On this week's episode of Inside Outside Innovation, we sit down with Scott Anthony. Scott is a senior partner at Innosight and co-author of the new book called Eat, Sleep, Innovate. Scott and I talk about the challenges of creating a culture of innovation, as well as some of the behaviors and actions required to drive innovation success. Let's get started. 

Inside Outside innovation is the podcast that brings you the best and the brightest in the world of startups and innovation. I'm your host, Brian Ardinger, founder of insideoutside.io, a provider of research events and consulting services that help innovators and entrepreneurs build better products, launch new ideas, and compete in a world of change and disruption. Each week we'll give you a front row seat to the latest thinking tools, tactics, and trends and collaborative innovation.

Brian Ardinger:  Welcome to another episode of Inside Outside Innovation. I'm your host, Brian Ardinger, and as always, we have another amazing guest. Coming to us all the way from Singapore today is Scott Anthony. Scott is a senior partner at Innosight and co-author of the new book called Eat, Sleep, Innovate: How to make creativity an everyday habit inside your organization. Scott, welcome to the show. 

Scott Anthony: Brian, it is a pleasure to be here. 

Brian Ardinger: I am so excited to have you on the show. You are a prolific author, speaker, consultant, in this world of innovation. So, it's really nice to sit down virtually across the ocean and talk to you more about some of the new stuff that you're working on. I always like to ask folks who've been in this space a long time, and you've written a lot of books and talked about this particular topic. Why did you decide to write another book on innovation and why this book now?

Scott Anthony: The origin story of this book really traces back about five, six years ago. So just by background, our organization Innosight was co-founded by the late great Harvard Business School professor Clayton Christianson. So, for the last 20 years, we've been trying to empower forward thinking organizations to navigate disruptive change and own the future.

And most of the work that we've done is focused on helping businesses, identify and launch new disruptive products, come up with board facing growth strategies, build deep organizational capabilities and so on. So, it's been, you know, pretty big picture, strategic stuff. Then about five years ago, I was doing a session with a big logistics company. And the CEO said, I've read all the books. I understand what I have to do separate organization, but we've done all that. We've got 28,000 other people. What do we do with them? 

And I thought that's a really good question and we didn't really have a really good answer to it. So, over the last few years, we've had a chance to just probate it through various client projects. And now I think we've got a pretty good answer to that question. And that's why we wrote the book 

Brian Ardinger: it's called Eat, Sleep, Innovate, and it really talks about almost the behavioral things that you need to put in place to make innovation a competency within an organization. So, talk a little bit about the overall framework and what people can expect to get out of the book.

Scott Anthony: Yeah. So, we start the book with definitions. We're trying to enable people to create a culture of innovation. So, you got to define that. We define innovation as something different that creates value. Intentionally broad to remind this is not just about technology. We then say there are five behaviors that enable innovation success. You gotta be curious, customer obsessed, collaborative, adept, and ambiguity, and empowered. And then argue that a culture of innovation is one in which these behaviors come naturally. 

We start with the definitions and then we introduce a puzzle, which is those behaviors, sound pretty straightforward. I've got four kids. I don't have to teach them to do those things. They just are that way naturally, because that's what humans do. Yet organizations, we all know really struggle with innovation. And what we highlight in the book is the key problem is essentially the existing habits of the organization, institutionalized inertia that allows you to keep doing what you're currently doing but stops you from doing something different and that's innovation.

And then we talk about what do you do to break and reform habits, to overcome those barriers, to really make innovation of repeatable habit. And we've got some specific tools and techniques about how to do it. So that's the basic arc of the book. 

Brian Ardinger: It does a great job of a lot of case studies, a lot of insight into some specifics on how you can make this happen. But the thing I keep coming back to as I work with companies and I talk to other innovators like yourself, innovation is a team sport, but at the end of the day, it's like, who helps drive that bus. So, a lot of the stuff that you talk about, right, are behavioral changes and that. Does this have to happen from the top of the organization or is this something that you roll out division by division, person to person? Talk a little bit about that. 

Scott Anthony: The answer is of course, yes. Which means that both are true. So, it really depends on what you're trying to do. Ideally, if you're trying to create enterprise level culture of innovation, if you're trying to really have it be something that scales across a multi-divisional whatever. Yes, of course, you need to have the topic leadership actively involved because there's a lot of work that needs to get done. 

But that doesn't mean that if you're a manager inside a large established organization, that's not doing this, that you have no hope because you can, within your team, group or department, create essentially a microculture subculture, whatever you want to call it, that enables those innovative behaviors to happen at a very local level.

And we have an example in the book, chapter four of the book talks about the HR function within a large organization in Singapore. Singtel, the biggest telecommunications company in the region. So that was not an enterprise wide effort. It's really the HR community saying that we want to do this. We had another recent client where it was the supply chain community. It said we're getting a lot of pressure to do different things. We need to up our innovation game and we can't wait for the enterprise to do it. So yeah, ideally, you've got top down, but there's also plenty of room to have things happen in pockets that could have lots of impact. 

Brian Ardinger: And I imagine that allows for that creativity and the uniqueness within the division or within that particular group, the specifics of how that culture is addressed, the specific rewards, et cetera, are probably different based on what's required to move that team forward. 

Scott Anthony: A lot of this in our view is not about how you change how people are rewarded. You know, money is sometimes the worst way to try and change behavior. Cause it's really hard to get right and all that. It really is trying to create an environment where people are encouraged to follow the behaviors and they're supported when they do it. And that it means they're supported when good things happen. But also, when they go and run an experiment and it doesn't work, which in many organizations feels like a failure that gets punished. Exactly off with their heads. 

There is an environment where we say, if we did that in the right way, sort of way, this is a good and not bad thing, and we can encourage it. So, a lot of this is about people just feeling like they're able to practice and do different things and getting the intrinsic enjoyment that comes from that. So, it's not just about how they're getting paid. It's about really bringing the humanity back to organizations. 

Because again, my basic argument, and my kids are 14, 12, nine, and four, is that the things that we try to tell our clients to do are things that my 4, 9, 12, they just do it naturally. So, when you get the chance to do that at work, you can play around with stuff. You can see the impact from the things that you do. You can collaborate with cool colleagues, you can go try stuff in an environment that supports you doing it, and it helps you win. It helps you function better. It helps you be more engaged. That's awesome. I mean, that's rewarded and of itself. 

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Brian Ardinger: Companies are not necessarily good at innovation. They have their existing business models, and their existing practices that have gotten them where they're at. And so, it's very difficult for them to change those particular habits because everything's been set up to optimize that existing process and the methodology and that. So how can companies overcome that barrier and that natural hesitancy to not want to do things different because that's what they're rewarded and that's what they've been designed to do? What are some of the things that you've seen that work to break that chain and get people moving in the right direction?

Scott Anthony: At a micro level, and this is what we go into in chapter three of the book, which really is the big chapter that talks about the tool that's offered, because there's a lot written about culture change. You've got to walk the talk and have a great start off that you got to do that. But the tool that we add to the arsenal is this tool that we call a BEAN. A BEAN is a behavior, enabler, artifact, and nut.

The idea is ripped exactly straight out of the behavioral change literature that says it's hard for human beings to change habits. So, what we need to do is start with the behavior, your enabler, where you give people a sense actually step by step guidance about what you want them to do. Daniel Kotteman would say that you're activating system two, the rational logical part of your brain. And you're giving people the help, the community, the coaches to support to do it. 

The artifacts and nudges go after system one, the part of your brain that makes quick decisions and like the name suggests you have the invisible stuff that directs you in a particular way. It might be an image that subtly reminds you of something. It might be getting a leaderboard to show, Oh, I'm not doing this thing as well as my colleagues, so I want to do better at it. It might be changing office design at times where we could be in offices to encourage you to do different things. And the combination of a behavior enabler with artifacts and nudges enables you to overcome blockers and barriers and create new habits.

Both we've got 101 of them that offer practical guidance for how you do everything from being that much more curious to empowering your employees. Some of them come from well-known organizations like Amazon.com. Some of them come from smaller organizations that people have never heard of before to show the ubiquity of the idea.

Brian Ardinger: So, what are some of the best Beans out there? Give us a case study or example of some of these things that really resonate. 

Scott Anthony: A few of the ones that I found really do resonate with people. If I start with Amazon.com, the empty chair ritual, where you say we want to be a customer-focused organization. So, we're going to make sure what we have physical meetings. There's always an empty chair there to remind us that the most important person, the customer is not in the room. And then you couple that at Amazon with doing what they call, press releases from the future. So, when you're working on a new product, it's not lots of PowerPoint slides. You write a future, press release.

Of for when the product will be launched, obviously it has happened and you're imagining it, but the customer and the benefits you're giving the customers are front and center. So those sorts of things are things that people relate to. I love the Adobe Kickbox program, that the software company, where if you're a participant in it, you open up this kit that you receive, and you get all these step by step guides for how you can go and experiment.

And you get a prepaid debit card with $1000 US dollars on it that you can spend without anyone's approval, which is a very clear nudge that you are meant to go and do things. And then finally I love the ritual that Supercell, the Finnish gaming company has. We call it cheers to failure. Whenever they have a gaming effort that doesn't work, they admit defeat. They all come together, and they pop open a bottle of Champaign, to show everybody number one, a good, not bad thing has happened. And number two, we're not working on this anymore because one of the big things that can cause innovation to struggle inside large organizations, is nothing ever gets shut down.

So, you have all these zombie projects that are lingering on and the cheers to failure Bean, make sure that that doesn't happen. And again, there's a bunch more, but those are some of my favorite ones. 

Brian Ardinger: Let's talk a little bit about how this is playing out. And obviously the world's changed quite a bit in the last six to eight months with the COVID pandemic and everything else. Are you seeing in your work, the move towards companies and leaders saying, I've got to figure this out now. We've been talking about disruption for a long time, but now I kind of get it. So, what are you seeing as far as trends and changes in the marketplace? 

Scott Anthony: It's a great question. You know, one of my colleagues, Patrick Viguerie, the observation that he has is people talked about the different letter shapes that a recovery could ultimately follow. But what we're seeing now is very strong evidence of what you would call a K shape, where there's some parts that are going up, you know, like thinking about zoom, the other parts that are going down, think about airlines. So, I think you see the same thing as it relates to the innovation. There are some people who say, this is the moment the deck of cards has been thrown in the air. I can completely redo it. I'm going to double down. I'm going to really aggressively move. 

There's a professional services company that we've worked with in the region that's really trying to fuse together traditional delivery with new technology, AI enabled services and changing very traditional profession. And this has dramatically accelerated what they're trying to do. So, you see some of that. You also see some organizations that are just fighting for the day to day. And, you know, I understand that to a degree, but ultimately history shows those that see the opportunity, those that sees the opportunities, create the next 10 years for themselves. So, put yourself on the right part of the K that's the short answer to it. 

Brian Ardinger: So, are there particular mega trends or things that you're seeing that most organizations out there should be paying particular attention to? 

Scott Anthony: As soon as the pandemic started, we went and launched. When we do consulting projects one of the first things we do is what are the fundamental trends affecting an industry over the next 5 or 10 years? And we went early in the pandemic to say, which of these are being accelerated, which of these are being dislocated. And very clearly digital adoption has been catalyzed, accelerated, things that would happen at 10 years of half a day, 10 weeks in some cases. And that is true in just about every industry. 

The other thing that we noticed is that we had made calls about healthcare being fundamentally transformed. You know, our founder Clayton Christianson wrote a book 12 years ago, the Innovator's Prescription, that said the disruption of healthcare will bring care from centralized to decentralized locations. Will allow individuals do things themselves. That was already happening.

But as people reconfigure healthcare systems after the pandemic, that too will be dramatically accelerated through video conferencing, telemedicine through wearables and other sorts of things. I think the thing that is interesting is starting to think about what are the second quarter of facts. So, you know, at the beginning of any big event, the first order effects are pretty clear. Like we need more ventilators, we need more masks. It's the knock-on effects that you begin to think about. So, for example, there's one consumer packaged goods company that I was talking to, where they see a huge emerging need around products that have immunity benefit. It doesn’t really exist in the market now, but that's kind of a knock-on effect pandemic. 

And just like the global financial crisis led to asset sharing platforms. Uber, Airbnb were born in the middle of the global financial crisis, the great recession. You're going to see the same sort of thing here, where there are second order of facts where people think about wellness, where people think about how do we work in a more hybrid world, because I think that is the future world. I don't think we're all going to be sitting in our home offices. I don't think we're all going to be going to offices. It will be in between the two. Those, they figure out those new emerging opportunities are really well positioned to drive growth. 

Brian Ardinger: Well, we are definitely living in fascinating times. I would like to give people the opportunity to find out more about the book or about Innosight or about yourself. What's the best way to do that? 

Scott Anthony: Yeah. So, we've got EatSleepInnovate.com is the URL for the book and Innosight.com is the URL for the organization. I'm out there lurking on social media. LinkedIn is the platform I use the most, but I hop on to Twitter on occasion as well. And, you know, if you ever find yourself on Tong Sen Road in Singapore, you can come knock on the door, not too easy to get into the country right now, but, uh, you know, this too will change.

Brian Ardinger: Well, Scott, I do appreciate you coming and being part of Inside Outside Innovation and sharing your insights. I'm looking forward to continuing the conversation. 

Scott Anthony: Brian it has been great. Thank you so much. 

Brian Ardinger: That's it for another episode of Inside Outside Innovation. If you want to learn more about our team, our content, our services, check out InsideOutside.io or follow us on Twitter @theIOpodcast or @Ardinger. Until next time, go out and innovate.

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