Innovation Without Breaking Your Business

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For the past 2 or 3 years, Everyone's been talking about innovation, but really they're just talking about AI. So are they innovating? Not—

or the robots doing it for them?

Correct. I wanted to go back to basics for this to talk about how you can innovate your business without breaking it, because I know you've done both.

Yeah, but right now I'm in a Matrix moment of trying to figure out what's innovating and not.

We're going to figure it out. Stay tuned. She's the CEO.

He's the marketing and operations guy.

If it's broken, you need the Business Fix. It's more spring now. I feel better about it.

There's no more snow. It's been a couple of weeks. We're above freezing.

Right, right. I mean, there's always those days where you're like, mm, is it going to frost? Is it not going to frost? Is it going to—

Yeah, I don't know. I stopped wearing a coat in April. So like first week of April, I was like, screw it. That was not a— that was not a smart choice.

You're just gonna break— you just break—

I just braved through it. And now I feel like— I mean, like Caleb, the 14-year-old, was in March. I was like, that is not—

I was about to say, did he maintain that?

He did. He did.

Wow. I— though, you know, when I was 14, I probably would have done the same thing.

Yeah. Um, I mean, now he looked angry when he was leaving the house a couple times where I'm like, do you want your coat?

No.

I'm like, okay. Have a good time.

No, because when I mean, when I was his age, I mean, I couldn't get cold ever. Yeah, I would just be warm no matter where I went. And I was also the metabolism, the growing, the body's doing changes there where you're growing both vertically and horizontally. Yep. That there's a lot of energy being burned for that.

I would say so. Well, and I mean, at the same time, his dad shovels the driveway and shorts and flip-flops and a sleeveless shirt. I'm like, this is— and everyone messages me and says he's going to have a heart attack. And I'm like, well, he's insured and it's his choice. So I don't know what to tell you.

It's like you're talking to him about— he's like an antique car. It's insured.

We're good.

We're good. I got the good insurance on it. We're fine. No problem.

He does what he does.

No problem. Just drive it. Enjoy it. Oh, wow. It's interesting because everyone talks about innovation.

Yeah.

And in so many businesses, I know you've seen it. I know you've done it. I've seen it. I've done it. It is— it's not innovating. It's just changing stuff for the sake of change. Yeah. The board piece that you've mentioned. You see in many cases what could be, what would be. Like, you're like, oh my gosh, in 10 years? And then I'm trying to look like— it's funny in working people, working with people like you, you're like, we're going to go here in 10 years. And then I'm like, how in the hell am I supposed to make this happen?

I'm trying to live through 10 minutes.

Yeah, correct. So what we're going to talk about in a lot of this is how to move from— and I love, like, I love when I wrote this down, random acts of innovation? Yeah, the guilt in your voice was palpable.

I've done it.

Yeah, yeah. This is not an AA meeting for innovators, but yeah, how do you go from random acts of innovation to an actual, a systematic approach that's going to provide— imagine this— a return on investment for that innovation? And then my big piece to that is like, how do we isolate success from market noise from those types of things. I— in the time that I'd known you, you're always thinking of something. Yeah, you're— it's just, it's innate to you, it's inherent, whatever I-word you want to use there. Um, you're a natural innovator. There's people like me who are on the far end of that spectrum that— less visionary, or possibly more grounded may be the, the way to put it, as like I firmly like bolted in concrete shoes to the ground, um, in the day-to-day operations. So what are some practical ways to look for, like, opportunities that, that you feel like you can innovate without feeling like, hey, I had a dream, I want to do this.

So you're not just making things up, right?

So you're not just, I pooped an idea, okay, and we're going to totally change your company because of it. How do you avoid that?

Couple things. First, I love that you're like, you're a natural innovator. I have never thought of myself that way, but I think I can see why you would say that. I think that if you're a business owner and you don't think you're good at innovation or you don't think you have the ability to think bigger, first get coaching around it. Cuz that's what I did to help me move in that way. Cuz I lived very heavily in operations for a long time and then moved into that visionary space and I've had to stretch that muscle. So give yourself permission and give yourself a little grace around, you know, innovation. I think, innovation in a lot of ways, especially in the last few years, it's been overcomplicated. We talk about innovation and disruption. So like people hear innovation and they think they have to invent something brand new. It has to be earth-shattering. It has to move the needle. It has to find mass alignment. It has to disrupt the industry, whatever.

And they're going to build the airplane in the air.

Exactly. No, everything is not a million-dollar idea. So like, don't be hard on yourself. You know, million-dollar ideas don't just— they don't just magically happen. All right? They don't appear while we're meditating. Okay?

But that's what happened to my Instagram influencers.

I know, and that's why they're an Instagram influencer and they're not sitting here talking to you. All right? You know, it doesn't magically appear during meditation. It's just, that's not how innovation happens. So give yourself permission to be practical. I think that we have to be practical when we're talking about innovation. So I have 3 Fs for practical innovation. Yes, they're Fs. Stop it, not that one. Friction, fix, and forward. All right? So friction, find what's frustrating. All right, so you're going to start with friction. Innovation doesn't start with imagination. It really starts with that irritation. So here's where you're going to ask yourself, you know, where is the work slow, confusing? Where is it duplicated? Where is it really frustrating? Because every friction point is a signal that something can be improved. So ask yourself or your team asking like, What are the things that they're constantly complaining about? What is dragging them down? What in the industry is leading or lagging? I mean, I am all for stealing people's ideas. I do it all the time. So think about too, what are other industries doing that might track for you? What's the thing that's keeping you up at night? I think sometimes you see me as doing a lot of things in innovation. Some of it's just to like belay my paranoia. I live in a very, like, risk-centric space.

I know you do. I know you do.

We are always trying to figure out how do we solve it and do these things.

Yeah. No, but what's funny is, is in just seeing that, that the, those, that slow, confusing, duplicated, frustrating thing, that's something I see you working with all the time.

All the time.

Yeah.

Yeah. So we've got the, we've got the Frustrating part, finding the friction. All right, the next one is fixing, and that is solving something small. So you found the thing and now you're going to fix something small. Innovation doesn't always have to be big. I think we put way too much pressure on ourselves. Most of the time innovation's really small. It's here, let's move this a quarter to the left or a quarter to the right. Let's change the phone call cadence. Let's change the way that we do this implementation from emailing a questionnaire to, you know what, we're going to do an in-person meeting first, then we're going to follow up with a questionnaire. I mean, It just has to be better. It doesn't have to be like groundbreaking and earth-shattering. And I will say too, if you start small, it's way easier to keep that innovation momentum going. Most innovation is really just about eliminating unnecessary effort. So that's the second one. Fix, solve something small.

I dig that one. Yeah, there's— I mean, because it's one of those things too, where as I look through my business, I'm like, oh, there's that piece and there's that piece and there's that piece we don't need. The big new thing.

Yeah.

We need to fix the things that we already have.

Yes, it's fixing. And then the third one is forward, and that's moving it forward. So better, not perfect, faster, not flawless. Okay.

Ooh.

One step at a time. Because I think a lot of times as entrepreneurs, we're like, it's gotta be perfect before I do it. And it's like, no, that's not how it works. Innovation is momentum. It's not magical. It's really just one step at a time. If you wanna innovate, Stop trying to invent and start trying to improve. Right? For the love of God, if it's running great, don't break it. I think often we're like, innovation, we're gonna break it. It's like, no, we don't wanna break it. We wanna make sure that it's running smoothly. So don't just break something for the sake of breaking it for innovation's sake. There is a difference between being consistent and box-checking innovation. Like nobody needed New Coke. I'm gonna say it now. That was innovation for the sake of innovation's sake.

It 100% was. That is an amazing example of that. Yeah.

Don't be New Coke.

Wow! Yeah, I love that example. Love that example! New and improved!

It was not. It was terrible, and people hate it. There's a very small fraction of people, and they're wrong.

When you're looking at stuff like that, how do you know what is— especially as entrepreneurs, It's easy to get distracted.

Yeah.

And we're like, oh, shiny object.

Always.

Look at the new thing. And I mean, I still see so many people adopting AI on that basis. Oh, we're going to adopt AI. Well, are you? Are you just— I mean, you like, are you adopting it to use it? Are you adopting it to take care of it?

Yes.

So how do you look between what's the distraction and what's something that's actually a true innovation for your business when you're, when you're looking at like that visionary piece of it? Your culture isn't what's printed on a poster in your lobby. It's what your team does when you aren't in the room.

And for larger organizations, that culture is usually the first thing to fracture during high growth. If your mission statement feels like a ghost town, you have a culture problem.

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Book us for your next event, conference, or team meeting at businessfixpodcast.com. Well, I just lost all my notes, which makes me scared. We're going to innovate now.

Do you want mine?

No, I'm good. I would say this is really where, you know, you have to be disciplined and not just creative. Oh yeah. So this is, I mean, I've had a lot of ideas that were really exciting in the moment and I had planned, I had all these dreams and visions around it and it's just, it's not, it's not the thing. Again, I lost it. So here's what I'm gonna say. As I find my notes again, I don't know why my computer's having a seizure. I'm trying not to touch it. Here's some questions that I'm gonna ask myself. There's actually 3 of them. So the first one is, you know, Are we solving the problem that we actually have?

Sure.

So is it some— or is it just something that sounds interesting?

Yeah. Are we solving or are we just like, oh, what's over here?

Yeah, because innovation should reduce that friction again, not just create excitement. So most entrepreneurs and founders are really good at shiny objects. They have to have self-awareness around this. I know I have self-awareness around the fact that I have shiny object syndrome. So it's really important that we ask the question, is this solving a problem we actually have? The second And I think this is more important than the first is, does it align with where we're going? Because if it pulls us in a completely new direction, it might be a different business. It's not necessarily innovation. So if I go to my team at AUI and I'm like, look, we do employee benefits, we do health insurance, we do anything that has to do with your body. We're going to start selling inspirational bracelets, I think they would look at me and go, how does that align with employee benefits and taking care of the people that run companies? I don't know. Bracelets are cool. Make them feel good. Like, that is not an idea that aligns.

Knowing some of your team, I can imagine the look that they would give you.

Oh, seriously. And the responses that they would say. They're like, no, no, no, no, no. That's not going to happen.

So You would be hauled out in a white coat.

Exactly.

With very long sleeves.

Exactly. Exactly. So you've got to test your visions. You usually do it more than once. You share it with other people and don't fall in love with it too hard until you've had some feedback. So that's like, so second, does it align with where we're going? The third question, and this is where the team comes in, is at what, what does it cost the team to pursue it? At what cost are you going to innovate? Okay. Time, focus, and energy. Those are real resources. And if I'm adding something new to our organization, I need to be just as clear about what we're taking off of our plate as what we are putting on our plate. So we're adding AI adoption and innovation. How is it going to make what we do more efficient? How are we going to use it in a way that truly impacts our jobs? If I'm like, we're going to add AI because it's going to make all of our emails sound really flowy and we'll be able to, to write marketing content. Well, there's only one person in our organization who writes marketing content. Not everybody else needs to do the same thing. So You have to make sure that you're giving things to them for the right way. So for me, the difference is simple when we're talking about innovation and when it feels like disruption versus progress. True innovation makes the work better, clearer, faster. It improves. A distraction just makes the list longer. So that's really what you've got to ask when you're thinking that third question about that great idea is, what is it going to do to my team? What is it going to disrupt?

[Speaker:BRIAN KENNY] When you mentioned— it threw me back to something. When you said the solving a problem we actually have or something that sounds interesting. It made me realize something. You know why we typically hear the word innovation?

Why?

Shareholders. Haha.

Yes.

That is—

or board members.

Shareholders, board members. It makes those people happy. The word innovation makes those people happy. It's going to make your employees angry.

Yeah.

Yeah.

I mean, I sit on a board where innovation is one of the end statements that we have. And it's probably the most complicated one that we have to lead around because to have innovation also means that you have failure. And when you have a lot of high performers, especially when we're talking about government, because this is a government organization, there's a ton of fear around, well, what happens if we fail? Then we have to be— we have to answer to voters. We have to answer to— this is why it takes so long for things to innovate in certain fields.

Makes sense. From a leadership standpoint, how do you encourage that team of doers to bring the innovative ideas to the table with— and I'm gonna stretch this question a little bit.

Yeah.

So they don't feel like— first off, we want people to bring ideas. We also don't want them to feel like, hey, if I give Chrissy an idea, I'm suddenly gonna have more work. And B, how do we also make it so that way they're encouraged to do it without that fear of failure in there?

Yeah.

So like the combination of that, because there's doers once again, they want to do the things.

Yeah.

But sometimes they feel like they're already doing too many things.

Yeah.

How do they feel like— how do you make sure that they don't feel like in bringing you the thing, I've just signed myself up for another part-time job for free?

I have an idea how I can make this better. So yeah, I will say this. Doers don't resist innovation. They resist feeling overwhelmed.

Ooh, I like that.

So if every new idea gets met with, "Great, now go build that too," they're going to stop bringing you ideas pretty quickly. So as the leader, your job is to help the team filter through all of the ideas and find the right ideas to pursue. And when they come to you with an idea, it's a beginning of a dialogue. And so what I try to do with our team is to connect the innovation directly to the work that they're already doing. So if something is frustrating, repetitive, or inefficient, that's where ideas should come from. Again, we going back to those 3 Fs. That way innovation feels like it's relief and not extra responsibility. So it's really about connecting everything to them. And then the second piece I would say too is how leaders respond. It's how you respond as the leader to them. So if someone is bringing you an idea and you automatically dismiss it, you pick it apart, or you ignore it, you have just trained them to stay quiet.

Yeah.

If you want people to tell, to bring you the things, you have to be accepting of the things. Even if it's not something that will work, you still say thank you.

Oh, 100%.

So even if the idea isn't right, the response has to reinforce that speaking up is valued. So that's why we always continue to say thank you. No matter what you think, always say thank you. I had this conversation with someone last week and they're like, I really want my people to send me ideas, but I think they're dumb. And I'm like, I don't care. You have to say thank you. Because eventually you're gonna get a good one.

Yes.

Yeah.

Encourage the ideas. Yes.

It is. And then that third piece is follow-through. Yeah. So if we do decide to move forward with an idea, we have to be clear about priorities. And that is, you know, what gets paused? 'Cause we cannot do all the things plus 10 new things. All right? What gets paused? What is the prioritization? So what shifts? Because if nothing changes, we're just stacking work on top of people. And prioritization of innovation and strategic projects is probably I would say one of the most important parts of the job of top leadership in an organization, especially when you're the business owner. Your job is to prioritize. If you want to be a workaholic, fine, but do not make your team do the same things that you do. And I would say too, you know, the healthiest teams, they don't always have more ideas. They have better pathways to turning the right ideas into action. It's really not about how many ideas we have. It's how well we implement the one good idea. So the goal isn't to get more ideas. It's really to create the environment where people believe in their ideas and that they believe those ideas will actually make the work better.

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I'll give you a few seconds to go to the website while we get ready to get back to the show. I have an interesting perspective on the way you've presented innovation like this.

Yes.

The Porsche 911.

Yes.

If you look at it from year to year over the generations, it is an evolution. It is gradually changed. Now granted, if you look at a 2026 compared with a 1972, they look very different. The overall shape is the same. But if you look at it, it is a step function. When you look at something like the Corvette, The current version, there's nothing in common with the last version.

Yeah.

Innovation done correctly in a small business is like a Porsche 911.

Yes.

It's this constant evolution of making things better. And you can have something that's holy cow amazing if you do that consistently. Yeah. You don't need to go back to the drawing board every single time and be like, look at how innovative this is.

Yes. Well, I think the other part too, especially in small business, we have to understand that innovation and transformation, they're kind of programming partners. But innovation has the ability to be extremely disruptive, especially to your revenue. And as a small business owner, you can't always afford to go from $3 million in revenue to $500,000 in revenue and like be able to feed yourself and your whole team. You have to, you have to take those incremental shifts. So if you decide that you're going to move in a different, niche within what you're doing. You're going to niche up, you're going to niche down, and you're maybe doing something that is different from the majority of your competition. Sometimes it's really important that you go slow. You know, we talk about, you know, we go slow so we can then go fast to speed up. It's like you've got to start. So very similar to— I couldn't agree with you more.

Yeah, it's that— it's start walking, walk faster, walk a little faster, walk a little faster, then you can start to run. Then yeah, no, great, great way to look at it.

And we've done that in our business specifically. I mean, we niched in a different way in benefits than, not the, than 98% of our competition. And so I think if they would have realized that we were doing that, I think it could have, it could have looked very differently. But now we've been able to set ourselves apart in part because we took time and did those 2mm shifts over a 10-year period.

No, makes 100% sense. Love it.

So Josh, you often see businesses innovate but fail to see any real improvement. So let's talk about operationalizing innovation. So why does operationalizing the innovation matter so much? And how do you know if it's actually worked?

This is, this is my favorite piece to this because it is not like innovation in so many cases is treated like a vibe.

Oh, it is.

We're so innovative here.

Can you feel the innovation? Right. No, I cannot.

That's what they said at WeWork. Uh-huh. Um, so too many, too many businesses treat it as a vibe rather than a piece of the machine.

Yeah.

So the way that I look at it is, is like, first off, the, the result without a road map. Um, where the hell are we going and why the hell are we going there? Um, I get on the motorcycle and occasionally ride out to just randomness, but I realized I didn't accomplish much there. If I actually want to go someplace, I need to figure out where I'm going to go and how I'm going to get there. So So what happens is, is I see, and I've seen this too, is people want to innovate. And then when they start the process of it, they end up 15, 20 degrees off from where they wanted to go to. Part of that is, is they look at symptom versus cause. And this is what I always like to say is like, increased revenue is just a symptom. It's not the cause because every innovation we're like, we're going to increase revenue.

Revenue?

Whoa, whoa, whoa. How?

Not every innovation increases revenue. Newsflash, in case you—

Right, right, right. I'm just going to pull up my magic wand and ding! Yeah, I mean, so to me, it's kind of like saying, I enjoy working out. I want to put on more— I want muscles. I get it. Which muscles? Where? What am I doing? I do not need bigger glutes or bigger quads. Um, so I probably not going to do a whole heck of a lot of squats. Um, it's figuring out what I do and don't need to make sure I'm innovating in the right way. This is where this is going to come back to the— if you do not have a baseline, you've got zero things to compare it to.

Yeah.

And this is like— this is what drives me absolutely insane is people like, we're going to change how we do this, and they don't have an SOP for it to begin with. Um, well, if you didn't have a standard procedure for it, like, it's not innovation, it's documenting, right? You're not even documenting. You're, you're, you're saying you're changing something that wasn't real to begin with. Okay. Um, it, like, it, it, if it's a brand new concept, you, you, first off, you have to have a process to start with that you can deviate from. Without a documented process from the jump, you aren't innovating. You're just doing a one-off task that probably can't be repeated, replicated, or taught to anyone else. Like when the person that's doing it gets hit by a bus and the next person comes in. Well, they did.

They just do the thing.

Just do the thing. The thing's good. Do the thing the same way they did the thing. And we're great. We're awesome. The other piece is, is accounting for the change. So if the innovation is a change to a current process, you have to document exactly what was removed, added, or modified. If you don't account for that delta, you have no way of knowing what specific lever caused the improvement. And to me, innovation isn't done until it's a documented step in the workflow. And the accounting for the change is just one of those things where This is building that foundation.

Yeah.

Because next up, we have to make sure we isolate the results. Have you ever heard double-blind taste tests and all these other things?

Yes.

Right. They are isolating for variables there. If you change 5 things at once that all point to the same marker, what one worked? What one? I mean, you could have one that gave you a 20% gain and another one that gave you a 15% loss. And you're like, hey, we did 5% better.

You only change all the things when you're in abject failure. Yes, that's it. That's like, that is, that is when you're in— that's crisis, right?

Right.

In crisis, we don't care as long as it worked. But most times we're not in crisis.

It's so funny. I'm going to give another mechanical thing here, like with the motorcycle. So if you put on new tires, you changed the springs in the suspension, you adjusted compression, you adjusted rebound, and, hey, you know what, I put new handlebars on and now my motorcycle handles weird. What did it? Which, which one? You haven't the foggiest idea. You have— so change one thing at a time as a step function so that way you know what, what triggered what to actually happen. In that, you have to have some expectations of what is going to happen. You know that— I mean, if I'm walking into a shitstorm, I want to know which way the wind's blowing. What are the expected results? What are the possible results? And what are the specific variables that you're tracking up front? And what are some of the other ones that you're going to be looking at also? Because realize that you want to look at result X, result Y, and result Z, but you don't want— you want to make sure that it doesn't take variable T and cripple it. Yeah. Those are the things that you have to look at. The example that I love to give that is the, uh, Rory Sutherland always talks about this, the doorman fallacy. Um, hotels get consultants to come in and they'd be like, ah, you're spending $60,000 a year on a doorman. And, uh, they're like, replace them with an automatic door for $40,000. And then they're like, great. And things go by, and for about a year they're fine. A year and a half later, they're like, why are there homeless people in Lobby. Why have our top customers left? Because they're not being greeted at the door anymore. There's, there's those types of things. You have to look at those secondary variables, like how is this innovation going to affect things down the line? Ah, next up, the project versus the environment. Yeah, this is why separating these things, because let's say you've got, I mean, you had a, just a gangbuster idea, an amazing idea, and you had that in 2008. Was the idea failure, or was the fact that—

yeah, we're gonna disrupt the real estate market. Not right now, you're not. It's like, we're going to be innovative with the Affordable Care Act. Not until we figure out what's in it. So yeah, right.

So yeah, to me, there's that— there's the efficiency versus the revenue gap. Yeah, revenue is a lagging indicator, and people will innovate this week, and next week, like, how's revenue? Uh, it didn't change. What, is this a failure? No, it's a lagging indicator. Um, and there's so There's so many other things that can be tied to it. Inflation, interest rates, seasonal shifts. If you're a pool company and you try something new in the winter, nyeh.

Yes! I will say that, too, perspective around innovation in a legacy or existing business vs. a startup. Let's not compare ourselves to the large startups that still haven't turned a profit, but yet have these multibillion-dollar valuations. OK?

Are you calling out AI companies?

I'm not calling out AI companies. I am not. I'm not. But I'm just saying there are certain companies that have not been revenue positive ever that are multimillion or billion-dollar valuations, and we are comparing ourselves to them. No one listening to this— I mean, maybe, I would venture to say— none of you are Nvidia. None of you are OpenAI. No one is Anthropic. Just stop comparing yourselves and thinking you have to innovate that way. You do not. No. That's how you wind up homeless.

Correct.

And bankrupt.

Because it's funny, I had a conversation with someone about this the other day. All people really see on social media are the business wins.

Yes.

My running joke about it was, is, and it's weird, like if you look at my Instagram, it's talking about podcasting and stuff like that. When I woke up at 2:00 in the morning sweating and crying the other day, I didn't take a selfie and was like, "Entrepreneurship life." No.

But I'm having a panic attack. I mean, and that's it. The other part is, I mean, I know, I mean, Josh, most of my competitors, there are very small competitors. We're in a weird space. There are small competitors like one person, and then I compete against billion-dollar organizations that are owned by like the Canadian pension fund. I can't compete against those people in a lot of different ways when it comes to how they innovate versus how I innovate. You have to be willing to have that perspective and give yourself some grace. So I love that we're talking about how to operationalize some of these things, but just like for those of you who are like having that panic attack right now around what can I do, I don't know if I can do it, you absolutely can. Stop trying to be what you're not. Okay? I know I'm not Jensen Huang or Sam Altman or anybody else in the, in the insurance space. I am not an FP or Assured Partners. I can't be those people. No, we have to be a UI. We have to be clarity HR. I am not ADP.

You know, I would never want to be, but no, I don't think, I don't think you'd fit there.

No, but it's just you've got to give yourself some grace around this.

100%. And that's, I mean, to me too, that's why I like the Porsche example.

Yes.

Of it's, it's a step function incremental every single time.

Compete against yourself.

Yes. The other thing, when we talk about like the environment that people are looking at, they're looking at these, like you said, these macro environments.

Yes.

Most of us, as you said, are not competing in that. So realize if your market shrinks by 10% and you've maintained 100% of your revenue, pat yourself on the back.

Exactly.

That's, that's a hell of a win.

If you've been able to pull it all together with your own banking and working on your own relationships and maybe you've had to take a few investors on. I mean, we're not— I can't raise money like Elon. No, I don't want to. It's okay.

Yeah, yeah, I think you're okay with it. I didn't see you bring— walk in here with the kitchen sink.

I did not.

Or bathroom sink or whatever it was. I realized though, in so many cases, if you balance things and you come out a little bit ahead when the market crashed, you still— like, a failure to grow is not a failure of innovation. And the problem is, is you do not know that unless you've isolated those levers and those variables.

Yeah.

This is where, like, the scientific testing comes in. Like, you cannot have 10 variables, and it's tough to control for that, but you need to minimize the variables so you know what the levers that you are pulling are the correct ones and what the response is to that. Metrics like customer acquisition cost, time per unit, things of that nature. Those are the ones, that's how you're going to measure that innovation.

And it keeps you alive.

Correct.

In a down year.

Correct. The other stuff is going to work. I mean, if your time per unit closes or it shrinks a little bit, so you're faster and you have the same quality, guess what? That's a win. It may not show in certain numbers. There's other things that could play into that. Like I said, 2008, you may have— you could have efficiency'd yourself to hell and not made any more money. No, because there were some outside things with that. Um, the last thing, uh, kind of that I want to talk about with that is the foundation versus the balcony. Is we've— like, you made the example before a few episodes ago about that, um, you're adding a fancy balcony to a crappy foundation house. Yes, I love that.

We don't decorate our dysfunction, right?

Right. I mean, Are, like, with this innovation, are you, are you doing something that's foundationally good?

Yeah.

Or are you doing something that's, once again, it's this flashy external features. And I mean, it's all, it's the new marketing slogans, the prettier websites, the— I love it when people like viral social trends. Like, no, um, if your backend machine, like the fulfillment, the billing SOPs are broken, none of that stuff matters. Make sure that you are strengthening, strengthening, strengthening the base. True innovation. I love this piece. True innovation improves the unsexy parts of the business.

Yes.

Everyone hears innovation like, ooh, ah, no, oh no, it's the boring part.

Most innovation people don't even see.

No, no. Yes. If you can reduce the, reduce the error rate, if you can shorten the communication loop, if you can make sales and sales better, if you can automate something, oh my gosh, yes. Those are the— like, it's, it's kind of like finding the nerdy girl hot.

Concur.

Everything, like, every innovation adds weight to a business. Yeah, you've got to make sure foundationally you're ready for that. Um, the other— the only other thing that I want to say, that if you do have a new feature or something like that, that you've, that you've innovated, test it.

New Coke, correct. If they'd have tested it, they'd have known.

Some people are like, look at the new feature, they roll it out. That's why websites have beta testers. That's why there's, there's so many things where I see it, where people like, hey, we've got this wonderful new flashy thing, and then you put it out into the world and it's broken.

Why didn't anybody like it? Because you didn't ask them, right?

Or the user interface is horrible.

Yeah.

Take Meta's business user interface, for instance.

I don't want to talk about it. It causes so many headaches in my office.

Yes, yes, yes, yes. That being said, to me, how much time should— and I know this is going to vary, but you're going to have a framework, I'm assuming, for this. How much time should you give to shiny objects?

Oh, it needs a budget. And it needs a budget in time and money, but really in time and attention because you've got to make sure that you've got guardrails around things. I mean, you talked about it in testing. So I would say healthy organization sets aside small defined percentage of time or resources for testing. Not everything's a priority and not everything deserves to be pursued. And I would say, if you're like, Chrissy Myers, I need a number, I would say it's less than 10%.

Oh yeah.

Unless you're in crisis. If you're in crisis, that's a little bit different. But that's a different conversation, a different podcast.

And I don't need it. I like— I don't feel as strongly about a number on it as I do.

Just like from a time perspective, it should be set something aside.

Yeah. Put, put— give this a, hey, we're going to do this this long and then make a decision.

Well, and I would say it's— there's 3 questions. If you can't answer these 3 questions, you're not innovating. You're experimenting at your team's expense. These 3 questions are what problem are we solving? What will we stop doing if this works? And how are we going to measure whether it actually helped? You have to have those 3 questions in that budget.

I want to add in a timeline to it, though, because in so many cases, there's so many people like, "Just a little more time." No, no, no.

We say the same thing about people and culture. "Oh, let's just keep them." You're not Jesus. You can't save everyone. There has to be a time of death.

Just a little more time. I think this is going to work with some of the things some more time.

No.

Are you changing anything? No, it just needs more time. No, it doesn't.

It doesn't. It needs to die, right?

But pick a time when you're going to talk about like, hey, is this— I mean, do we, do we do CPR? Is this on hospice? Or are we just taking it out back and shooting it? Yeah. You have to pick a day and a time when you're going to be like, this is what's— this is a decision.

Yes. And if your team is not capable of doing that, it is your job as the CEO or the business owner or the leader to pick that time for them. Sometimes you have to tell them when it's time to take Old Yeller out. You gotta do it.

Sometimes the chief surgeon has to step in the room and be like, "Time of death." Time of death.

What are we calling this? Or be willing to even ask the question, "How much longer are we gonna pursue this?" I mean, if you don't wanna give the— if you wanna make sure that your people have autonomy, a simple question is, "how much more time are we going to dedicate to this issue?" And if they're like, "We don't know," you're going to say, "Two days." The way you said that, when you said, "How much more time are we going to pursue this?" Do you think that's happened in our organization?

The way you said that made me feel like yesterday was too much.

Sometimes you have to say it that way.

That wasn't a question, was it?

No, it wasn't.

That definitely was. How much more time are we going to spend to produce pursuing this? Nope, not a question.

Okay, good. What are we going to pursue next?

Just close the computer and walk out of the room. Just coolly, calmly walk out of the room. Right? Once again, call it, doc. Key takeaways for today. Yeah. Isolate the variables. If you're trying something new, don't change anything else for 30 days. If you need to pull on multiple levers, if you're in crisis mode, sure. But beyond that, if you're trying something new, try that thing new in isolation to make sure what it is doing.

Innovation doesn't always have to be groundbreaking. You can easily start by just asking, "What's the friction in the business?" Oh, yes, definitely.

Define what success looks like upfront. Now it can pivot a little bit, but you got to figure out what you're trying to do before you do it.

Yeah.

Where do you want to go before you get there?

Yeah. And I would say you should not be the only innovator in your business. Everyone should have capacity for improvement.

Oh, I like that. Yeah.

It doesn't just rest on the business owner's shoulders.

No.

Shouldn't. No, it definitely shouldn't, especially because you're not supposed to be doing all the things. If you are, that's another episode.

And to me, the why in the SOP, um, when you add innovation to the manual, include why so the team understands the ROI for them.

Exactly.

It can't just be, I'm trying to Scrooge McDuck. Yeah, um, I'm gonna go into my bank vault out back and dive into my coins.

Yeah, you want success, tell them why.

Correct. Correct. Quick shot. Is AI the ultimate innovation or the ultimate operational distraction?

So it's innovation when you marry it to a change management framework and you give your people guardrails, permission to play, and you have to have dialogue around its purpose. It is an absolute distraction if you don't do those things.

Wholeheartedly agree. If You have to have a specific purpose outlined. If you do not have a specific purpose outlined, they have a friend.

Yeah.

Your workers now have a friend.

Yeah. Who is the best person in a 10-person company to be the chief innovation officer?

Yes. Everyone. And I mean, even to me, even in larger organizations, still, yes.

Completely agree.

Yeah. Everyone should have the power to innovate. Now, not everyone should be the one pulling all the levers. But at least to start that process, yes.

Yeah. If you really want a CIO, they're doing project management and project selection. But you got to be bigger than 10 people.

Yes.

I would argue even 100 people.

Correct. I wholeheartedly agree with that. So what's a piece of old tech that's actually more innovative than the new version?

Human relationships.

I wholeheartedly agree. And I think it's because we haven't done them as well.

No.

How's it going, Bob? And that's been for decades. Yeah, that's kind of meaningless. It's— once again, I know I talked about this before. It's why I love my question. What's something you're excited about this week? Now you're actually learning people. Yeah, we've innovated.

Yeah. We have.

That being said, thank you for coming along and innovating with both of us. Uh, businessfixpodcast.com, make sure to go there, check it out. Please leave us comments, let— leave suggestions on your favorite podcasting platform.

Tell us how to innovate.

Yes, tell us how to innovate. Tell us where we're wrong. We'd love to— I'm actually excited to hear about that.

Anybody likes New Coke? Yeah, it's funny. We're gonna find the one person, right?

I'm gonna get Chrissy a new Coke here for, for a couple of podcast episodes. The next episode, the difference between trust and blind faith, because that is something that is difficult to try and establish in many cases. Do us a favor, take care of yourself. If you can, take care of someone else too. We will see you very, very soon.

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