In the first week of September 2023, I was honoured to be invited a ceremony in Ljubljana to unveil a plaque to commemorate the visit of Lord Nelson and Emma Hamilton to Hotel Slon in 1800. The visit was organised by the Nelson Society, the British Slovene Society and the British Embassy. Here was the speech that I made: 

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“… Because its purpose is to create a customer, the business has two — and only two — functions … Marketing and Innovation. Marketing and innovation produce results, all the rest are costs …” — Peter Drucker

The ability to develop and launch new products and services is critical for the long-term future of any business, yet 90% of new developments result in commercial failure. This article discusses some of the issues with innovation and highlights proven processes that ensure every launch is a winner. Topics covered are:

• Why you shouldn’t listen to the Voice of the Customer
• The search for Six-Sigma Innovation
• How to identify Innovation Hot-spots
• On-Demand Concept Generation

The Importance of Innovation

The creativity and inventiveness of people is a vital ingredient for any business. However, it is only through innovation, the implementation and exploitation of their ideas that a business is able to compete and prosper.

Already, the competitive landscape has significantly changed with globalisation. Now appearing are many new competitors from low-wage, dynamic economies. For instance, China has given birth to some 50 automakers, such as Geely, Chery, Great Wall Motors and Brilliance. Who knows which of these fledgeling car companies will become the global giants of the future? Staying competitive will require a step-change in innovation performance.

As Peter Drucker points out, the two key activities within any business are Marketing and Innovation. Marketing allows the identification and understanding of suitable hungry markets. Innovation allows the fulfilment of the market’s need in some unique way that customers value greatly. Without marketing, there is no customer pull. Without innovation, the proposition is copied or disrupted by competitors. In the longer-term companies that don’t innovate die.

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Recently, I was leafing through an old course on six-sigma problem solving which was a staggering 250 PowerPoint slides. The course was structured around the six Sigma terms Define, Measure, Analyse, Improve and Control.

Nothing wrong with that, but it occurred to me that you do not know whether or not you have learnt the course material until you have gone through the full D.M.A.I.C. cycle. Now here was a problem, the way the course was structured, when the teacher taught the define section, he took you through 32 different techniques for defining a problem.

Next with measure, there were 40 different techniques and so it went on through the whole cycle. The 250 slides, took you through hundreds of different techniques in a linear sequence before you closed the loop and solved your first problem. Remember learning feedback does not happen until you solve a problem.

So my question is why can’t trainers teach you the minimum to close the loop and then focus on feedback when you solve your first problem? It would be nice, to learn the most common technique for defining a problem, the most common technique for analysing a problem, the most common technique for improving a problem and then the one most common technique for controlling the solution to the problem. Ta da, you have your first solution, you have some feedback and if the solution is not very good the trainer can introduce you to another more advanced technique within the problem-solving cycle that will enhance the solution.

Fractal Learning Definition

And so, I have coined the term fractal learning that describes a learning process where you learn the minimum to close the course-correction loop so that you can assess the quality of the solution to identify gaps in your learning. This sounds like a much better way to learn than a trainer stuffing your head full with hundreds of techniques before you see any real-world results.

It turns out, that this approach is ideal for business training where you naturally have a business process with a feedback loop in terms of financial results. Imagine, a training approach, where you take a business process, learn an improvement technique and see the profits soar before you learn anything else. It’s a very lean approach and I thought it was original before I came across this TED talk by Josh Kaufmann.

The first 20 hours — how to learn anything | Josh Kaufman | TEDxCSU

The video is brilliant and the referenced “Axis of Awesome” video is at the bottom of this page. So just to recap, the key steps in Fractal Learning are:

1. Deconstruct the skill that you are trying to learn
2. Learn enough to get into a self-correction loop
3. Remove barriers to practice
4. Introduce more advanced techniques each time you cycle through, based on the feedback

You will quickly move from unconscious incompetence to competence as you practice and get the results. The business course-correction process could look like the business loop in the diagram.

A. Attract Leads – First, do the minimum to attract some leads. This could be advertising or going to a trade-show. Whichever makes most sense, but just learn one technique and move on.

B. Sell Offer – If someone shows interest, then practice one sales technique for making the sale. If that worked, you could try an up-sell to Enhance the Offer next time through.

C. Fulfill Offer – Developing a product is complex, if you don’t have any products, then offer a service instead or ship someone else’s product. Either way, get something in the box.

D. Collect Payment – Now collect the payment with the easiest payment taking technique. Perhaps use PayPal through an Internet Connection.

You see, it doesn’t have to be difficult. You just keep going round and round the loop making money and learning new techniques during each circuit. Many techniques won’t work, that’s fine. Effectively, you are building a business as you learn. However, you must have a test and measurement system in place to collect the feedback and to prove what works and what doesn’t.

If you like the video and want to learn how to improve your business, then this site is for you. Fractal Learning focuses on these business processes and learning the minimum before quickly turning your learning into action and getting the business results.

Axis of Awesome Act

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The trip to the airport was uneventful, just another beautiful day on the sunny Lemnos Island. We arrived at the airport and checked in our bags. I don’t think there were any other flights out that day. So the only people around were other fellow Neilson holiday adventurers.

We still had an hour or two to kill before going through to departures and so we settled down with some coffees and our friends Martin and Caroline to reminisce about the holiday. After a few drinks, I sauntered off to the toilet, it was still only 12.25 am, plenty of time before we needed to go through to departures. The toilets were clean and my mind was buzzing with the holiday… or was that the floor buzzing, at first I thought it was some kind of underground train.

I washed my hands and then noticed that the walls were moving too… Had the plane just crashed into the terminal?

I ran out into the main terminal where there was pandemonium, tiles were falling from the ceiling and people were running around in circles not knowing what to do. The walls were swaying and I panicked as soon as I saw where we were sitting. There was a pile of rubble over the chairs where Sue, Martin and Caroline had been sitting moments before. My crushed coffee cup was lying on the floor.

I looked out of the main entrance and the pillars were still swaying from side to side. I was worried about running the gauntlet underneath the concrete ceiling. Was Sue alright? I knew she had got out of the building, but had she been hit by the falling tiles. One woman was cradling her bleeding head! Not good.

And then I saw Sue and Caroline, shaken but safe in the car park. At last, the blue sky above and the tremors had stopped. A small aftershock and things were back to normal. I gather that Martin had scooped up some unsuspecting child as he rushed out the door. Now all the families were reunited as we baked in the sunshine for the next 3 hours. I skipped the morning sun cream ritual as I didn’t think I would be out in the open. Now I missed the sun cream as I burnt up in the car park.

They almost diverted our aircraft to Athens until they decided that the runway was safe for landing. The girl with the bleeding head, she had recovered too and it turned out that she lived just down the road from us back in England.

So what was the Richter scale of the earthquake. The U.S. Geological Survey initially reported a magnitude of 6.4, later revised to 6.9. If you look that up on the charts, they say it’s noteworthy! So imagine a real disaster.

Oh well, back safe and sound to Blighty.

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Is your business ready for the AI revolution?

I gave this talk at the Education Show at the Birmingham NEC back in 2014.

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Content rules the internet. Is your business creating your own content channel for building authority in your market?

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There are three major areas of risk in the product development process when it comes to developing new hi-tech products:

• Technology risk
• Management risk
• Market risk

We tend to dwell on the first two, because that is what you’re aware of on a day to day basis.

Will the technology work? Do you have good development and communication processes? Do you have the right people? is the project on track? and so on…

But by far the biggest area of risk is the third one — market risk. Think about it, you only really know if you’ve got a flop on your hand when you launch the new product into the market. By that stage, you’ve already spent all of the development budget.

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In this video Raglan Tribe shows you how to build an online innovation launch community for building market consensus behind your breakthrough new product launch.

If you’re trying to launch any new product breakthrough, new product category or new service then you’re going to have to win over the early majority of the market to get traction.

Geoffrey Moore calls it the process of “Crossing the Chasm”, creating a market beachhead or assembling the invasion force. But whatever you call it, customers are reticent to adopt new ways until they see other customers recommending your product or service.

With social media, blogs and great content, the Internet makes the whole launch process much easier.

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In April 2004, my consultancy company Mindsheet Ltd won a contract from Delphi Packard to help reorganise their sales and marketing team. Also, they wanted to make a stronger bridge between their marketing and engineering activities to achieve better influence with their key car company customers. In particular, they did not want their own product planning to be left behind as vehicle manufacturers moved more towards hybrid and electric vehicles. These trends have a huge impact on the vehicle connectors and power electronics.

The first week I interviewed all the key players across the division from which I diagnosed the main issues. Namely, that sales were organised by product line and territory and not by global account – therefore the car companies were running rings around them. The other issue was that sales and marketing didn’t do any marketing this was all done by engineering, who then kept their marketing strategy to themselves. The remedy was to transform the sales organisation into an account structure, work with each account team to create an account strategy and have representation from engineering within each team.

There were 10 key accounts, one for each car company and the account leader needed to come from the same territory as their home customer account. Furthermore, they wanted all the strategies to be presented within two months at a divisional growth workshop all with the same format and scorecard. I had to devise the format, train the account teams, be in each territory all at once and bring engineering to the party.

The contract lasted for two very intense months split between the US, China, France and Germany. The sales bookings quickly got back on track and were up to $1.2 billion for the year. However, the margin still needs improving and that is being addressed by the engineering strategy which is now in step with marketing.

The figure overleaf shows one of the tools that I developed for conducting this contract. It is a spreadsheet that helps develop a structured gap analysis between the Delphi offer and their competitors. Each account team completed this for their accounts and are now focused on the key areas for improvement.

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My first role was to resolve numerous field issues resulting from a previous disastrous product introduction programme in the late 90s. Next to ensure better quality development, I formed Group R&D by integrating all of the worldwide technical resources into a single project focussed team of 260 scientists, engineers & technicians operating from 6 sites across the US & Europe. The organisation was a matrix structure with key disciplines in one direction against projects and the divisional businesses in the other. The Currency division could now access engineering skills from Cash Systems and Global Services could access the chemistry skills from Currency. This obviously led to the cross-fertilisation of ideas and the creation of new products.

I also introduced best practise product development processes such as project phase reviews, technology road mapping, an R&D intranet and Intellectual Property management. The performance of this new organisation was then demonstrated by the successful development and launch of a wide range of new banking and retail cash handling products that exploited the opportunities from the Euro introduction and that contributed £57M of good margin (50%) sales to the Group within their first year of introduction. Also some multi-million government identity card contracts were fulfilled with a 40% margin enhancement (£8M out of £20M), many new anti-counterfeiting tools for banknote production were developed, 140 new patents were filed and £1M of license revenue was developed. I also supported the CEO with M&A work resulting in the acquisition of several medium-size businesses in the USA.

However, De La Rue had been in a boom-bust cycle for some time. In the early 1990s, the bonanza was due to the break-up of the Soviet Union when they benefited from a large number of lucrative banknote manufacturing contracts. During the aftermath, R&D was scrapped which resulted in a new product crisis by the late 90s. I was then recruited from the Automotive Industry to introduce better product development disciplines and design for manufacture.

During my time, the bonanza was the introduction of the Euro. Again, De La Rue wrongly portrayed this benefit as on-going rather than a one-off. And once again during the hangover period it was R&D that was scrapped. I failed to smooth the cycle and introduce a more measured and continuous approach to new product introductions, despite having ready access to the board and CEO. Hence after dismantling my own structure that had performed so well, I resigned.

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