Stephen Shapiro uses the Deep Water Horizon oil spill (April 20, 2010) as an opening anecdote to illustrate inefficiencies in common innovation practices. He contrasts the large volume of public input (about 123,000 submissions) with the tiny number of useful solutions ("less than a dozen"), framing this as an extreme example of a low signal-to-noise ratio. Shapiro argues organizations waste effort on low-value idea collection and urges clearer problem definition to accelerate innovation; he promotes his book Best Practices are Stupid, which offers 40 tips to innovate more effectively.
Questions this video answers
April 20, 2010.
87 days.
180 million gallons of crude oil.
Approximately 123,000 submissions.
40 tips.
Chapters
On April 20, 2010, something dominated the news in the United States and across the globe. Remember back to that date. That was the day that the Deep Water Horizon oil rig exploded. And over the course of the next 87 days, 180 million gallons of crude oil were spilled into the Gulf coast of the United States. Over the course of the three months, BP tried a number of different things to clean up the oil spill. And there was one thing that they tried to get suggestions, and that was to set up a website. On that website, what they did was they asked concerned citizens, scientists and movie stars to provide their input on ways in which we can stop the flow of the oil. Over the subsequent weeks, they received 100, 123,000. Now, on the surface, this sounds great. If you were running an innovation program and received 123,000 submissions, you'd be saying to yourself, this is excellent. We have people engaged, we have people concerned, we have people passionate. But of those 123,000 submissions, what percentage do you think added any value, had any chance of providing a solution? The answer is less than a dozen. Now, think about this for a moment. That means that 99.99% of the solutions submitted were duds. That means that 99.99% of THE TIME spent on thinking about and writing those submissions was a waste of time. It means that 99.99% of the time spent in evaluating those submissions was a waste of time. Now, obviously, this was a big catastrophe from an environmental perspective and from a PR perspective for bp. So clearly the investment in time, money and energy may have been worth it. However, my guess is that your organization does not have the luxury of an infinite amount of time, money or resources to solve your problems. So what you need to do is you need to start thinking about what is it that you can do to help accelerate the innovation process. And one key thing that I found is that companies tend not to use what I think is an extremely important measure, which is the signal to noise ratio. The signal to noise ratio is an engineering term that looks at the ratio between the signal, something that you want, and the noise, the thing that's corrupting it. So for those of you who are audiophiles and used to collect cassette tapes, for example, the signal was the music, the noise was the background hiss. In innovation, the signal are all of the great solutions that get implemented and create value for the organization. The noise is everything else. These are the bad ideas. These are the great ideas that for whatever reason, never got implemented, or these are the ideas that got implemented that ultimately did not create any commercial value. Most organizations have an extremely low signal to noise ratio, and the reason is that companies are running around working on things that don't matter. Albert Einstein reputedly said, if I had an hour to save the world, I would spend 59 minutes defining the problem, one minute finding solutions. From my experience, most organizations are running around spending 60 minutes working on things that just don't matter. So the opportunity for an organization is to improve the signal to noise ratio and to define the problems, challenges, or opportunities more clearly in a way that will accelerate the way that you do your innovation efforts. So there's a lot of things that companies do in the name of innovation that sound great on the surface, like asking people for ideas. But sometimes asking for ideas is a bad idea because trying to find those great ideas in the middle of all the duds is like finding a needle in a stack of other needles. It's a lot of work. The book Best Practices are Stupid will help any organization not just innovate, but innovate more efficiently. It will help you understand how to do it and who needs to be involved and will fundamentally change the way you think about your innovation efforts. Because the reality is, a lot of leaders in the name of innovation are doing a lot of excellent things that are unfortunately destroying innovation. So this counterintuitive book provides 40 tips on ways that your organization can innovate differently, innovate more effectively, and actually outpace and outlast the competition in today's fast game.
