Letting go is often the secret to successful innovation efforts, as Irish-born and US-based business adviser and author Barry O’Reilly knows well. He recounts the story of the senior executive of airline IAG who was wedded to the idea of a new booking system he felt would transform the business.
O’Reilly challenged him to test it with a group of customers who were totally underwhelmed. The executive was undeterred.
“Customers who really understood airline pricing and ticket types would understand why it was such a good product. Get me the right customer,” he told him. “So we did, a number of times, with the same customer response. Eventually the penny dropped and he admitted that the problem was the idea, not the customers,” he tells The Irish Times.
The executive, he hastens to add, went on to become a champion of successful innovation efforts along with colleagues on one of O’Reilly’s eight-week bootcamps. The secret was a change in approach, recognising what he didn’t know and setting about relearning based on solid customer-based insights, a process O’Reilly calls unlearning.
In the case of IAG, the results were tangible and impressive. A slew of new initiatives included the Hanger 51 Accelerator Programme, a collaboration with industry start-ups and disrupters to further challenge their thinking and behaviours. IAG adopted Blockchain to build the first digital identity service to share data safely with passengers taking connecting flights.
Key insights
The airline group also leveraged predictive analytics to analyse unstructured customer feedback and visualised key insights in minutes, a process that used to take months of manual data processing. A new transatlantic airline called Level was also launched in 2017 in response to increased competition in the low-costs long-haul market. Level sold 52,000 seats in its first 48 hours.
For O’Reilly the common denominator was a changed mindset. “Leaders throughout the organisation went back to the company with newly found confidence and capability to get uncomfortable and unlearn while helping others to unlearn, relearn and achieve breakthroughs.”
Letting go does not mean a `free-for-all' approach for your team
Unlearn is the title of O’Reilly latest book, a playbook on how to throw out approaches and attitudes that may have worked in the past but are no longer sufficient in a time of rapid business transformation. It suggests a three-step process of unlearning, relearning based on customer insights and an adoption and scaling process. The book is aimed squarely at those in leadership positions who need to model different behaviours themselves before expecting their reports to change. Letting go is a major theme and CEOs especially need to unlearn decision-making, he maintains.
“When you are a senior executive all of your feedback mechanisms suggest that everything that you are doing is working. Your get promotions and pay rises. Your reports come to you looking for answers to difficult questions, so you tell them what to do. When you embrace unlearning, you start to see things as a hypothesis rather than an assumption and so instead of imposing your own answers you build systems to rapidly test those hypotheses cheaply and quickly.”
Even in military settings, a command and control style of management doesn’t work. “Napoleon was a very successful general because he didn’t offer very specific instructions but rather communicated the intent of the mission – the what and why and the expected outcome,” he notes.
Very specific
Letting go does not mean a “free-for-all” approach for your team. “You need to be very specific about what you want to achieve. A clear and concise outcome of an initiative might be to increase customer retention by 15 per cent in eight weeks, for example. When you are clear about the aspirations and outcomes you desire, you will be able to properly explore the behaviours to attain them, determine the right steps to get there and then know through data and measurement whether or not you have achieved them.”
O’Reilly, who is speaking at IRDG's Leading Business Innovation conference in Kilkenny on October 22nd and 23rd, comes back to the theme of learning from customers, as in the case of IAG above.
“The reason the biggest, most successful companies in the world are all tech companies is that they have built platforms that allow them to discover exactly how their customers interact with them and to more deeply understand their customer behaviours. They are constantly going through cycles of unlearning what they believe to be true for what’s actually true, at a massive scale, and taking a data-informed approach to design their products and services,” he observes.
Where people feel comfortable about failure they are more willing to take risks
O'Reilly is a major fan of Amazon, a company he notes that deploys software multiple times per minute and which is constantly iterating based on customer data. "Jeff Bezos worked in hedge funds before retail so he was used to dealing with complexity and diversifying risk. Amazon sees technology as the strategic capability of its business and it uses it to rapidly experiment.
"Its so-called “two pizza” teams (10-12 employees) own business problems, with one team responsible for recommendations, another for search, another for booking engines and so on. They can directly see how their changes are affecting customer behaviour and optimise that at speed.”
‘Small bets’ approach
O’Reilly’s background in a Californian tech start-up and later work on lean and agile strategies cemented his belief in the “small bets” approach now very much in vogue in innovation thinking.
“It’s important to have a moon-shot vision but it’s more effective to have lots of small bets, where failure isn’t a disaster. Where people feel comfortable about failure they are more willing to take risks whereas, if something is too big to fail, it drives perverse behaviours.
“A problem with large companies is that they take on one or two big projects at a time and force them to work because so much has been invested in them whereas, what you find with experimental companies, is that they make hundreds of bets and learn from the failures. Failure is to do nothing. To do anything results in some new or surprising insights. You are always going to learn something, discover something or invalidate something,” he says.
O’Reilly’s four breakthrough innovation strategies
Reflect: step back and reflect on what you are doing and the results your effort is yielding. Ask if you are achieving the outcomes you intended.
Feed forward: feed the results of your first small experiments into the next ones. The quality of each experiment increases as you compound the lessons learned.
Scale the breakthroughs: learn from the small experiments and commit to grow and push out innovation initiatives.
Increase the unlearning: pairing greater experimentation with deliberate practice enables you to respond to a rapidly changing world.
