Notes
[00:01:23]
Changing Our Destiny
[00:02:03]
Measure the People for Insight into Culture
[00:04:24]
Jump Start Your Business Brain – Book
[00:06:30]
Changing a Culture – Real Customer Story
[00:08:45]
Culture Survey
[00:12:13]
3 Things that Changed the Destiny of the Group
[00:12:47]
#1
[00:13:22]
#2
[00:14:11]
#3
[00:16:08]
The Problem with Fear
[00:17:22]
Formula for Big Ideas
[00:19:52]
Dan O’ Day Interview
[00:21:52]
Five False Cures of Innovation
[00:22:57]
#1 False Cure – More Inspection, Metrics and Bigger Rewards
[00:27:55]
#2 False Innovation Cure
[00:32:23]
#3 False Cure for Innovation
[00:34:24]
#4 False Innovation Cure
[00:37:51]
#5 False Innovation Cure
[00:40:47]
Brain Brew Whiskey Academy
[00:41:01]
Step by Step to Meaningful Uniqueness
[00:44:02]
The Two Questions to Achieve Meaningful Uniqueness
[00:44:09]
#1 – How Likely are You to Buy?
[00:44:47]
#2 – How New and Different?
[00:45:21]
Using the Two Questions to Measure Meaningful Uniqueness
[00:46:54]
Looking for a “7” on the Meaningful Uniqueness Scale
[00:48:21]
Who to Survey for Meaningful Uniqueness
[00:52:56]
Craft Cocktail Recipe – Jalapeno Julep Cocktail
[00:54:53]
Relativity
[00:56:29]
Step 1 – Make the Jalapeño syrup
[00:57:06]
Step 2 – Muddle some Mint Leaves
[00:57:26]
Step 3 – Muddle together the Mint Leaves and Jalapeño syrup
[00:57:50]
Step 4 – Add 2oz of Whiskey – Preferably Relativity
[00:57:59]
Step 5 – Add Crushed Ice
[00:58:02]
Step 5 – Stir 13 Times
[01:02:14]
Listener Offer
Transcript
Tripp: [00:00:01] Welcome to the Driving Eureka! podcasts where we share ideas and advice for helping you find filter and fast track big ideas.
Tripp: [00:00:14] Hi I’m Tripp Babbitt advisor to global organizations on the Deming philosophy and host of the Deming Institute podcast.
Doug: [00:00:23] And I’m Doug Hall inventor speaker teacher and whiskey maker. I’m also the founder of the Eureka ranch and author of the driving Eureka book.
Tripp: [00:00:34] This is the Driving Eureka! podcast episode for this week in Segment 1 our feature story is how to change your destiny In segment two. The driving Eureka book excerpt is about Doug’s interview with Dan O’Day about the five false innovation cures and finally the brain brew whiskey Academy segment. Is Doug’s promise to take us through the step by step process to achieving meaningful uniqueness and also in that segment. We’ll talk about the craft cocktail recipe and this week’s recipe is the Jalapeño Julep cocktail.
Tripp: [00:01:23] Doug let’s start with how do we change our destiny.
Doug: [00:01:28] Well so this happen. This is real world stuff that happened and sometimes just the stimulus of these things they get into my head and I can’t stop and let me just set the scene. The scene was what’s called a Eureka! Accelerator and this is a format that we’ve grown to over nearly 40 years here where you spend a day inventing and then three days doing very rapid cycles of development. So to resolve a lot of the early death threats and so it’s a very very intense it compresses nine months into four days. So it’s very very intense.
Doug: [00:02:03] And before we begin these sessions we measure the raw material the people that we’re working with and of course we’re not measuring how strong they are or how healthy they are. We’re measuring their mindset you know how urgent do they see it to do innovation how much courage to take action do they have and and and what is their How much do they collaborate. Quality of work.
Doug: [00:02:31] I mean some pretty straightforward questions but pretty direct questions and we don’t do this to be mean and we don’t do this to beat people up and we tell people it’s not a measure of these people it’s a measure of the culture they’re within this is how they’re feeling because what we have found over 40 years is that the mindset of the people coming into the effort to innovate is one of the biggest determinants of what happens now.
Doug: [00:02:57] For a long time our rule was if your culture was not right we wouldn’t work with you. Basically I’m gonna sorry I’m going to reject this raw material. I can’t help you.
Tripp: [00:03:07] That’s a lot of rejection.
Doug: [00:03:09] pWell it wasn’t really OK. In 1993 I wasn’t bad. Ninety five it wasn’t bad.
Doug: [00:03:16] Oh but it’s gotten worse and worse and with each drop of the stock market it takes another leap downward basically. And so two thousand drop 2008 dropped and it’s gotten pretty ugly. And so we got in after two thousand in there. I look at it I said whoa wait a minute. Everybody left work with. And besides you know what kind of doc what kind of emergency room only deals with healthy people.
Doug: [00:03:50] I mean for crying out loud I to see him because they’ve got a problem.
Tripp: [00:03:54] And the pipelines’ drying up.
Doug: [00:03:58] It’s your job dammit. You know don’t complain. You’re supposed to be a damn expert at this stuff. No Whinning. That’s right. Absolutely no way. I’ve got a problem I can’t innovate and you’re telling me new unit good enough for me to work with you. We do a whole like stupid. So that’s what really set off a lot of the quantitative research that that ended up in.
Doug: [00:04:24] And in particular it was Jump Start Your Business Brain that really did a surge of data surge of data measurement because we had to reinvent ourselves quickly so that we could work with whatever organization was coming in. Whatever organization and whatever the state of mind we had to make our system robust enough to handle variances in raw material. That’s that’s the job that’s the past. Get over it. You know when do that retire. And so we did. And the key metric for this.
Doug: [00:04:59] Dr. Chris Stormann And I did the fundamental research on this is we took 6000 teams and measured them in the act of creating and we looked at it against the pre data and post data and built up a lot of the stuff that is in now driving Eureka in the book about. And so but one of the things that we learned was when you measure their results you have to benchmark and you make it very simple because you know it’s not math. A lot of people aren’t math people so you make it red yellow green everybody gets red yellow green and and the results have gotten worse and worse. Now somebody said Well Doug just wreak calibrate for today’s people you know which will then make some of the good advice. But they’re all horrible. I think you’re just being severe. I said. But we’ve got to get back to this world exists. And with small companies I still see that world. So it’s not like it’s an impossible world. It’s just how far down things are.
Doug: [00:05:56] I mean people your old guys are worse now. I got data I got data that shows I’ve got the same big Fortune 50 companies 15 years ago and today totally different companies totally different companies so it is different. Factually that’s the data so what we do is we share this data with the leadership first and talk them through and in years years since the early 90s of doing this. No leader ever says Oh I’m. That’s not my team. You’re wrong. They always say. You’re right you’re right. That’s why we’re here. Pretty much the very positive about it.
Doug: [00:06:30] And so we were in Asia. And Maggie Nichols is running the session I was just I was chief inventor. My job was just to think and do ideas I’ve talked wicked cool job. By the way greatest job in the world as far as I’m concerned and the state of mind it showed it was really bad. I mean the courage to take action a state of mind. It was really really really horrible. And then Maggie Nichols laid out the data and she said. Then she started a very constructive conversation to get people to express their frustrations and challenge and she wasn’t gonna let it get into a pity party. Okay. And then she accelerated the session and got them going and generated a momentum that before they knew what they were rocking and the result was they engaged and the people went big and bold they really went big and bold it was amazing it was amazing the transformation.
Doug: [00:07:31] And usually you don’t see it. And one of our measures of doing it is at the end of the first day they have to pick some ideas to send out for testing. And usually the team talks big ideas but at the end of the day they all become conservative and boring. And the first night usually the ideas fail and then they’re a little bit but the next day and next day. they really really pushed it.
Doug: [00:07:52] And so you know needless to say at the end of this you know they come out of the end really embrace talking about this new culture they’re going to keep going to have to go. We’re supposed to be a week before we go back. Next thing you know literally the next morning as we’re flying back they’re sending e-mails. How can we go faster. I mean amazing truly amazing transformation and so I sat back I said What the heck happened what took a group that over many years would have been just a struggle to go do this and made this difference happen.
Tripp: [00:08:30] So Doug you talk about this the survey in there. Can you give it. Give us a little bit more detail on what the survey is and what kind of what it’s measuring. I was a little little cryptic for me to try and piece through that.
Doug: [00:08:45] We’ve got we’ve got a set of maybe I don’t know I guess it’s like 30 or 40 questions that we ask and the questions have we’ve got huge databases hundreds of thousands of respondents and so we get really good bead on it. And we spend a bunch of time in the beginning making sure the questions couldn’t be gamed. I mean we designed them so they couldn’t be gamed and some of them actually have academic basis for them psychological measures of where people are. But it sings about agreement to innovate urgency to innovate.
Doug: [00:09:20] Are they more logical left brain or more artistic right brain as a group or dual brain.
Doug: [00:09:27] It’s courage to take action sufficient resources to get the job done. Confidence in you know how much time they spend proactive versus reactive firefighting versus leading confidence in their ability to create communicate commercialize.
Doug: [00:09:45] I mean a really pretty in-depth profile and in fact if listeners want trip how about if we do this in this episode we’ll set up a special link that they can go to because we set up in our RX prescription that uses a lot of the questions uses a lot of the questions where listeners can go and answer the questions and it’s just for you it’s all confidential and you can sort of see where you stack up against hundreds of thousands of others out there and you can get to see where you are. And then it has some automated coaching that comes with it that literally gives you some advice and it’s all oriented in a positive way. There’s no beating you up on where you should focus on what you could do to really it’s basically your prescription for success how you can make that better so we’ll set up that link for people OK. So they can do that for free.
Tripp: [00:10:41] Not free website said not free.
Doug: [00:10:48] Yes we’ll be free.
Tripp: [00:10:50] OK. All right.
Tripp: [00:10:54] And then so they’re going to be compared against a bunch of other companies. Are there other there. Is there anything you’re real about other companies that have taken this test or have taken this in the past and how they compared and it kind of was a pre-empt or to their future success or failure.
Doug: [00:11:15] Well today almost everybody unless you’re a small business it’s owned by the founder it’s almost guaranteed it’s not good. But you already know that. I mean have read a survey to tell you that you know the frustrations but it does point you to places I can tell you that when we institute training and and we take a methodical approach of diffusion of innovation to change the culture within six months so you can see significant improvement across the board and within 18 months you can have a pretty remarkable culture that can change but you can’t change it in a day and beating people up isn’t going to do it. You’ve got to change the way people are working changed the way people collaborate etc..
Tripp: [00:11:59] Ok. And so you you go on in this particular section from Driving Eureka! about you know what changed the destiny of the group and you outlined these three areas.
Doug: [00:12:13] Yeah. So my hypothesis I can’t know for sure this was one event. So let’s just be clear about that. OK. I am no mathematician. And so you know observing something qualitative is not quantitative and I’m pretty firm on that. So qualitative gives us hypotheses that then you have to run experiments to prove and sometimes we can do it with the data because we can look in the data for it. I think three things made this transition from fear to courage and literally change the culture of these people which was truly remarkable.
Doug: [00:12:47] And the first was leadership the leader of the group was fully present. Sometimes we have leaders in the group and they spend half their time on their phone or they spend half the time texting. But this leader was right there. And when the data came out he I happened to be sitting at the table with him with small tables people working. And he didn’t dodge it. He didn’t make any excuses. He didn’t start asking questions Could it be. He just said OK it is now how can how can we work this. He just went he just went. And that set the tone.
Doug: [00:13:22] Second thing was patience Maggie Nichols who leads the Ranch did just an absolutely amazing job better than I would ever do. Managing the emotional state of the group I would normally have tried to just charge forward with energy. She let it go easy. Let people get some space and get them going. And then she came to me and she said OK now I need you to do a little rant I need you to charge them up to charge them up. And by holding on and letting the people do it I think in the past I jump in too quick because I’m like Let’s go. She let them go let them feel it let them build. And so she had some patients with it which was quite amazing.
Doug: [00:14:11] And then the third thing was there was real diversity. So this was an international project. There was no culture. No country came close to being 25 percent of the group. So it’s truly a United Nations type thing. I mean it was or a Toronto school where you want to think about it an amazing amount of different people. And so people didn’t have a sense of belonging to classically with international projects you’ll have the Europeans against North Americans against Asians or you know kind of grant me there was none of that.
Doug: [00:14:42] They were from all these different countries and so the group became a group and it became a sense of belonging that you know we can be better than this. We are better than this. And so that’s what I think I think was I think we could do some analysis to figure out we could check in particularly the diversity in the leadership the leader accepting it and saying let’s go patience by Maggie Nichols. She managed the group psychology understood it felt the pulse of it and had me push a couple of times and then as the week went on she turned me from an idea person into a teacher. And so a number of times she said I want you to teach them this. Teach them this. And so whether weather was doing the math doing research interpreting research. She had me give lectures like we give. You know I I’ve given on campus cause she says they’ve not known these ways of doing it. And so I want you to just teach don’t preach teach and and I think you know that helped. And lastly it was the diversity.
Doug: [00:15:50] It was an amazing diversity and I think you know we are equations model when we model it we say diversity is an exponential impact on the number of big ideas you create. And we had it we had it. And it showed that school.
Tripp: [00:16:08] I you know a we’re only a few episodes obviously into this podcast but there is a recurring theme that keeps coming up and I see it in your writing is you really hit this idea of fear pretty hot pretty hard. You’ve mentioned it in this this particular article. Why do you why are you gravitating two to that in your writing. Do you think.
Doug: [00:16:31] Well when we modeled so we took a set of six thousand teams that we had really good data on and we measured them every 40 minutes and asked them question was a ridiculous amount of course we talked about.
Doug: [00:16:45] They didn’t answer the questions that could screw up the project and call scared so they answered every question. The university now tells me you couldn’t ask those kinds of questions.
Doug: [00:16:56] But and so and so we asked people how much they liked. There’s a whole pile of things that we did long and the short of it what we found is the number of meaningful you need ideas that really stuck not just right at the moment but a week later etc.. Real solid things. The the equation that defined it was stimulus which was how much stimulus you had. In other words ideas are feats of association.
Doug: [00:17:22] So we bring in what’s called Spark decks and we have unrelated mining patent mining can Insight mining future mining that’s like six mines you fill your brain with that that is raised exponentially to the level of diversity is what I just mentioned. The more diverse our city the more ideas you get so that’s the numerator. That’s the top the equation. Stimulus raised exponentially the diversity however that’s the potential to the level that you and the the denominator is fear because as fear goes up the number of ideas goes down. And so when you see a team that has high fear low courage to take action then you know it’s gonna be brutal because they may come up with them. But their ability to kill it will be immense. And so fear is the constraint it is the key constraint. That’s why we do data. That’s why we do documented systems that’s why we use data driven decisions. That’s why we do the math early. All of those things you know telling people to howl at the moon and be a design creative that’s cute. But that’s not going to stick except for the few weirdos. And I’m counting myself as one of those who’s really out there on the edge. The majority of the people 85 percent left brain and we need those people. They’re critical because if you’re going to make something if you’re going to design something you’re gonna build something you’re going to need those people to stop giving him lectures do it the way they need to do it help them
Tripp: [00:19:08] Well let’s move on to segment two the excerpt from the Driving Eureka! book in a previous episode actually it was episode one we had talked about one of the five false cures.
Tripp: [00:19:27] And then later you did an interview with Dan O’Dea and once you talk a little bit about that interview and then I’ll put that recording in after you’ve talked about the Dan O’Day a little bit.
Doug: [00:19:44] Well in an earlier episode we talked about the false cures five false cures about innovation.
Doug: [00:19:52] I talked about the first one and I thought it’d be fun for people to get the whole set and and so it’s kind of a neat way of doing it. This is Guy Dano. Many years ago and he’s kind of legendary in radio business as a teacher. He’s taught when he used to be deejays before they were computerized stations. He taught many of them in particular comedy interviewing voice presence just a true expert. And and he saw read some of my early books really found them useful in particular jumps such a range of such a business brain really found them useful. And over the years we would just show up I’d be I didn’t place I’d be asked to speak and next thing you know he’d come around the corner you see I thought it’d be good for you to speak here. And he had contacted and heard that I was doing a new book. And so I’d send him one of the early galleys and he said D I’d like to do something for you. You’ve helped me a lot. I’d love to do a recording with you that you can use however you see fit. And I thought would Jesus get interviewed by him and would be pretty cool.
Doug: [00:20:59] And and it was it was really it was different. He was different than than many interviews these days because I mean here was a throwback guy.
Doug: [00:21:07] He makes it so effortless. In the recording and he’s the one that picked out from the book The Five false innovation cures. And he said this is really this is important stuff. This is really important stuff because people can always dish this and say hey I don’t really need this innovation stuff. We’re doing that. We’re doing that. And so the interviews but about an hour it’s got all he covered an amazing amount of ground. So it’s well worth listening to while you’re exercising driving or whatever. But the the false cures we thought we’d still have been here because it’s just it’s just something different. And it’s. It fulfills exactly what we’re talking about.
Tripp: [00:21:52] Well let’s listen to Dan and Doug talk about the five false cures for innovation.
Dan O’Day: [00:21:59] Let’s start with what are the five false innovation cures.
Dan O’Day: [00:22:04] Can you explain those please.
Doug: [00:22:07] Yeah. So the driving Eureka book really deals with the innovation during system and and it’s about not just the ideas but ideas and shipping going and you know against this we know that you have to innovate people agree with that.
Doug: [00:22:22] CEOs agree with it but the issue is they don’t know how. The challenge we face is oftentimes they are grabbing at straws that they think to do it.
[00:22:32] And I call them the five false innovation cures and it’s interesting that you ask about that because literally today I get three different notes from people who’ve gotten early editions of the book and they were quoting different ones of these of these are the pains that they are feeling in their organization. So so as we go through them I think people may we may hit a hot button where people go Oh my God. That’s me. That’s my problem.
Dan O’Day: [00:22:55] So the first one is.
Doug: [00:22:57] The first one is if we put in more inspection metrics and bigger rewards then all will be good. In other words if all we got to do is if we measure the outcome and we bribe people to do the job then they’ll innovate and and that’s just totally against. I mean I could stand in a court of law and extrinsic and metrics will not create enables somebody to go do great things. It has to come from within. It has to be intrinsic motivation.
Doug: [00:23:27] And the more they measure it in that way where they’re measuring the output as opposed to helping them use metrics as a means to improve the system then the more they fail.
Dan O’Day: [00:23:39] The idea of measuring outcomes is not new in terms of measuring outcomes of innovation how can a veteran manager who has a b school mindset. And I don’t mean that as an insult but a veteran manager with a b school mindset. How can that person be expected to evaluate an innovation or even to distinguish it from a new idea or proposal that is just stupid.
Doug: [00:24:09] I mean you’re catching the nuance here. The output is an innovation pipeline of a lot of ideas. But we want to use is the metrics to help people improve their method of doing it improve their ability to evaluate ideas and what we have found in tracking tens of thousands of ideas.
Doug: [00:24:27] Is that the way you evaluate the idea on how innovative it is is by measuring what we call meaningful uniqueness and specifically you show it to potential customers and you get how likely they are to buy it and how new and different they think it is and you wait them 60 40 purchase a new and different. And this metric will tell you how likely they are to try it how likely they are to repeat purchase. All things being equal the awareness that you’ll get the distribution that you’ll get and your ability to get more money for it. I mean because one of things we know is meaningful uniqueness correlates with profit margin. People want to pay extra.
Doug: [00:25:12] But if the thing does something they can’t get anywhere else they’ll pay more.
Dan O’Day: [00:25:19] And you determine that purely from self predictive behavior from asking your customer base or do you predict it by putting that product out in the market at that higher price and seeing how the market reacts.
Doug: [00:25:32] Well you have a lot of ideas and you have to filter them. So. So we have back we talk in the book about I talk in the book. I talk in the book about five different methods for measuring it from artificial intelligence systems we have which will the computer will read you write it written description and the computer reads it to the systems that you test with a panel of people inside the company of experts against standardized standards as well as consumer testing or business to business or whatever it might be testing out where you can use stuff you did with the Internet or direct intercept to do it. So that body in all of these systems it’s a quantitative measure that you get.
Doug: [00:26:14] That is an objective measure that says how meaningfully unique your idea is.
Dan O’Day: [00:26:20] Perhaps this is the contrarian nature that people accuse me of having. It leads me to wonder does most innovation come from a determined desire to innovate. Or does most of it come from an iconoclastic mindset that simply follows what seems natural. Or better versus the way things always have been I think.
Doug: [00:26:45] I think it comes from an entrenched the big ideas the people come up with big ideas it comes from within. There’s something out there that’s bugging them. There is something out there. There’s there’s a wrong that they want to write there’s a need that they have to make a difference in a category and and so that mission drives them to go beyond where most people are. Which is why one of the things that we’ve done in the new book versus some of the older books is we talk about using what we call commander’s intent which is a form the military uses for your project missions where the leader writes a narrative that’s designed to inspire people to do great things because you’ve got to get to them emotionally. They’ve got to want it. You’ve got to love it. You’ve got to love it to innovate. It’s all too hard. You get beat up along the way and if you don’t love it it’s just not going to happen. And so we try to get the leaders to write that narrative that inspires the people to do great things so the first of the five falls innovation cures.
Dan O’Day: [00:27:55] Is that more inspection and more metrics and bigger rewards will do the trick. What’s the second false innovation cure.
Doug: [00:28:05] The second one is what I call the big idea. If we just get a bigger idea all will be good. We just need a bigger idea. The problem is what we’re finding and I I followed this for some time that if we would just give you a bigger Eureka at the front than it would be good. The problem is the development system in most organizations is the killing zone two separate studies show that when idea goes into development if you do a quantitative sales forecast on what it is the objective forecast using customer data when it goes into development and when it comes out two separate studies show that on average companies lose half the value during development. I mean basically the development process is not developing it into something better. It’s like hospice it’s managing the death of ideas and so ideas are frankly and that’s tried to say it but it’s not hard to get ideas.
Doug: [00:29:05] What is hard is to take those ideas and in development actually make them better.
Doug: [00:29:10] In a case what we’re finding is is instead of a loss of 50 percent we’re getting a gain of 28 percent and make them better at the other end.
Dan O’Day: [00:29:18] So what would be the loss of that 50 percent of the value or the effectiveness of the idea.
Doug: [00:29:25] The silos.
Doug: [00:29:26] So what happens is is that the team the small team that worked on the idea of the front. They were fully engaged. Now as we move it into the silos in our organization all of these separate departments they they’re more loyal to their silo than they are to the mission of the idea.
Doug: [00:29:39] And so they’re going to optimize it to make it easy for merchandising for packaging for manufacturing for finance. They optimize for their silo as opposed to for the good of the whole and they’re not to be blamed because it is their mission. And the metrics are evaluated on their job at the factory is running efficiently and you bring me something that’s going to mess up my factory will do. I hate doing that. That’s going to mess up my my bonus. So they’re doing the job that management gave them to do and and measured them on. And that job destroys the ideas.
Doug: [00:30:10] And until management understands that they’re going to continue to get the 5 to 10 percent success rate and declining profit margins that we’re seeing globally now for most large companies.
Dan O’Day: [00:30:21] I would think that a common problem would be large successful companies being presented with genuinely innovative ideas recognizing the values of those ideas saying Oh that sounds great. And then insisting that the bold new ideas be forced to fit into the company’s existing culture or belief system.
Doug: [00:30:45] That. So they get done they think they have a pile of ideas. So we got a whole stack. We call them yellow cards. They they sort the cards and then the right hand they put. OK. This idea never done that before. OK. This idea I haven’t done it they put it right. Oh this idea that’s like something we can do already. Put it in left pile dollar that idea. That’s easy enough. OK.
Doug: [00:31:04] So our next big idea let’s take the ones in the left pile the ones that are the exact same stuff as what we’re doing. That’s what we’re going to go do and until they fail before they begin to fail before they begin.
Dan O’Day: [00:31:18] So they’re naturally drawn to the most innovative of the ideas that they’ve already done.
Doug: [00:31:25] That’s right. And the ones that they already know how to do. In other words imagine if you were in Boston back in 17 whenever and you decided to go to California and you said I’m not going until I can see exactly how to get there. That’s what we’re talking about. There’s no adventure there’s no spirit adventure there’s no team signing on to saying well I don’t really know how to do it but we’ll run some experiments and we’ll figure it out. That’s just like not a lot you have to know the answer. In most organizations before you begin. This is insanity. It’s insanity. And the problem is is that the media makes these heroes of the original idea they make that the big idea as opposed to understanding what does it take to get the idea out into the market. And that’s what we’re doing with system driven innovation is we get all of the teams engaged on the mission and we teach them because how could they know to do anything other than what they’ve already done which is make it fit into that square hole that they’ve always had.
Dan O’Day: [00:32:23] So the first two of the five false innovation cures are more inspection and metrics and bigger rewards followed by what you call the big idea Hunt What is the number three false innovation here.
Doug: [00:32:38] Well this one I’m embarrassed on. It’s the skunkworks teams and I’m embarrassed on it because for many years I did these and would lead them and would encourage people. All we gotta do is just take the team and separate them and we can do it. And and sometimes you know we had pirate flags they were called Looney Tunes we were the crazy ones and we would take a small team and we’d work in a weird place and we would drive them to market very fast. We had a typically we do it in a biblical 40 days and 40 nights you know get get get through a test and it works. Of course it works. If they when they the minute they don’t have to work on the crappy systems that exist in the organization anybody can do it. It doesn’t take much to do it. These are smart people in these companies by the way the smart people but inside that system is Dennis says 94 percent of the problems the system. Only 6 percent of worker. The problem with this is is when the idea then goes into the real world adults into the corporate system that idea that you shuck and jive with an ID you put together with bubble gum and strings and you had made it work. All of us someone has to scale up and you have to use the infrastructure. Well it’s the killing zone again. And what makes it worse is the CEO oftentimes will brag about how brilliant that team was at work there. We need you to be like that to well everybody said the same. Yeah right. So guess what they’re going to do. I mean they got the Gatling gun out. You’re over. It’s done. You have to get the whole to do it. We have to change the culture. We have to enable innovation by everyone everywhere every day as we say. That’s what we’ve got to do. And besides why should only a few people have fun. Can’t everybody have the fun of creating something new. I mean I don’t get it.
Dan O’Day: [00:34:24] So we have two more false innovation cures. What would number four be well this is this is very popular today which is to buy an innovation culture.
Doug: [00:34:34] Well we’ll just buy a group that’s very innovative and do it. And a company I talked with recently was talking with a senior person and he said the bed they’d bought this company. I said Well how big is it now. He says Oh it’s it’s about 100 million. So that’s very interesting. I said What are you going to learn. Oh he says they’ve been very innovative. I said well what’s the founder doing. Well the founder well the founder’s gone so well the brains just laughed. Isn’t that easy. He’s drinking umbrella drinks down in Tahiti now I said so how much do you think you’re going to learn when it’s now at the size that it’s at all. Oh, there’s a lot to learn.
Doug: [00:35:09] I said you learn from zero to a million dollars and then to 10 million dollars that’s where the learning is is is. As you go through that process by now they’ve hit such a stage that it’s just not going to happen in anybody that does a startup. You know their desire to go in and and change a corporate culture is like a root canal without Novocain. I mean they’re just not going to do it. This is oil and water.
Doug: [00:35:37] And so it’s just not I don’t understand what they’re thinking. I mean it’s just words said by people who’ve never done it as best I can tell.
Dan O’Day: [00:35:46] Has there ever been an instance in which company bought an innovation culture and it succeeded.
Doug: [00:35:55] Not a culture. There have been some companies that buy it. I mean Apple buying Beats. They kept the founders there and they integrated them together and that seems to have worked OK. But that’s really the exception most. Now then you know you had an innovative group going to an innovative group so I guess it’s not even a fair campus comparison. Actually I’m thinking about that’s a stupid thing to say but no not that I know of. And if somebody knows when send me an email I mean let me know. I posted above to know but I can’t imagine that it’s ever happened. And Dan I got to tell you I think also part of what happens here is that they have a short attention span you know by the time they bought it.
Doug: [00:36:37] You know it’s probably been 10 years eight years of struggling and then they were an instant success. And so the company comes in and do it and they want to have the whole thing happen in six months or a year and they just don’t have the patience even if they did.
Doug: [00:36:52] I mean we work with companies now and I’ve taken a hard stance on I mean you know we can help them find filter on fast track or we’ll teach them how to do it. And they say well I want a culture.
Doug: [00:37:00] I said okay you to sign a three year agreement what mean mean at least three years and they’re like Well I don’t want to do it three years.
Doug: [00:37:09] I said OK well once you work with whoever it says they can do it sooner but it was never work. I said That’s right part of why you need to have a three year commitment so employees know because otherwise what they do is you start you know this works. You start these things and the employees are going. Here they go again. Just a matter of time. But when you publicly say this is a three year commitment and there’s no other option we’re not going back Different story different message.
Dan O’Day: [00:37:35] So that’s different than the boss just came back from a conference all excited about this new idea of the week and next week there’ll be another new idea of the week. What’s the point.
[00:37:49] That’s right. That’s right.
[00:37:51] The final of the five false innovation cures is to be a fast follower.
Doug: [00:37:58] There are people who have a they have the thought that maybe if we just don’t innovate too much if we’re not like the first one if we just follow the problem with that is the money doesn’t show and there’s about seven or eight studies and in my book meaningful marketing I say to them that show that the first gets the lion’s share of the profits and the profits drop radically because what the copier can do copy has two problems. The first problem they got is is that they’re late getting there and the person that was out there first is already going through the experience curve and they’re already starting to save money and become more and more efficient.
Doug: [00:38:33] And you’re coming in inefficient at the startup because the startups are always inefficient. So you’re behind on that curve and then the second thing is you don’t have a point of difference.
Doug: [00:38:42] And once customers they will give a reward to that to the leader unless you have a meaningful uniqueness versus them. People like okay that’s fine. But you know the other guys you know I mean they’re the pioneer that they did it. They’re the best at it. They’re just a copy. Besides you know if you’re an employee what you want to do well let’s work you know the Xerox company we copy other people. We don’t do anything original here.
Dan O’Day: [00:39:06] What about all those people who warned that pioneers are the ones with the arrows in their backs.
Doug: [00:39:12] Well the data doesn’t show that. So let me give you example. Big ideas versus small ideas. We call them leap versus core he put different names disruptive whatever the data shows that both fail at the exact same amount. The differences is when they’re big ones. Emotionally it feels like a bigger deal to us. But the reality is as little ideas are dying just as fast it’s just not real. The data doesn’t show that.
Dan O’Day: [00:39:44] So this is another manifestation of the psychological principle of I remember a football player once expressing this when he said that the joy of winning is nowhere as strong as the pain of losing. And so the losses are the mistakes or the missteps. Stay with us longer. Even if they were they had no more of an impact than the correct new steps in.
Doug: [00:40:18] I write about the fact this a lot of studies on this that show exactly what you’re saying in the academic literature is called prevention of a negative that’s the reason why political advertisements are so obnoxious to watch. It is four times more powerful to say Vote for me so that we don’t get that thing than it is to say this is what I’m going to do. That loss aversion is literally for X more powerful.
Tripp: [00:40:47] This concludes the Dan O’Day interview with dog and it also concludes the second segment. And now we move to the Brain Brew Whiskey Academy’s segment
Tripp: [00:41:01] Doug you teased us a little bit last week about giving us a step by step process for meaningful uniqueness. So Doug let’s start there.
Doug: [00:41:17] So one of the keys to success with anything that you do whether it’s a new product news service is you meaningful uniqueness. And the question is how do you measure it and you really have to measure it. You’ve got to measure it from the basis of what potential customers perceive to be your meaning for uniqueness not we use think issue meaning for uniqueness. And the biggest problem most folks make is they overestimate how spectacular their offering is. They think it’s much more unique than it truly is. And so this is critical to making decisions with regards to if you’re going to go or not. You know people think it’s very risky to start a new business or to do a new product or service well it is if you’re just doing it by judgment but if you measure it and you quantify it you make a data driven decision that’s going to change all of that. Now when it comes to evaluating let’s take the example of the product that’s the simplest you can do the same thing with services but we can talk about that in a future episode.
Doug: [00:42:21] But let’s just keep it simple and say in products in use for example the whiskey business as an example for it because there’s a lot of craft distillers and want to be craft distillers that are listening to the podcast obviously. So what you have to do is is there’s two elements that you’re going to measure you’re going to measure the idea or the the basic concept that you’re talking about in the case of a whiskey. The idea the packaging the the words that you might say or the pitch you might say with the whiskey and then this and then second you’re going to measure the product itself is the product is the product is good is what the promises were not as good or as the product better is the product works whereas. So the way you might do this is the first thing you do is you have to create a concept of the idea. And this can be just a piece of paper or it can be an actual bottle something that explains what the idea is.
Tripp: [00:43:16] So for your whiskey business what was what was the idea. Because to me I’m getting mixed up in my head between idea and the product itself if that makes sense.
Doug: [00:43:26] Good good point good point. Thank you. It was in our case we would show them a picture that would show the packaging and then it would have the words that would be the back maybe the back of the package.
[00:43:40] So you know in one case it might be an extra smooth easy drinking whiskey you know might be the idea for the whiskey and then they’d be the product right there and you could see what it looks like.
Tripp: [00:43:51] Ok. OK.
Doug: [00:43:53] Then what are you gonna do. And there’s a lot of different ways we can do this and we’ve got a lot of digital ways to make it faster and easier but let’s just keep it very simple we’ll do it with paper and pencil.
Doug: [00:44:02] You’re going to put together a sheet we’re going to ask two questions two primary questions.
Doug: [00:44:09] One question is how likely are you to buy this product and the scale runs from zero to 10 and what I do is I put on the piece of paper zero one two three up to 10 and over the zero I put definitely not by and over the ten definitely would by so I’m going to ask you basically on a scale of zero to 10 where zero is definitely not buy in tennis definitely would buy. How likely would you be to buy this product. And people tell you a number four five six seven eight whatever it might be.
[00:44:47] Then the second question you’re going to ask is how new and different is this idea. Again on a scale of zero to 10 zero not at all new and different.
Doug: [00:44:56] Ten extremely new and different what those two questions give me the purchase question in the new and different is basically meaningful uniqueness following you.
Tripp: [00:45:11] So that so the first part of it is how likely I’m in to buy is that that is that that’s the meaningful part right. Yeah. And the unique part would then be how new and different.
Doug: [00:45:21] That’s right. OK. Now to use those scores now you’ve got a number and you’ve got a bunch of people that have given you numbers. Then what you’re going to do is you’re going to average their numbers for each of the questions independently seal average up all the people that responded on the purchase score you’ve got threes and eights and sevens sixes and you just do that the average you do the same on new and different than what the research shows. So we did tracking research people and what the research shows were we asked people questions and then we found out what happened to the marketplace is that the most predictive measure of what’s going to happen in the marketplace is a 60 40 waiting basically 60 percent on purchase 40 percent on new and different the way you do that is you take your number from purchase multiply times point six and you multiply your number on new and different and you multiply times point for you add them together. OK. So 60 40. So now you’ve got a number and number ranges anywhere from zero to 10. So the question is what’s that worth. Well I mean we’ve run literally thousands upon thousands of tests and so we’ve got norms for all kinds of categories and industries.
Doug: [00:46:37] But as a rule of thumb a 5 is OK 5.0 for the for the Meaningful Uniqueness score the blended number a six is good that’s very good.
Doug: [00:46:51] And a seven is spectacular.
Doug: [00:46:54] And in fact a seven versus a five is like two hundred fifty times 20 50 percent more likely to generate word of mouth it’s an exponential kick when it goes up like that with our whiskey business we’re looking for a 7 is our basically go position and that’s a 7 not only for the idea but it’s 7 for after they taste it. So we might ask people how likely they are to buy it. Now we say now taste the product and now scored again and sometimes it goes up sometimes it goes down and we’re looking for a seven. In both of them. And if we got that we’ve got it.
Doug: [00:47:33] And the reason we want to do that is because as a craft Whiskey Company what we don’t have the money that the big corporations have you know all the big conglomerates that own most of the Bourbons and scotches of the world and they’re all owned by giant companies from Japan and all this stuff.
Doug: [00:47:50] They got tons of money. We don’t have money. So we’ve got to be more innovative which means more meaningfully unique. And so while their idea might be the same old stuff they’ve always done and it’s really not that exciting. It’s a five ideas a seven that helps equalize the fact that they got more money than us. With regards to getting word of mouth social media and all the rest of that.
Tripp: [00:48:10] Ok. All right. And so you know as I’m sitting here and I’m thinking this is one thing I you know I’m more of an operational background type of guy and not the marketing piece but I.
Tripp: [00:48:21] But I’m thinking Who are you going to to test these things because you know if I just walked into a bar and I started people there’s going to be people there don’t want to don’t like whiskey at all let’s say and then there’s going to be people that have drank it for you know 50 years. So. So how you how you figuring out what your frame is for people that you’re you’re asking this question too.
Doug: [00:48:47] So it’s it’s a it’s a really good question.
Doug: [00:48:51] And let me tell you the mistake that people make people at big companies who do this all the time they will recruit people who already like their brand and ask them if they’re likely to buy the new one they just trying to raise the score is that idea. So they can market the answer is that so that they feel better about it. It’s to make them feel good. My what I teach and what we teach and driving Eureka and what we teach in our courses that people can take.
Doug: [00:49:20] And by the way we just Tripp I want to let you know we just upgraded all of the online course of this online fundamentals course which is cool. So we’ll talk about that another episode but it’s a really cool what the folks have done. But in the course is what we teach is we teach people to take a more. You know let’s take it as a whiskey as an example. Basically the general population of people who drink alcohol and they raise it but you’re going to ask them how frequently they buy they drink whiskey because you’re going to look inside the data. And this is where the automated tools help because it allows you to sort it easily but you can do it in a spreadsheet too is you want to see what people who drink whiskey a lot are like and what people who don’t drink whiskey are like because in a perfect world like the easy drinking whiskey I was talking to you about that product actually brings new customers to whiskey. People go Oh my God. That’s the first time I’ve had a whiskey I actually like.
Doug: [00:50:17] And so if you only test amongst the existing you’re not going to grow the business and you really want to grow the business not just swap off share. So you want to look at people beyond just the people that always buy whiskey because you want to see if can you get some new customers. I mean we’re only 18 percent of people who drink alcohol in the United States drink whiskey in the last 12 months 18 percent. That’s it that’s all it is for all the hype of the rest of the stuff. This is a relatively small amount of people that drink whiskey. And so one of the great opportunities and in fact with our brain brew custom whiskey one of the great opportunities is is you open people up whether it’s through the cocktail experience or whether through custom whiskey where they can finally get a whiskey that matches them because what people in the industry do is they keep making whiskey for the hard cores as opposed to making it accessible to the new person.
Tripp: [00:51:12] Ok. Well this is this is very Deming. This is because Ford and General Motors and Chrysler all fought over market share for such a long period of time. Meanwhile the Japanese came in with not only better quality products but better cars for purpose. But they started in with the smaller car. So your mindset is let’s expand the pie rather than fight over the pie.
Doug: [00:51:36] Yeah I mean you can call it the famous red ocean versus blue ocean. I mean it’s the same thing it’s how can you grow the business.
Doug: [00:51:43] And it’s that’s what is sort of the key to this whole thing is what you’re looking for. But it really gives you a sense now. I’ll tell you the killer on this is it is really hard to get those scores up there so. So don’t like lose your mind when you get a four point two. Because it’s gonna happen. The key is you’ve got to find a way to very rapidly do this because you have to do a lot of cycles to make it great. And ninety five percent of the innovations that are done fail. OK from big companies. Less so with small companies. But you know and the reason they fail is because they weren’t that good to begin with you know they were a variation a hair splitting difference if you want to make a difference you got to make a difference you’ve got to do something that’s really different and that’s why I’m frankly so excited about our whole time compression system because we can use different woods. We we can change the pressure cycles. We can create taste you can’t create you can’t create them in a typical barrel aging. That’s a benefit. Oh yes it’s cheaper. Yes it’s fast. Yes. So what the exciting thing is the amazing new taste stitcher able to create which frankly is craftsmanship. Even though we’re using science in a craftsmanship way.
Tripp: [00:52:56] Ok. OK. Very good OK. Well let’s let’s go to the drink here that you talk about or that you give us the ingredients and how to mix it and everything which is the Jalapeño Julep cocktail and it looks like there’s quite a story behind that. Why don’t you give us a little bit on the story behind this particular cocktail
Doug: [00:53:22] Okay on Netflix there’s a series called The Mind Of A Chef. And it was on that show that I met a guy named Edward Lee who’s the chef and owner of Magnolia 610 of Louisville just down in Kentucky just down the river from us. And he has a bunch of other restaurants and he there’s a number of sequences in there that he does shows and by the way just as an aside his you can Google it. It’s in YouTube. His fried chicken and waffles recipe will kill. I mean just make it and make it exactly as he says. Watch the YouTube video and then it’s amazing. It’s amazing. It is truly amazing the greatest fried chicken. I mean the ranch staff doesn’t know it but for the Christmas party this year I’m making Edward Lee’s fried chicken and waffles and everybody says they’ve got the greatest chicken in the world. Let me tell you. It’s especially good to watch the YouTube clip. It’s about three or four minutes because he really explains why he’s doing it and he is a fanatic about fried chicken. Now as it turns out so some Tim and Sue Hogan – good friends of ours we were doing the distillery tours and so we went to Magnolia and we got his cookbook down there and we also do the tasting menu which is a blow away I mean blow away and I’m and I’m tough on all food and beverage and that kind of thing. And so I don’t say anything amazing like this about the list it’s like blows your brains out. And Edward Lee is one of those guys who’s who’s doing it and his cocktails were amazing.
Doug: [00:54:53] And so this summer we made a bunch of his cocktails and then I did some riffs on it because what he likes in spice and or what he likes in sweetness is a little bit different so the happy new julep cocktail that I’m going to recommend is the one that I like. It’s a little different than his but it was clearly it was inspired by him and it gives a real kick to the menu of mint juleps. I’ve been to the Derby you know sometimes they’re just these sugary concoctions that are just not very good. Not very good. It is a difficult. I think it’s a very difficult drink to get the right balance of the mint and the sweetness and get the right bourbon and people tend to use cheap bourbon which makes for a crappy cocktail to make that right. And and so in fact I Relativity whiskey that we’ve got up in the Boston area is really perfect for this cocktail. It really nails it. So so my way of making it makes it more stable makes it more robust. You have a better chance of getting it right. OK so before you begin what you’re gonna do is you’re going to make a Halloween your serve in the way you’re gonna do this and this is again a spin off Edward Lee’s version is you’re gonna take a half cup of water and a half cup of sugar. Now before that before I get in the recipe I want to remind folks that in the show notes is a recipe so while you’re driving I don’t want you writing this down or drinking it.
Doug: [00:56:29] So what we’re gonna do is before you began what you can do is you get. Make the jalapeno syrup and you can do this by mixing together a half cup of water and a half cup of sugar and one Jalapeño that you’ve chopped seeds and all because we want the heat out of the seeds. Ok so you got to put all of that in a in a source band you’re gonna bring it to a boil and then turn off the heat and let it steep for about 20 minutes then you’re going to strain it put it in a little plastic container or a glass jar and put it in the fridge so to chill it out or if you in a rush just use it whatever.
Doug: [00:57:06] Now to make the cocktail you’re going to take a rocks glass and you muddle together some mint and if the leaves are small I would use nine leaves and if they’re big ones I’d use six. So it’s in the six to nine and I’m sorry for the variance but I’m explaining it to you. It’s a good hefty amount of mint.
Doug: [00:57:26] And you’re going to add one teaspoon of the Jalapeño syrup. One teaspoon of Jalapeño syrup. And then you’re gonna. It’s called muddle it. And the special muddlers that have grips on it. But you can also just take a wooden spoon or something and you really want to mash it good you want to mash it Good you want to get the oils out of the mint and the stems you really want when you get that out.
Doug: [00:57:50] Then you add two ounces of. In my case I use our relativity. The new American whiskey. And if you don’t have that use a local craft brand.
Doug: [00:57:59] Add crushed ice if you have it. If you don’t some ice cubes.
Doug: [00:58:02] And I stir it a lucky. My thing is a lucky 13 times I start and enjoy and it’s amazing because you get this wonderful tension between the sweet mint the heat the the the whiskey. They just worked together such that the sum of the parts is much greater than they are individually. It really is. It is amazing. If you want more heat putting more Jalapeño. I originally made it with two which is was way too much for people. I loved it but I didn’t get it.
Doug: [00:58:39] And if you want a little less you can you can take it down to you want a little sweet add more. I tend to like my cocktails to have a touch a sweet not to be thickly sweet. I’m a little bit on the drier side on all of mine. So if but it’s easy to make it with one and if you think that’s not enough add another half a teaspoon or add a full teaspoon and two you get to what your thing things the key with cocktails is is make it how you like the taste and in fact when I’m sitting there and I’m making cocktails for people I will make my base one which tends to be drier and then people say would you like would you like a little bit more sweetness and if it’s like a old fashioned I might add another half teaspoon of simple syrup or Jalapeño syrup to it just to sweeten it up a little bit. It’s easy to add it’s impossible to take away obviously.
Tripp: [00:59:29] Really. Go ahead. You know and I like sweet. And for whatever reason. But I do like the hot idea the hot and you know the balance I guess is the key according to what you’re saying of the three and then it’s the individual taste.
Doug: [00:59:48] The main thing I want listeners to take and embrace is the whiskey world is has been built under a lot of rules.
Doug: [01:00:01] How are you supposed to drink it. How you have to make it and traditions and we’ve got to blow that up. I mean this is about what you enjoy. Take control over don’t let anybody tell you how to do it. That’s why with all of my recipes I’m going to talk to you at two ounces or an ounce and a half use rye if you want it whiskey forward use bourbon if you want to soften it up a little bit. I mean I’m going to give you those options because you want to get to your tastes because life’s meant to be enjoyed and these is supposed to be fun.
Doug: [01:00:32] You should not never ever drink something that doesn’t taste good. I am. I’ve become vicious about it. You know at restaurants I always ask for a taste of wines because I’m not going to drink bad wine. I don’t drink bad whiskey. I don’t drink eat bad food. Maybe it’s I become an old crusty fart. But you know we can demand in today’s world that that we get quality products and so you should make it as you like. And if you’re at a at a at a craft bar and you say they make your cocktail and you don’t like it tell them they want to know that I can tell you that they want to know that because they’ll bring you something else because they want you to be happy. And and the more people speak out then the better quality we’re going to get on these things.
Tripp: [01:01:17] And I just kind of want to tie this back in to something that you said earlier which is you know getting to a 7 is really hard. And you know I’ve just as you were talking there is thinking in terms of you know if somebody is not going to like that that whiskey or that bourbon just right off the bat they’re going to get about three or four. So now I can kind of understand why it’s so hard to get to a seven never mind a nine on that particular scale because you’re you you’re in essence testing these whiskeys with a variety of different with different tastes and people. Is that is that kind of how it goes.
Doug: [01:01:58] Yeah I mean yes and yes you get a feel for it but when you start to push the edges you got to test them. You got to test.
Tripp: [01:02:08] This concludes episode four of the driving Eureka podcast
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