We often get asked what’s with this name "5 Tool Group and how did we come up with it?"  

Well, “Group” is obvious because we have a team that focuses on a methodology that helps companies succeed in the third phase of innovation which is --- often misunderstood or neglected, yet critical in increasing companies’ market valuation --- to take an innovation from early development to market adoption.  This is the black hole of innovation.  Most fail right here based on our experience working for and with high tech companies.  

We have seen companies that are very good in the first phase of innovation, which is to come up with great ideas. We have also seen companies are quite adept in the second phase of innovation, which is to take an idea and come up with an innovation, whether it is a product or a service. It is the third phase where companies quickly hit the proverbial wall.  The 5 Tool Methodology purpose is to accelerate bringing innovation to the market.

So where did we get “5 Tool” from? 

The “5 Tool” was taken from baseball where this term "5 tool player"  is  used  on rare occasion to describe a baseball player that is great at the five key attributes of baseball:

1) Hit for power
2) Hit for average
3) Field well
4) Throw well
5) Run fast

Players possessing these five skills are so rare and highly valued that very few players fall into this lofty category, such as Willie Mays, Ken Griffey Jr. and Alex Rodriguez. 

Using this analogy to innovation, we believe that if you want to be the Willie Mays' of Innovation like Steve Jobs. Elon Musk or Jeff Bezos, you need five essential tools of innovation for great success:

1) Sales
2) Marketing
3) Partnership
4) Customer Development
5) Agile/Lean Process

All of these have to be combined with strong business/finance focus. Unless you have all of these five tools well integrated, it is very difficult for a company to win the World Series in the innovation game and keep repeating like the way Apple has done it for so many years now.

Today you just can't compete with a stove pipe approach that has worked in the past.  The main reason is that innovation is driven from a bottom-up approach instead of a top-down approach.   Technology has a lot to do with it.  You have to modify your processes to create new business models and the only methodology that supports this new reality is 5 Tool Methodology.  

Let us know what you think based on what you are seeing or have experienced.  Let's work together to improve this. Send me an email at jay@5toolgroup.com. 

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The transformation of a business process, market offering, or business model to boost value and impact for the enterprise, customers, or partners.
-Forrester Research


One of the key skill needed to succeed in bringing innovation to market quickly is sales -- not traditional sales approach, but innovation sales approach.  No matter how innovative your product, solution or process is, it does not sell on its own.  You have to do it --- and do it well.  You not only have to be adept at selling to customers, but equally adept at selling to partners, investors, within company and over the social media.   Each of these are complicated since they all  have their own unique needs, goals, objectives, interests and aspirations that you have to satisfy.  Whoever does this well today, wins and wins big.  It is no longer sufficient to walk and talk innovation, but also to sell it to be successful.

Many of the ideas of this blog were adopted from an outstanding book  titled, “The Challenger Sale,” that explains this new sales approach which is counterintuitive to the popular approach of relationship selling.  The book does not decry building relationship with customers, but based on their extensive research, they have found that relationship in businesses today are built and strengthened through impactful solutions that lead to relationship, instead of generating business through relationship. This was their key finding and the book goes on to explain how one can build relationships that are mutually beneficial with results and case studies.  

A common mistake lot of companies succumb to when they try to bring innovation to market is that they attempt to sell it through the traditional approach that has been popular for a long time now.  This approach involves spending lot of time and resources building relationship to establish trust, and then hoping that, through discovery (asking probing questions), you will better understand customers’ needs and map your solution to those needs. Though it sounds reasonable, it has several shortcomings,  such as: one,  it takes a long time and expends plenty of resources; two, customers often don’t know their true needs or can coherently articulate them; third, even if you get past the first two, the timing may not be right for your solution to be adopted.  Thus, you have wasted lot of time and are now faced with making a difficult choice of either walking away or stay the course.   

To avoid the business death penalty, companies are looking for solutions that will give them a significant advantage over their competitors; therefore, you want  to ensure that your solutions lead to relationship predicated on the value you can deliver fast.  Traditional sales approach does not accelerate bringing innovation to market but often accelerates company becoming irrelevant.  

The innovative way to sell is to bring valuable insights that will help customers make money, save money or do things better, cheaper, faster and smarter.  This is the only way to get the  attention of decision makers, since they have no time to learn about your products and solutions.  The burden falls on you to bring something new that is indeed a potential game changer that they have not thought about.  The risk you face here is that it could be a very short conversation or lead toward a mutually beneficial relationship.  To succeed today, you have to make the customer successful.  There is no shortcut to success.  

To achieve success, you must effectively perform these three activities during the sales process:

• Teach
• Tailor
• Take Control

Teach

"In a completely rational society, the best of us would be teachers and the rest of us would have to settle for something else."
- Lee Iacocca

To get customers attention today, you have to bring unique perspective about their business
that will want them to talk to you.  During the conversation, you want to bring insights that will reframe the way customers’ view their business and help them improve their competitiveness.  To have this type of conversation, you not only have to be able to teach the insights but have solutions and examples you can point to where you have delivered success.  The initial meeting is short and right to the point.  Either you are going to go ahead or save time chasing a dead end opportunity.  Innovation sales is no different than innovation; you want to fail fast.  

With the innovative sales approach,  you will offer insights based on your deep knowledge of the industry and a good understanding of the customer’s business.  If you are able to reframe their view of their business with the insight  you are bringing, the next step you want to move toward is to have discussion on how you can jointly do something similar for the customer with whom you are having conversation.  This is different in a sense that you are leading with an insight that has a potential of a breakthrough solution.  You only want to invest more time if the customer and you are aligned on  shared risk, shared reward approach to deliver business outcomes. 

Tailor

“Fight as if you are right, and listen as if you are wrong.”
 - Karl Weick

Today a purchase decision in B2B is no longer made only by the CEO, but often based on a consensus within the organization.  Gone are the days when a leadership was a solo act; today leadership is more distributed due to the complexity involved in running an organization in a rapidly changing environment. Hence, not understanding this new reality results, mercifully,  in a quick  death of the sales process, or, worse, enters the black hole of the sales process.  

You have to get support from other decision makers in order for CEO to give his approval to move forward with your solution.  This makes sense since companies are operating in a “one and done” mode where they may not get a second chance to fix their mistake, so your best salespeople turn out to be the stakeholders you have to win over.  They have the relationship, credibility and track record that you don’t.  The best strategy then is to make them your advocates.  

This is very complex since each decision maker will make a decision through five lenses that you have to understand and penetrate, and they include:  individual, role, group (departmental), company (organizational), industry.  Work from outside in by establishing your knowledge of the industry, then work toward the company’s position in the industry, next move to  the value the department provides within the company, then the role the decision maker plays to make the department relevant and lastly, his individual goals and objectives. This is hard work but unless you can penetrate through these five lenses, you will not likely to succeed in gaining a strong advocate.

This is where you have to be very good since you have to do it in a very short time.  As Oram Klaff explains in his excellent book, “Pitch Anything,” that you have to master the art of pitching, since this is high stakes and you have to get it right the first time to move on.  To get it right, the book explains using findings from neuroscience on how our brain processes information using our crocodile brain, mid-brain and neocortex part of brain.  It is critical to know this before you pitch anything in any environment, since you are in a proverbial “March Madness” as in college basketball  to winning a deal.  The harsh reality is that you are in a “one and done” mode, so you have to pitch well, survive and advance.  

The main thing to remember here is not to waste the decision makers’ time or quickly get bounced to some subordinate and enter the dreaded black hole of a sales process.  This is where you don't want to end up since there is lot of politics involved so you must know how to navigate through the process adroitly.  Often sales people are just not good at  this and default to building relationship, which does not result in business and hurts the company. So, you must be able to tailor your value proposition in terms of different needs within the organization to advance the sales process. 

Take Control

“We are now faced with the fact, my friends, that tomorrow is today. We are confronted with the fierce urgency of now. In this unfolding conundrum of life and history, there is such a thing as being too late.”
- Martin Luther King, Jr.

If you can’t convince the customer regarding the urgency they face then you are not going to convince that it is worth solving. You are not selling to make friends, but to sell a solution that will help the company make or save money.  If you lose focus of this, you will quickly enter the black hole of sales process.  As you know, no one has ever come out of this with a deal.  

Your job in taking control is similar to that of a quarterback, which is to keep the drive going and control the ball so you can score a touchdown and win the game.  You have to be careful in not punting (going back to relationship based selling) or turn the ball over (not succeeding in teaching and tailoring).   No matter how you do it, the goal is to keep going forward, score, and win.  

This is the activity where you are guiding the whole process from start to finish where you have the confidence in knowing that you are bringing something new that will help the customer and are willing to take  a joint risk the risk in developing a solution together to share the reward  This is what the customers are looking for today. Unless you can do this well, you can’t take control of the sales process.

In closing, to be successful during the entire sales process, there are only two questions that really matter that you have to keep asking yourself before and during any meeting with a decision maker:

“So What? Who Cares?”

“Why should this customer buy from you over anyone else?”

They look simple but if you are facing a time constrained, attention deficit decision maker, this is all he is likely to care about  in allowing you to move to the next step, so you must nail these two questions. 

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Jay Oza is a founder and principal innovation development consultant at 5ToolGroup, a company that specializes in helping startups and established firms bring innovation to market within 90 days through our unique 5Tool Methodology that integrates sales, marketing, partnerships, customer development and agile/lean methodology to enable frugal or ("Jugaad") innovation.  We believe that to succeed today, you have to continuously look for ways do lot more with lot less. This is the only way to win today.   

"Now my friend, the first-a rule of Italian driving.
[Franco rips off his rear-view mirror and throws it out of the car]
What's-a behind me is not important."
- From the scene in the movie, “The Gumball Rally.”

Today we hear and read about innovation everywhere, whether it is in the media, quarterly earnings call, products we purchase, advertisements, business speeches and politicians. They are all talking about innovation because they know that today it is well understood that in order to grow today,  you either innovate or die.  It is quite cruel, but then when you look at companies that once had a dominant position not too long ago are now struggling or have become irrelevant, such as Nokia, RIM, HP, and Yahoo to name just a few.  Some of them are trying hard to get back in the game but it is going to hard once you lose your edge.

Though people understand the importance and willingness to innovate, it is extremely difficult to do it, even for companies that have a proven track record at innovating.  Succeeding with innovation is like threading a needle. Lot of things have to fall in its place, some of it is directly under your control and some of it is not. In this blog, I explain two types of innovation, and why innovation is so difficult.

What is Innovation?

Before I go over why innovation is so difficult, let me first explain that there are two types of innovation: disruptive innovation and sustaining innovation.

Disruptive innovations, as Scott Anthony of Innosight describes in his book, "The Silver Lining," consist of bringing something that is different, not better, than what their competitors are doing.  This type of innovations focus on simplicity, affordability, accessibility and customizability. Whereas sustaining innovations consist of bringing something to the market that is better than what the competitors offer, such as adding a fifth blade on a razor, making a TV WiFi enabled, or increasing the battery life on a cell phone.   

Sustaining innovation is very important for companies as it tries to generate profits through differentiation, but it does not create new growth and typically the advantage they have through differentiation is short lived as competitors quickly catch up.  And if companies can not continuously sustain innovation, then they end up competing on price only, which is not very profitable.

A disruptive innovation, however,  consist of product or service that is initially not as good as the  product it is disrupting, but it is good enough. Its main advantages are that it tends to be simpler, affordable and accessible, customizable,  and then companies work on making it better once it starts gaining adoption in the market.  

In this article, when I talk about innovation, I am referring to disruptive innovation, since they have the effect of transforming a market and create tremendous growth. To understand disruptive innovation, I have provided some examples of companies that have done this..

Nintendo


Nintendo, a video game maker,  was in a tough fight against Sony and Microsoft in the competitive video gaming industry.  Rather than taking them on by making its product better and more appealing to the gamers, it went after non-consumers with its hand held product (Wii)  targeted at the Baby Boomers who wanted to remain active as they got older.  They created a new growth engine where none existed before by making their Wii product simple, accessible and targeted the video game for the non-users.  

Google

Google, a search engine company, changed the game with online advertising and turned itself into a powerhouse.  They made advertising simpler, affordable, accessible and customizable.  Suddenly a small player can compete against bigger, well funded rivals through online advertising. 

This was doing advertising totally differently through inbound advertising rather than the traditional outbound advertising that is not only expensive but difficult to accurately measure its effectiveness.  With Google AdWords, small companies suddenly can generate business from anyone with an access to the Internet.    

Minute Clinic


Minute Clinics, walk in health clinics,  are an example of how they are disrupting the health care industry.  Their business models uses nurse practitioners in walk-in office in a convenient location where they can diagnose or treat close to 20 medical problems such as ear infections, strep throat infections and prescribe generic drugs that can be obtained at the same store.    People prefer going to Minute Clinics since they are convenient, affordable and provide high quality and well coordinated with the primary care provider.

Spanx


Spanx disrupted the hosiery industry by again not doing it better but doing it differently by developing a footless pantyhose. Sara Blakely, founder of Spanx, got so frustrated with the existing pantyhose that one day she took a scissor and cut off the feet of the pantyhose and the idea was born and started a revolution in women’s hosiery business.  

Why is Disruptive Innovation so difficult?

All of the examples above make innovation look very easy, so then why is it so difficult for established companies to innovate?  There are three main reasons why companies struggle with innovation. First, there is the expectations game on which  CEOs are measured that makes innovation a lower priority; second, established companies are geared for performance, not innovation, so it is difficult to apply performance metrics to measure innovation; third, even if a company was successful in innovating a product or service, the overall success is still dependent on building and nurturing an innovation ecosystem.  I will cover each of these below.  

Expectations Market

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”  
- Upton Sinclair

One of the reasons CEOs find it difficult to innovate is the whole expectations game that investors play where the investors are only interested in the performance of the stock and not its overall business performance.  When the expectations gets high, CEOs  focus on meeting the expectations and don't have time to  spend time on innovation.  

The expectations game, as Roger Martin explains in his book “Fixing the Game,” makes it very difficult for CEOs to focus on disruptive innovation which is non-routine and uncertain and unlikely to increase its stock performance over the short horizon.  The CEOs job then is to drive short term profits to increase  the stock price---the only metric that most investors care about.   

Another reason why CEOs focus on driving stock price higher is that their compensation is directly tied to the performance of its stock price and, thus, it is in CEOs' financial interest to do what will increase the stock value in the short term than focus on its long term performance.  What we see is that compensation is dictating the behavior of the CEO on their priorities.

Performance/Real Market 

"Performance, and performance alone, dictates the predator in any food chain."
- SEAL Team saying

If the CEO has done a good job in keeping the investors satisfied, then he has probably done it through improving its business performance such as sales, marketing, product development, customer service, and efficiency.  Since he can measure all of these business functions, he constantly is looking to improve its performance that results in growing the profits.  

Vijay Govindarajan explains in his book, “The Other Side of Innovation, that a company that is a well oiled performance engine can’t innovate with the same approach that drive performance.  They are in conflict. Innovation is non-routine and uncertain, whereas performance is repeatable and predictable.  Established companies are built for performance, not innovation.  For example, you don’t put a jockey on a horse that is not ready to win the stakes.  Innovation is like getting horses trained for stakes, so hopefully few will be well trained to race and win.  To train horses, you need horse trainers and to win the horse race, you need jockeys. They are not interchangeable.  Similarly this is same when it comes to innovations versus performance in a company.

Ecosystem

"Our success has really been based on partnerships from the very beginning."
- Bill Gates

Some CEOs are able to satisfy shareholders and create a real performance engine and are able to innovate, but still fail to create growth.  One of thing that they often tend to overlook is that they focused on innovation but not on building an innovation ecosystem. Innovation ecosystem as Ron Adner explains in his book, “Wide Lens,” consist of a company “creating an alignment of partners who must work together in order to transform a winning idea to a market success.”   

Having a great product is not enough to create growth.  Success depends on building partnerships across the entire innovation chain. Many companies overlook  that their innovation’s success hinges on other companies also innovating or adapting with their innovation.  If companies are good at innovating but lack skills in partnering, they  become vulnerable to another company that develops a competitive product but ends up winning the innovations game through building and nurturing the innovation ecosystem.

Though it is an imperative for all companies to innovate, it is very difficult to pull it off for the reasons mentioned above.  Unless companies develop a core competency in coming up with a disruptive innovation, they will not be able to create growth, but rather  survive through performance as long as they can hold off their competitors  Success in business today is all about creating continuous innovation.  Those who do it well will  lead and those who don’t, will follow or disappear.  

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