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Killer Innovations Podcast by Phil McKinney

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Podcast: Interview with David Cochran on the how of creating the first scientific calculator


Sat, Jun 20, 2009

This is the 1st in a series of interviews of individuals and teams who have created what I would consider killer innovations.  In this episode, I recorded an interview with David Cochran, the original Product Manager of the HP35 calculator.  Per the entry in Wikipedia:

The HP-35 was Hewlett-Packard's first pocket calculator and the world's first scientific pocket calculator (a calculator with trigonometric and exponential functions). Like some of HP's desktop calculators it used reverse Polish notation. Introduced at US$395^[1], the HP-35 was available from 1972 to 1975.

Market studies at the time had shown no market for pocket sized calculators. In about 1970, HP co-founder Bill Hewlett challenged his co-workers to create a "shirt-pocket sized HP-9100". Thus, the first ~12 HP-35 portable calculators were made as a "hack" by and for other engineers at HP. It is rumored that the development engineer got carried away and implemented a full suite of scientific functions to satisfy requests from his co-workers. When these prototypes proved popular, HP decided to turn the HP-35 into a commercial product. The HP-35 was the first calculator with a full suite of trigonometric and transcendental functions.

In the first months, orders were exceeding HP's expectations as to the entire market size, which was 10,000 units per year. Before the HP-35, the only practical portable devices for performing trigonometric and exponential functions were slide rules. Existing pocket calculators at the time were only four-function, i.e., they could only do addition, subtraction, multiplication, and division.

In this interview, David not only shares the history and how of creating the HP35, but also shares stories about Bill Hewlett, David Packard and others including Steve Wozniak.

Link to the MP3 of the June 20th podcast

So ... you've come up with that killer idea.  To move it forward, you need to take some risk.  Risk that could include: investing your retirement fund, quitting your job and possibly including convincing others to invest their retirement fund and quitting their job to join you.  Suddenly you hesitate ... the risk seems enormous and you start to second guess the original idea.  Is the potential reward worth the risk?  The natural reaction when fear takes over is to retreat back to the comfort of the "safe" option.

Each individual has their own risk profile (comfort level with taking risk).  A german researcher interviewed 20,000 people about their willingness to take risks.  The researcher found:

• Tall people are more prepared than short people to take risk (not sure I understand why)
• Woman take fewer risks than men
• Willingness to take risk decreased dramatically with age

The key influencers for risk across the survey were: age, genders, height and parental education.  The research also found that people who are most content with their lives (relationships, job, etc) were willing to take more risks.

Does this mean you are doomed to never execute your killer idea if you are in one of the "unwillingness to take risk" groups (e.g. older woman)?  No!!

Recognizing that you have that tendency to shy away from risk is your first step to changing your risk profile. 

To overcome your fear of risk, you need to understand what is driving your fear and then brainstorm ways to neutralize them.

To learn more .. listen to this weeks podcast.

What are the fears that you need to overcome?

(audio)

During a recent press interview, I was asked by a reporter for my view on what the next "hot" thing will be.  A question that is becoming more common with each press interview given the current market conditions.  I shared a few trends of personal interest that I've been tracking.

So, what is the process I use to uncover emerging trends and weak signals?

First, what is a trend?

A trend is a change that will eventually have a significant macro impact on society and business while a fad is a change that will be a fleeting (brief) impact on society and business.

Uncovering trends is about observation ... watching, reading, listening, scanning a wide range of sources.  For me, one key source are a set of observers from all over the world.  They feed me their observations, thoughts, insights which I then synthesize into a long list of trends.  I focus on uncovering the non-obvious.  If its in the press, in an analyst report or on TV, I'm too late.

The process I got through is:

1. Brainstorm a list of trends/changes.  These could include: GDP change and the impact on the economy, aging of the population, shifts in technology, society view on education, government regulation, etc.
2. Take each trend and compare it to every other trend.  For example:  aging of the population and shift in technology.  Identify possible future trends at this intersection.  In the example of aging of the population and shift in technology you could see:  Growth in medical devices such as diabetic meters that will send data to the doctor or the ability to do kidney dialysis from home rather then having the patient go to the hospital.
3. Search for trends at each intersection of trends from your original list.
4. For each emerging trend you've uncovered at the intersections of mega trends from your original list, list the drivers (actions that support the trend and can help it expand) and barriers (roadblocks that will prevent the trend from coming to reality).  For example:
• Driver: escalating cost of healthcare and desire of the population to live at home rather than a hospital or nursing home
• Barriers: Government regulation on launching of new technologies in the healthcare field
5. Be exhaustive
6. Create a grid to identify the ones to focus on. 
• The horizontal axis is barriers (going from "really tough barriers" on the left to "no problem" on the right) while the vertical axis is drivers (going from "no drivers" at the bottom and "major drivers" at the top).
• Size each trend based on impact (size of market, revenue, margin, growth rate, etc)
• Color each trend based on when the trend will go mainstream
7. Focus on the items in the upper portion of the quadrant with particular interest on the ones in the upper right.

Maintain the grid ... Update and add to the grid on a regular basis.

For the rest of the process and in particular, how to stay fresh and hot to uncver weak signals, download the podcast ..

(audio)

I’m amazed at the breadth of human ingenuity to solve social, economic, political and even technical challenges.  The one area where I don’t see ingenuity applied nearly as much is when it comes to planning our careers and preparing future job prospects.

Can you apply the same killer question approach to planning your career?  YES!

By asking better questions, you can greatly improve the quality of the ideas generated which in turn create higher quality innovations.  How?  My adapting the killer questions to your specific needs.  For example, a common killer question used is:

What do people not like about the process of purchasing my product?

You can adapt this question by exchanging key words.  Take the original question and then replace people, purchasing and product for words that better fit your specific needs.  For example:

What do people not like about the process of purchasing my product?

• people = customers, managers, 18-25 years old
• purchasing = ordering, specifying, finding information about
• product = service, solutions, content

So, how would you adjust the killer questions to help you think differently about your career?

1. What assumptions am I making about my managers understanding of my skill and abilities?  What if the opposite where true?  How could you correct/reverse this understanding to your favor?
2. Why don’t companies look for/hire people with my skills set?  How would you change this barrier?
3. What value could I deliver of I had expertise across the entire value chain?  What is the entire value chain?  What are your gaps in expertise? How do you fill the gaps in your expertise?
4. What external jolts have the potential to significantly impact my career?  Create most likely, pessimistic and optimistic scenarios of where your industry/career are going.  What decision would you make today/tomorrow/next month/next year if you know a given scenarios would happen?  Develop career strategies that are robust to withstand most if not all of scenarios.

What killer questions would your create to help think differently about your career?

To learn more, listen to March 1st podcast ….

To receive the weekly twit of killer questions, then follow on twitter....

(audio)

How do you create a convincing message so that others will sacrifice to make your idea successful?  Its all about storytelling.  If you follow the same structure used by movie industry and by book authors, you can create a story that will attract others to your killer idea.  What is that structure?

1. Stimulate their emotion
• Change the mood.  Create an environment for the storytelling (why are movies better in theaters?)
• Establish fear/concern.  Need to create tension so there is something to be solved/fixed.
• Put the listener into the story.  Weave the story so they see the challenges from their perspective.
2. Change their opinion
• Change their mind.  Listeners will immediately try to solve the problem and most likely their solution will not be aligned with your idea.
• Show them a way out.  Just like in the movie, you need to have a way to relieve the fear/concern/tension created.
3. Get them to act
• Create a desire to act.  Establish a sense of urgency.
• Show how easy the idea is to make real.  Focus on simplifying the idea so that listeners don't get distracted.
• Show them what the future will be like.  Establish hope.

This alone will not be enough to ensure you have the right story.  You will need to:

1. Don't wing it.
• Write it out
• Get comfortable with your story so that you can present it without notes/slides
• Be able to adjust the story based on the audience
• Remember - its a discussions not a speech
2. Always end early
• Time is the most precious resource someone can give you
• Show respect for the time and end early.  It will leave a positive impression on your idea.
3. Ask for feedback
• What do you think of the idea?
• How would you suggest I improve the idea/story?
• Who else would you recommend I talk with about the idea?
4. DON'T GIVE UP!!!
• Get out there a tell your story
• Don't listen to the negative voices (inside yourself or from others)

The difference between winners and losers is that winners keep getting up everyday and try.  Losers just give up.

To learn the rest, list to the Feb 8th podcast

After much much procrastination, we finally got around to getting a new logo developed (logoworks.com) .  We focused on keeping it simple and clean while also conveying what the podcast and site are all about.

Inspiring the readers and listeners to use their inherent ability to create breakthrough/killer innovations.

So .. what do you think?

(audio)

So you have a great idea.  How big is it?  What is the value of the idea to the organization?  Most people get hung up trying to come up with the exact answer.  In most cases, you won't find the perfect answer.  Especially if you are breaking new ground.  What I find lacking is the basic skill of "estimation".  Estimating is nothing more than using the information you know to create a "good enough" approximation of the market opportunity for an idea.

The objective is not the find the answer but to find out what makes up the answer.  So what are the steps?

1. Take the question (how big is the total number of customers for my idea?)
2. Break down the drivers that allow you to estimate the answer to the question.
3. For each driver create an educated estimate of its value
4. Create the estimated answer to the question

You're not done yet ... You need to estimate when the value will be realized.

1. Determine the total life cycle of your idea (2 years, 5 years, 10 years, etc)
2. Spread that time line evenly over the five phases of "innovation adoption"
3. Apply the adoption rate for each phase based on Rogers rules ..
• 2.5% for Innovators
• 13.5% for Early Adaptors
• 34% for Early Majority
• 34% for Late Majority
• 16% for Laggards

You're not done yet ... Now you have the total value.  You need to determine the value to you and your organization.

1. For each phase, apply your estimated market share.  Be realistic ...
2. Apply some estimated revenue per unit/customer.

Now you have the estimated value of an idea.

To learn the rest, listen to the podcast ...

(audio)

Why are some innovations more successful than others?  Innovation success is never just about what is possible.  It's always about the choices customers and markets make from among what we can do.  A key consideration when making the choices on which innovations to us is the "total utility" -- which is defined as:

The sum of all benefits a customer gains from consuming particular goods or services minus the cost involved.

The innovation that offer more utility value will win, assuming you can communicate the value in terms that customer understands and agrees with.  One approach that I've found useful in communicating the value of an innovation is based on Everett Rogers Diffusion of Innovations.

• Relative Advantage -- How is the innovation better than what is being used today?
• Compatibility -- Does the innovation leverage existing infrastructure and/or ecosystem?
• Complexity -- Is the innovation easy for a customer to understand?
• Trialability -- Can the customer try/test the innovation before committing?
• Observability -- Will the customer be able to see/measure the benefit?

To learn more, listen to the January 4th podcast

Just prior to heading out on holiday last week, I was asked to do a video interview with Forbes.com about my view (predictions) for 2009 around technology and innovation.  These interviews will be stretched out over a number of segments.  The first was posted this morning in the "tech" section under the title of "Technology Outlook 2009".  Enjoy .....

Forbes.com interview

During the downtime of the holidays, I've been working on cleaning up the website, updating the archive, etc.  In the craziness of the last few months, I didn't notice that the podcast has been included in the innovation section of alltop.com.  If you are not familer with alltop, it took its inspiration from popurls.  As they describe it, the site is an "online magazine rack" of popular topics from the leading content providers.

I appreciate the recognition ....Thanks!

If you are interested in following some of the other great sites around innovation, then bookmark innovation.alltop.com

(audio X)

Finding that dream job in the innovation/creativity economy seems out of reach to many.  It's not.  With the right level of commitment, energy and passion, you can land that job.  What is your dream innovation job?  Some may say that I have the dream job and I would have to agree.  Now that doesn't mean  its perfect each and every day.  The most common question I get is "how do you I get your job?" ... more accurately the question being asked is "how do I get a job like yours?".

To learn how to find that dream innovation job, listen to the podcast X (24:30 mp3)

For the entire back catalog of shows (+60 hours of content from +100 episodes), subscribe to the podcast RSS feed.

audio

Innovation is one of the key catalysts from the economic recovery - but only if senior management protects and support it, rather than cut it or even eliminate it.  The reason senior managers consider cutting innovation programs is because of the impression that it delivers little to no impact.

So, how do ensure senior management sees and appreciates the value from innovation?

One method to prove is value is through metrics

• What is the process to build up the proof>?
• Benchmark yourself
• Benchmark your industry/competitors
• Define the gaps shown by the benchmark
• Develop steps (in priority order) to eliminate the gaps
• What are the right set of metrics?
• Standard financial metrics (revenue, gross margin, operating profit and R&D spend and then drill down and capture these numbers at the product line level.  At the product line level, also capture the CAGR (compounded annual growth rate)
• R&D labor costs
• IP creation (not for every industry)
• Idea funnel (new ideas, ideas killed, ideas resulting in products)
• What are the right ratio's to use to understand effectiveness?
• GM/R&D (covered in more detail on a post on the blog) - The theory being that if you build a better mouse trap, the customer will reward you with a margin premium.
• R&D per R&D person
• Patents per employee (not my favorite but some find it useful)
• Revenue and gross margin impact based on age of introduction (products introduced < 1 year ago, < 2 years ago, etc)
• Now what? ... Go back 3 years and ask ..
• Are these the right metrics?  If so ...
• Have they improved?
• What plans are in place to improve them going forward?

The point is:

• Innovations can be measured
• Therefore management can "see" the impact
• If the impact is consistent, then your innovation efforts will be resilient during the touch economic times

What if you're trying to launch a new innovation team?

• Do it .. don't let the current economic turmoil scare you off
• Use the competitive benchmark to show what others are doing
• Show the impact if your organization were "best in class" compared to your competitors
• Show a well thought out plan to move the organization towards that target

What if you are an individual looking to secure your job during these tough economic times?

• Show your creative/innovation skill by applying them to a really tough problem facing the organization (e.g. increasing revenue, reducing costs)
• Show where previous ideas had impact
• Run a training class and show others how to use creativity and innovation in their roles ... become an innovation mentor/evangelist
• Create a proposal to management showing how innovation could have impact to the organization

Click to listen to: Proving the value of innovation (mp3)

When is the best time to innovate?

• Innovation is 24x7 .. not something that you wait "until your in the mood"
• Some of the drivers that cause people/organizations to all of sudden change their view of innovation
• Competitors ... they are constantly beating you to market
• Economic Trends ... our old products aren't selling - hurry up and come up with something new
• Quarterly Results ... we are having a tough quarter so lets pause on any new ideas/innovations
• Just as great writers set down and crank a defined number of pages per day, the great innovators define a daily idea quota
• 2 to 5 ideas per day
• Set aside a time of day (for me, its morning)
• Don't filer when you are capturing ideas
• Combine new ideas with ones already in your idea notebook
• If you are having struggles to come up with your daily quota, use the killer questions from previous podcasts
• Try to capture the inspiration for each idea (great use of photo's)
• Every week or two, prioritize the ideas in your notebook using the 5 key questions
• If you do this EVERY day ... you will ...
• Improve your own creativity (exercise that creativity muscle)
• Build confidence that you can create great ideas
• Get viewed by others as having and endless supply of great ideas
• Become a key individual to your organization (key in these chaotic times)
• If, as an organization, make innovation a 24x7 priority ...
• Your competitors are most likely NOT doing it
• So .. you WIN if you do it right

Listener Question:  Do you have a process to create ideas every day?  If so, why not share your thoughts on the how and benefits you've seen.

With the encouragement of the listeners of the podcast, I've been working on creating a CD that you can share with your friends, managers, team members, etc.  The objective is to create something that introduces the "what" and the "how" of innovation without listening to the +100 hours of audio that now makes-up the podcast catalog.

For those of you who have been waiting, the CD is close to being done.  The audio is 99% complete and now I'm setting up duplication so that its easy for you to order.

I tried to fit the audio on to a single CD .... it didn't fit.  So it will be a 2 CD set with about 2 hours of audio content.  The tracks are:

Disk 1

1. Why innovation?
2. A better way to innovate
3. Focus your innovation search
4. Ideation -- Creating better ideas by asking better questions

Disk 2

1. Ranking ideas
2. Execution - Translating ideas into innovations
3. Epilog: The skill of observation
4. Epilog: Changing your perspective

Stay tuned ... we are close to having it together.  Thanks for the patience ....

This Author: Phil McKinney

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