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In his book “Collective Disruption:   How Corporations & Startups Can Co-Create Transformative New Businesses,’ Michael Docherty lays out a vision of how established companies can create a strategy for innovation that includes partnering with startups, thereby enabling an “innovation ecosystem.”   This post is the fourth of ten reviewing the various chapters of his book in preparation for the Leadership Forum 2016 event put on by the Chicagoland chapter of the Project Management Institute on May 20th, 2016.

In the first part of his book , Michael explains the reason why open innovation is the recipe for creating innovation that is truly transformative, rather than just maintaining or expanding the core business.   In the second part of his book, he lays out his prescription for “collective disruption” as a way to achieve that open innovation ecosystem.

In the last chapter, Michael laid out the four phases of the collective disruption process:

1. DISCOVER:  identify transformational opportunities relevant to your business.  Bring with a customer focus and then identify the key players and the networks.   You need to provide seed funding and resources for these activities.
2. DEFINE:   define opportunities for an initial business opportunity through an iterative process, and use assessments to decide whether to explore these opportunities further or drop them.
3. INCUBATE:    Apply a modified version of lean methodology which can be done in one of three ways–1) inside-in (integrated), 2) inside-out (accelerators), 3) outside-in (imbedded entrepreneurs).
4. INTEGRATE:   Design new teams and structures that are both separate from and connected to the corporation.    These teams need to be separated to allow them to operate outside of the tight financial control of the current business, but they also need to be connected so that they eventually be absorbed into the existing corporate framework or spun off as something entirely new.

This post covers the sixth chapter, which covers the DISCOVER phase of the collective disruption process.

The first key step is to be clear on your goals.   Why are you looking for and what are your partners looking for?    However, you cannot settle on detailed plans and objectives based on some preconceived notion of what you’re trying to create.

To illustrate this point, let me relate the story told in Douglas Adams’ book The Hitchhikers Guide to the Galaxy.    In the story, a group of executives who want to assist a new colony in space to organize their society get on a spaceship headed towards that colony.   Unfortunately for them, their ship gets sucked into a wormhole that takes them back to prehistoric Earth in the time of the cavemen.   Undaunted by this setback, the executives decide they are going to use their advanced technology to jumpstart the technology of these primitive people by teaching them innovations such as fire, the wheel, etc.  But their project gets off on a rocky start, because the marketing department cannot decide what color the wheel is going to be.    (Their parallel efforts with introducing fire to the cavemen are similarly stymied by the fact that they cannot communicate well enough with them to organize a focus group to find out how the cavemen relate to fire.)

Now this is, of course, a parody, but it illustrates the concept Michael is talking about regarding making plans which are too detailed at the beginning.    I’m sure the cavemen would be impressed by the wheel no matter what color is turns out to be.

The strategy should be one where the solution emerges in a meaningful way.   You should have a GENERAL idea of which direction you are going towards.   Then, you develop a number of focus areas defined by a set of related opportunities that can fuel a line of products or hopefully a whole new business.    Michael refers to these focus areas as hunting grounds, and the key elements of a productive hunting ground are:

• it is defined by a set of consumers or customers and a set of unmet needs
• market gaps are observed where current players are not adequately addressing current and emerging needs
• it is narrow enough and actionable enough to enable efficient focus of resources to develop and identify solutions
• it is broad enough to encompass a variety of opportunities and not a single product solution

There are two elements of the process of finding success with a particular hunting ground.    One is making sure that the process is an emergent one, so that you use the startup as a sensing network that, like a dousing rod, gets closer and closer to a viable solution.

And the second element is making sure that the startup has an accurate signal about where the solution is.    This is done by focusing on

• Who the customer is (articulating a clear definition)
• What problem the customer faces (again, with clarity)

You need to get face to face with customers, which requires getting out of the building to TALK with them.   If you cannot find the customers you need for customer development interviews, it may be that may not exist in the numbers that you’re projecting on your spreadsheets.

In other words, customers are your first and foremost reality check on whether your dream is possible or not.

The next post will cover chapter 7, which goes more into the DEFINE phase of the collective disruption process.

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