353: Mastering change – with David Schonthal

Combatting the forces that pull customers away from your product, for product managers Today we are talking about a key challenge with product innovation—the change innovation necessitates. If there is no change, there is no innovation. Helping us understand change and how to properly navigate it in an organization is David Schonthal. He is an award-winning Professor of Innovation & Entrepreneurship at the Kellogg School of Management where he teaches courses on new venture creation, design thinking, innovation and creativity. He has also been a practitioner of entrepreneurship and innovation for over 20 years, including a decade working at design firm IDEO. Also, one of his early jobs was product manager at Arthur Andersen. Summary of some concepts discussed for product managers [2:39] Out of your many innovation projects, what’s one you’ve found especially interesting? I’m particularly interested in healthcare products because they’re complicated and their positive impact is unambiguous. One program, related to diabetes management, is a great example of design thinking and human-centered design. We recognized people tend to think about chronic diseases at the macro and functional level, e.g., blood sugar levels and HbA1C. When we used design thinking, we realized chronic disease is as much a social and emotional condition as it is a functional condition. The diabetes management programs we designed were about helping the entire person, not just managing the metrics associated with their disease. We aimed to help individuals achieve their goals in life. [5:40] Where did the title for your new book, The Human Element, come from? My co-author, Kellogg psychologist Loran Nordgren, and I wondered why some good ideas fail to get traction in the market. Often, innovators and marketers focus on the product, saying it is designed or priced wrong, but we found the human side of the equation often goes unnoticed. We don’t consider the reaction of individuals whom you are expecting to change to adopt your product. Our book focuses on the human element—the ability for humans to adopt the products we’re creating to benefit them. [8:14] What do you think about the tension in organizations between maximizing operations, which encourages consistency, and innovation, which brings change? In established organizations, there’s always the tension between running the core business efficiently and looking to future horizons for growth. Organizations tend to be optimized for the first part, not the second part. To manage both well, organizations need two speeds or modes, one speed focused on creating efficiency and repeatable, scalable processes, and one speed with an appetite for taking risks and a growth mindset. Organizations often say they want to innovate and take risks, but when the core business needs attention, they lose focus on innovation, leaving it without resources or attention. Managing this tension well has to start at the top of the organization, with leaders recognizing the need for these two modes of function. [13:02] Tell us about your framework for addressing change. We talk about the forces of fuel and friction. Fuel is what draws customers to a product, and it’s where most product managers and developers spend their time. It includes all the features and benefits that make a product desirable, the problem trying to be solved by the new innovation, marketing collateral, and all the tools in product developers and innovators’ toolboxes. Friction is the headwinds that stand in the way of customers’ implementing the change. We identify four headwinds: * Inertia—the resistance to move away from the status quo * Effort—the energy required to make a change; this can be physical or economic effort or ambiguity about how it will work * Emotion—the doubt, anxiety,