. It is essential to ask what is causing these annoyances and how they're erased. I've been in the mobile phone industry since the late 80s, so I have many experiences with smartphones. In the early days, smartphones could only run single apps at a time.

A group called Palm had developed a new system called webOS which could run multiple applications simultaneously. I loved webOS so much that I convinced HP to buy it for $3.5 billion. They created what I would call the best smartphone approach out there, which was way ahead of Apple at the time. Now, all smartphones have the system that webOS developed. All of this was a result of an annoyance that a team decided to erase.

Asking Deep Questions

The third source is asking the "who, what, when, where, why" questions and applying them to your area of focus. For instance, I am currently reading "This Is How They Tell Me the World Ends" by Nicole Perlroth. Through reading this book and others, I've come up with a way to generate ideas by asking these questions.

Ask yourself what the more profound thing is that will allow you to dig deeper. I have come up with tons of ideas based on what Perlroth shares in the book. My objective is to come up with at least one interesting idea from every chapter. Ultimately, it is essential to remember that inspiration is everywhere, no matter where you are or what situation you find yourself in.