Driving Eureka!. Doug Hall

paragraphs above make it seem easy to lead an organization into the future. It’s not. It’s very hard to set strategy for the future. That’s because the future is unknown.

      When setting strategy, leaders always work with imperfect information. They make decisions on where competitors and customers are going to be in the future. I say this in my own defense. The students on campus like to remind me of the interview I did in 1999 for Inc. magazine. In it, I was asked what I thought about the internet. My response was:

      The internet is a library. Before it existed, I didn’t go to the library that often. Now that it exists, I don’t go there any more than I went before. It’s a great place to find eclectic facts, but its practicality and functionality are limited.

      It’s fair to say that I totally missed that one. And the internet’s “memory” is very unforgiving.

      It’s not possible to predict the future with precision. Fortunately, there are Future Mining tools that we teach, such as if/then scenarios, patent mining, and lead user immersions, that can help leaders think smarter about the future.

      The Idea for Innovation Engineering Was First Sparked on December 19, 1979

      I had just returned home for the Christmas holiday from the University of Maine, where I was in my junior year studying chemical engineering. With a sense of urgency, my father, Merwyn Bradford (Buzz) Hall, sat me down in our family living room.

      “I learned something amazing this fall from a statistician named Dr. Deming,” he explained. “With manufacturing, it is well understood that you have a choice. You can either have high quality or low cost. You can’t have both. This fall I’ve learned that you can have both if you apply system thinking to manufacturing.”

      To be honest, my mind at the time was more on spending time with my high school girlfriend, whom I would soon marry and spend my life with, than on hearing about some statistician.

      But Dad was not to be stopped. With an uncharacteristic passion he said, “Doug, this is really important for you to understand. It’s going to change the way companies are run. Deming’s done it. He is the reason why the Japanese cars are so much better quality and Detroit is having so much trouble competing with them.”

      The conversation with my dad got my attention. It made sense to me logically. But what really caught my attention was the emotion my dad expressed. As an engineering physics major, he was not prone to being emotional.

      Over that holiday we talked more about what he had learned. He taught me the difference between special cause and common cause errors. He taught me about “Plan, Do, Study, Act” cycles of learning. I didn’t know it at the time, but that conversation would change the trajectory of my life and how I looked at the world.

      Applying Dr. Deming’s teaching would be the secret to the success of my work at Procter & Gamble, my companies, my books, and even my approach to philanthropy.

      Years later, thanks to Larry Stewart, one of the earliest Innovation Engineering Pioneers, I would have the honor of teaching Innovation Engineering in Powell, Wyoming, Dr. Deming’s hometown. In Powell, I told the story of how my dad had taught me that you didn’t have to make a choice; you could have high quality and low cost if you changed your system. I added, “I am here to teach you that, when it comes to innovation, you also don’t have to make a choice. You can have both increased innovation speed and decreased risk, if you change your system of thinking.”

      Procter & Gamble Was the Research Lab for the New Way of Thinking

      The country of Japan was where Dr. Deming’s teachings were developed, refined, and made real. For Innovation Engineering, Procter & Gamble served a similar role.

      It started when, after graduating from the University of Maine, I took the path less traveled by chemical engineering graduates. Instead of taking an engineering job, I went to work for P&G in their brand management department.

      As I look back on it, it’s a miracle that Mark Upson hired me. I did not have the experience to do the job. Fortunately, Mark took a gamble on me because of my entrepreneurial energy. I’d created and sold learn-to-juggle and magic kits as a teenager—and founded a promotional products company on six campuses when I was in college.

      Being a chemical engineer in a marketing job, fresh out of college, was a major shift in mindset. I found myself relying on the system-thinking principles my dad was continuing to teach me. When I got tired of reworking budget charts, by hand, for the hundredth time, I changed the system. I found a new computer program called VisiCalc—the first major spreadsheet. I wrote a one-page memo and got the first personal computer on a P&G Brand Group—an Apple IIe. It enabled me to do budget chart changes in 95% less time than by punching a calculator. It also allowed more advanced statistical analysis of business data. At the time, the office manager actually said to me, “One day I can imagine one of these computers on every floor.” I replied, “I can see one on every desk.” He just shook his head.

      I applied system thinking to strategy, finance, product development, packaging design, and promotion design.

      To the leadership of P&G, my nontraditional system approach was both exciting and frustrating. Fortunately, most of the people I worked for were by nature system thinkers who evaluated the whole and not simply the parts. My first boss had this to say about me:

      Were there times I wanted to strangle Doug? Absolutely. He was what I call a ‘high-maintenance subordinate.’ You had to watch him like crazy. He’d be nodding at what I was saying, but his mind would be somewhere else. Linear, he’s not. He’s more like a helicopter pilot—he sees the same thing you see, but from a different perspective. . . . Doug’s divergence paid off a number of times in the context of inventions that would not have been discovered simply by taking incremental steps forward from where we were.

      —Barb Thomas, my first boss at P&G

      I was quickly promoted to brand manager. In the 1980s, the P&G brand manager job was like the chief engineer role at Toyota. I had the responsibility to lead the business of my brand; however, I had no authority over any of the departmental silos. As the brand manager I was the “hub of the wheel,” leading the inevitable trade-offs required to move business-building innovations from idea to reality.

      Being a P&G brand manager was the greatest job I’ve ever had. It is the inspiration for the project leader role designed into Innovation Engineering and explained in Chapter 8. The only difference is that, today, anyone in the company can take the role, whereas at P&G in the 1980s it was filled exclusively by those in the marketing department.

      After a few years, I was offered the opportunity to be either the brand manager of Tide or to be brand manager of a struggling (and, frankly, failing) innovation group in the food & beverage division. For me it was an easy decision—innovation was my passion.

      Soon Eric Schulz joined the team. He fully bought into the idea of changing the world by changing the innovation system. He had faced the pain and suffering of the existing P&G innovation system that was designed to control rather than to enable innovation.

      Our starting place was to learn everything we could about innovation. We interviewed top experts. We read academic articles and ran lots of experiments. We quickly learned that if it took three months to execute a learning cycle—concept, package, customer research, and analysis—we could only do four cycles in a year. So we changed the system. We invented a new system we called Rapid Test that enabled us to create, test, and report results from four cities in seven days. Today, that Rapid Test system is even faster. As you will learn in Chapter 10, companies today can simultaneously test in four countries and painlessly get results in hours.

      And thus was born the P&G Invention Team. I was soon promoted to associate advertising manager (director of marketing at other companies). I insisted that we have no budget. We would cross-charge