The 7 Levels Of Change - Introduction (Part 1 of 9)September 4, 2007 · Filed Under Business, Business Model, Creative Thinking Techniques, Creativity,Facilitation, Featured, Innovation, Myers-Briggs, Personality 

Table of contents for 7 Levels Of Change1. The 7 Levels Of Change - Introduction (Part 1 of 9)2. 7 Levels Of Change (Part 2 of 9) - Level 1: Effectiveness 3. 7 Levels Of Change (Part 3 of 9) - Level 2: Efficiency 4. 7 Levels Of Change (Part 4 of 9) - Level 3: Improving 5. 7 Levels Of Change (Part 5 of 9) - Level 4: Cutting 6. 7 Levels Of Change (Part 6 of 9) - Level 5: Copying 7. 7 Levels Of Change (Part 7 of 9) - Level 6: Doing Things No One Else Is Doing 8. 7 Levels Of Change (Part 8 of 9) - Level 7: Doing Things That Can’t Be Done 9. 7 Levels Of Change (Part 9 of 9) - Bringing It All Together

This is no run of the mill Top 7 list. Prepare yourself for a rigorous review of the greatest innovation field

guide in the universe: Rolf Smith’s “7 Levels of Change.”

I’ve since read many books on creativity and different aspects of innovation, but 7LoC was my

introduction to innovation and creative thinking. This nine-post series will describe each of the seven levels in detail explain the tools and techniques for each level discuss relations to different creative styles

Afterwards I’ll tie them together in a comprehensive philosophy for dealing with change and applying

innovation.

Here are the 7LoC:LEVEL 1: Effectiveness DOING the right thingsLEVEL 2: Efficiency DOING things rightLEVEL 3: Improving DOING things better LEVEL 4: Cutting Stopping DOING thingsLEVEL 5: Copying DOING things other people are doingLEVEL 6: Different DOING things no one else is doingLEVEL 7: Impossible DOING things that can’t be done

Each level is harder to implement that the one that precedes it. Each requires a different level of

thinking, inspires a different level of fear, and carries a different set of pros and cons. And there is

defintely a relationship between the 7LoC and creative style.

7 Levels Of Change (Part 2 of 9) - Level 1: Effectiveness

The second in a nine-part series on Rolf Smith’s 7 Levels of Change, I introduce the first level of change

- Effectiveness (Doing The Right Things).

Part 1 - Introduction

Change is a continuous process. Picture the 7LoC as a circle, each level increasing in degree and

difficulty of change. Level 1 is the most basic, Level 7 is the most extreme, and is then connected back

to Level 1. Our discussion begins with Level 1, in transition from Level 7.

Imagine that your organization is embarking on a totally new business venture, with a brand new set of

team members and customers. You’re a pioneer, exploring an area that no one has explored. In order to

be effective, you need to establish new processes, forge new relationships, and perhaps even

implement a new business model. You have to determine ‘what is right.’ This is the definition of a Level

1 change - doing things right. You are literally creating a new status quo.

Thinking

To get effective results, you have to do the right things. To do the right things, you have to

practicefocused thinking. Focus on determining the right things to do in a step by step fashion. Think

about a new definition for what is “right.”

This isn’t “out of the box” thinking - to the contrary, it’s thinking that will prototype a new box for the new

business. This type of thinking will produce immediate results - you’ll quickly know whether or not your

new processes are effective. The prototype model is tweaked until things settle into a state of

equilibrium.

Who

Certain people gravitate towards Level 1 change. Refer to my first article on KAI - people who do well in

Level 1 situations are strong adapters with a need for rules and structure. They painstakingly gather

facts and details and can easily focus on the matter at hand. Creating the box is attractive for them,

because they need the box to create the rules.

Ideas

The types of ideas produced at Level 1 are basic, based on what you know from your previous

experience. Smith recommends that now is a good time to start thinking about where you produce your

best ideas - while driving, exercising, showering, going to the bathroom, etc. Determine what seems to

be the catalyst for your best ideas, and start producing more of them.

Tools

Embarking on Level 1 change provides an opportunity to establish new habits. Smith recommends that

writing things down is probably the most effective skill to master at Level 1. This can take several forms: Blue Slips - Blue slips are created by having Kinkos or another local copying store cut a ream

of 8.5×11 paper into eighths. The resultant rectangle is a bit smaller than a 3×5 card. They are the perfect size to record one idea - a 7-9 word ‘headline’ and maybe a title. Blue slips are more effective than notebooks because the ideas can be physically rearranged, sorted, and grouped.

Post-It Notes - Unfortunately these are no longer made in blue, but Post-It notes can be used the same as blue slips, with the advantage that your ideas can be sorted and grouped on a chalkboard, white board, or even a plain wall. This can be used effectively in meetings and groups that are brainstorming ideas.

Journaling - A way to take the ideas you’ve recorded on blue slips/Post-Its to the next level is to journal on them. After grouping the ideas and considering the relationships, reflect on how they have changed your thinking. What new insights do you have, what has become clear to you.

Once you’ve mastered the skills at Level 1 you’ll be prepared for Level 2 - Efficiency.

7 Levels Of Change (Part 3 of 9) - Level 2: Efficiency

The third in a nine-part series on Rolf Smith’s 7 Levels of Change, I introduce the second level of

change - Efficiency (Doing Things Right).

Part 1 - Introduction

Part 2 - Level 1: Effectiveness

In Level 1 we focused on doing the right things to make the new organization work effectively. We

established the way to think effectively that this level and introduced a few fundamental tools.

So now we’ve established a new ’status quo.’ Your new venture is working effectively - now a different

kind of thinking takes over. Level 2 change moves us from effectiveness to efficiency - doing the right

things ‘right.’ To change an effective organization, the first thing you can do is make it more efficient.

Thinking

To get efficient results, you have to do the right things right. To do the right things right, you have to

practice efficient thinking. Level 2 thinkers create a new set of processes and procedures to maximize

efficiency, emphasizing structure and logic. “Always be prepared” - this eliminates potential bottlenecks.

Level 2 results are like Level 1, only better. Leaner, more efficient, faster, more economical.

Who

People who are attracted to Level 2 change are similar to those attracted to Level 1. The same KAI

traits - yet more adept at doing things better, conserving time and money, developing more efficient

processes and rules. As with Level 1 thinkers they need the “box” to be effective, but can make the box

work better. They are comfortable moving from a Level 1 to Level 2 situation - the changes aren’t that

drastic and are well worth the effort to them. They work to achieve a new status quo - one that is more

efficient than the old one. Yet both Level 1 and Level 2 people get nervous with the idea of drastic,

disruptive change.

Ideas

Ideas at Level 2 are about creating new rules to make processes and procedures more efficient. You

won’t get big-picture ideas from a Level 2 thinker - they are too focused on maintaining the box itself and

making it work better.

Tools

What kind of tools are more efficient versions of Level 1 tools? Day-Timer/Planner - More organized that blue slips. But keep using blue slips and transfer

ideas to it I (personally I don’t use one, as I am not that organized!) Use Blue Slips Better - Blue slips are best used horizontally. Put the keyword in the upper left

hand corner, and limit each blue slip to one idea only. Headline your ideas in 7-9 words. Here’s an example:

Handling Blue Slips - Each day or so, take your stack of blue slips and sort through them. The goal is to prioritize - “do it now” ideas that can be implemented quickly, versus longer-range ideas that need more development. Act on the do-it-now stack, put the others aside and periodically go through them to see what has become more clear.

Level 2 has made your new venture more efficient, but to move forward you have to make changes that

go beyond efficiency. Level 3 is improvement, and we’ll tackle that next.

7 Levels Of Change (Part 4 of 9) - Level 3: Improving

The fourth in a nine-part series on Rolf Smith’s 7 Levels of Change, I introduce the third level of change

- Improving (Doing Things Better).

Part 1 - Introduction

Part 2 - Level 1: Effectiveness

Part 3 - Level 2: Efficiency

In Level 2 we focused on doing things right to make an effective organization work more efficiently. We

differentiated between Level 1 and Level 2 thinking and improved our Level 1 tools.

Fast forward a few months: our efficient organization is humming along but the world is changing. You

notice that, even though processes are efficient, they no longer achieve the results you expect. You find

that efficiency is no longer enough - you have to improve your core processes. You need to introduce

Level 3 change - improvement.

Thinking

To get better results, you have to do things better. To do things better, you have to

practice positivethinking. I’ve talked about positive thinking   before and here is the change level where it

becomes a crucial skill. You need to focus outward on your customer’s experience, and inward to your

enabling processes. You must find out how to tap the creativity of your people to generate new ideas

and plans of action. You seek new technologies that improve customer experience, and processes that

establish new performance goals.

Who

As with Level 1 and 2, people who are attracted to Level 3 thinking are KAI adaptors. But they are less

concerned with adherence to rules: they’ll keep the box but don’t have a problem changing it’s shape.

They may have more affinity for interacting with people - Myers-Briggs types xSFx.

Ideas

Ideas at Level 3 can be effectively generated by some of the SCAMPER questions. For instance,

theFirefly Energy battery answers the question “What can we SUBSTITUTE?” The revolutionary battery

substitutes carbon foam for lead inside the battery to yield a four/five-fold increase in performance. The

Taco Bell-KFC restaurant combination answers the question “What can we COMBINE?” Our front it

looks like a single fast food restaurant with two menus - behind the counter it’s actually an efficient

integration of the processes of two different restaurants.

Tools

Level 3 tools are more geared at helping us think at a “higher level” than Level 1 and 2. Along with

SCAMPER here are a few other tools for personal creativity: Levels of Abstraction - When confronted with a problem, determine the root cause by asking

‘Why?’ Ask ‘why’ up to five times to achieve higher and higher levels of abstraction. Once you get the answer to the five ‘whys’ you can start asking ‘how’ and ‘how else’ to focus on more concrete ideas to solve the problem at the root.

Refocus the Problem Statement - A more lateral way of rephrasing the problem is to ask the question “Do you mean…?” until you get three ‘yes’ answers from whoever ‘owns’ the problem.

Hot Wash-Up - A Hot Wash-up is an evaluation technique that can be used at the end of any meeting, event, or project to get a collective assessment of ‘what just happened.’

After a meeting or event, give everyone a handful of blue slips. Ask everyone to write the keyword “Well” in the upper left corner and have them

answer the question “What went WELL for you?” Have them right one “Well” slip for each statement. Give everyone a minute to write.

At the end of the minute, have everyone write “Value” on a blue slip and answer the question “What was the VALUE for you personally? What did you learn?”

A minute later, have everyone write “Different” on a blue slip and answer “What would you like to have done DIFFERENTLY?”

You can also add two more optional questions before “Different” - “What became CLEAR to you?” and “What INSIGHTS did you have?”

The Five Minute Meeting - this is similar to the Hot Wash-up but can be used anywhere during

a meeting - beginning, middle, end - to focus and energize the group. The technique again

involves having the participants fill out blue slips, but the questions are different:1. “What are the critical ISSUES and CHALLENGES?”2. “What INTERESTING or novel ideas do you have?”3. “What OPPORTUNITIES do these issues, challenges, and ideas present?”4. “What ACTIONS can we take now?”

Levels 1-3 cover the continuous improvement programs like Lean Six Sigma. Moving beyond Level 3 to

Level 4 we get beyond the adaptive ‘efficiency and improvement’ changes to changes that make a big

difference. Level 4 change is ‘Cutting.’

7 Levels Of Change (Part 5 of 9) - Level 4: Cutting

The fifth in a nine-part series on Rolf Smith’s 7 Levels of Change, I introduce the fourth level of change -

Cutting (Doing Away With Things).

Part 1 - Introduction

Part 2 - Level 1: Effectiveness

Part 3 - Level 2: Efficiency

Part 4 - Level 3: Improving

In Level 3 we introduced the concept of improvement, differentiated from efficiency and effectiveness,

and discussed the tools and thinking needed to accomplish it. Together, Levels 1-3 encompass most of

what the business world considers “continuous improvement” and is embodied in disciplines likeLean

Six Sigma and Kaizen. As I have discussed before, these types of innovation benefit from accepted

systems and training/certification programs.

As time goes on, however, the world changes again and you might find yourself at a point where some

of your Level 1-3 innovations are no longer needed. Perhaps technology has rendered a process

obsolete, or things have been added to your processes that are of limited value. In order to innovate

further it’s time to do away with what is no longer needed, which brings us to Level 4 change - cutting.

The transition from Level 3 to Level 4 may induce discomfort, especially amongst KAI adapters,

because doing away with things is often painful. It invokes a more severe form of change that moves

adapters further out of their comfort zone and into the realm of KAI innovators, who welcome cutting as

the first step to transformational change.

Thinking

To get less results, you have to stop doing things. To stop doing things, you have to

practicerefocused thinking. You need to start asking, “Why are we doing this now? What purpose does

it serve? Is it worth it?”

Fortunately for us there is a simple principle which guides refocused thinking at the strategic level. It is

the Pareto Principle - the Eighty-Twenty Rule. The Pareto Principle forces us to maximize our efforts on

the things that produce the most value, and de-emphasize the rest. For us, the Pareto Principle simply

states: “Eighty percent of the value your organization produces comes from 20 percent of the things you

do.” So to implement the Pareto Principle, we identify what the “20″ is, and find ways to eliminate or

outsource the “80.”

Doblin uses the example of Sara Lee, who, in a Pareto Principle examination of their core

competencies, determined their “20″ consisted of consumer insight, brand management, marketing and

distribution. Part of their “80″ was manufacturing, which they decided to outsource.

So what happens when you are left with things in the “80″ that can’t be outsourced or eliminated?

Reduce effort to accomplish them. If the things in the “20″ are most important, give them your A+ effort.

Stuff relegated to the “80″ warrant no more than a B+ effort.

Who

Level 4 change is decidedly “midrange.” People attracted to Level 4 change have KAIs clustering

around either side of the mean of 96 and Myers-Briggs types xSxP. Pareto thinking is especially hard for

high adapters, for which the process of eliminating significant parts of the box is especially painful - and

some may have a hard time with the concept of “B+ effort.” It may not be as hard for high innovators, but

it is not really that interesting, as they are more focused on blowing up the box and starting from scratch.

Ideas

Level 4 ideas are generated from an exhaustive refocusing effort beginning with a Pareto analysis. From

there you can refocus on cost reduction end elimination opportunities for the “80.” The results of a

Pareto exercise are maximized effectiveness in the most important areas (the “20″) and costs reduced

by elimination in the least important ones (the “80″).

Tools

To cut, you need to be able to refocus on a lot of areas. A cutting exercise leaves no stone unturned.

Level 4 tools help you diverge across multiple areas to identify opportunities, then converge on the ones

that have the most promise for effective results. Sixty Words For Lowering Costs  - Much like SCAMPER, this is a systematic menu of ways

to rethink the aspects of your processes and procedures.

“If It’s Dumb, It’s Not Our Policy” - Ask two questions: “What are we doing that’s dumb?” and “What could we stop doing that no one would notice?” If you get really adventuresome, send people out to “red-tag” things that are dumb, as a divergent step to target potential things to eliminate.

Leverage Technology - with the electronic tools at our disposal we have myriad opportunity to do away with hard copies of documents, drawings, reports, etc. Move to Adobe Acrobat or whatever to eliminate the cost of duplication and printing.

When you eliminate big chunks of things by cutting, you leave holes and gaps. To enter the world of

“doing different” you can start by filling those gaps by moving to Level 5 - Copying.

7 Levels Of Change (Part 6 of 9) - Level 5: CopyingThe sixth in a nine-part series on Rolf Smith’s 7 Levels of Change, I introduce the fifth level of change -

Copying (Doing Things Others Are Doing).

Part 1 - Introduction

Part 2 - Level 1: Effectiveness

Part 3 - Level 2: Efficiency

Part 4 - Level 3: Improving

Part 5 - Level 4: Cutting

Level 4 was a transitional phase. It moved us from Levels 1-3, which concentrated on various forms of

improvement, to a level that forced us to focus our efforts on the things we do that matter the most, and

eliminate the things that are no longer needed. This creates a series of voids, and what better way to fill

the voids than by moving to Level 5 and learning to copy and adapt what others are doing.

Levels 1-4 have concentrated on what works or doesn’t work for YOU. Level 5 forces us to look outward

and determine what works for OTHERS. By focusing outward we see opportunities we didn’t know

existed, think about problems in ways that we’ve never thought about them before. But we’re not going

out on a limb, because the things we gravitate towards are proven. There is a huge incentive to copy

and adapt, because in doing so you’re letting someone else do all the hard work for you - research,

engineering, prototyping, testing, and marketing - then reaping the rewards of their efforts.

Microsoft is a master at this technique. By copying and adapting the visual appeal of the MacIntosh

operating system they created Windows. By copying and integrating the successful features of

Wordperfect, Lotus 1-2-3, Harvard Graphics and dBase, they created Office. By copying and integrating

the appeal of the Netscape browser they upgraded Internet Explorer. In each case, the Microsoft

products seized the market from the competitors they copied, due to the way Microsoft adapted their

ideas and integrated them into product systems and suites.

KAI adapters view Level 5 as a major change but will accept Level 5 ideas if they’ve been proven in the

field. This mitigates risk. KAI innovators see Level 5 thinking as a first step that can easily garner

widespread approval, in anticipation of higher orders of change later.

Thinking

To get new results, you have to do things others are doing. To do things others are doing , you have

tosee and notice things. You have to focus outward and start seeing what is going on in your industry,

as well as other industries. Because copying and adapting isn’t always linear and concrete - it also

comes from abstract connections with metaphors from other fields.

Just as Level 4 is based on the Pareto Principle, Level 5 is based on another broad concept -

benchmarking. The entire Doblin strategy of innovation effectiveness is based upon applying industry

best practices in the areas that make the most difference.

But beyond that, benchmarking is a powerful tool that lets us ask: “How do people in other fields solve

the kind of problems we face in ours?” Our thinking becomes more lateral and seeks to create

analogous situations - “How is my problem in industrial design like someone else’s problem in business

acquisition?”

Who

Level 5 change is approaching the wild stuff but not quite there. You might find that Level 5 folks aren’t

as orderly, leaving office paperwork in piles instead of files. Personally I find myself to be most attracted

to Level 5 change, and my KAI is 118, so you can place the range just to the right of the mean of 96.

Myers-Briggs types may be xSxP moving to xNxJ.

Level 5 thinkers are also useful as ‘bridgers’ who can broker cooperation between the more adaptive

and innovative team members. They are good at taking high KAI thinkers’ ideas and fashioning them

into useful solutions.

Ideas

Level 5 ideas are generated from noticing things - things from nature, things from other industries,

things from newspapers/periodicals/books, things from areas of personal interest, things from the

imagination. Ideas created from benchmarking need to be adapted to your particular situation, which in

of itself generates more ideas that answer the questions: “How could we do this here? What will we

have to do to make it work for us?”

Copying can also generate change at all the other levels. If I benchmark some else’s best practices for a

manufacturing process, I am, in effect, improving my own process (Level 3). If I adapt someone else’s

technology in inkjet printing to my problem in homebuilding, I am creating something that’s never been

done before in my field (Level 6).

Tools

Level 5 tools help us see what’s proven and works the best, and helps us create new ideas from lateral

thinking. Here are a few not mentioned in the book that I have found work for me pretty well. Doblin’s Ten Types of Innovation  - We’ve used this many times before. It is a strategic level

best-practices tool for focusing your creative efforts in the areas that make the most difference. TRIZ  - TRIZ is a powerful tool developed by G.S. Altshuller in the former Soviet Union between

1946 and 1985. It is a problem solving philosophy based on the principle that “most innovations are transpositions of known solutions from other fields.” TRIZ practitioners are adept at searching patent databases. There is also a TRIZ ‘contradiction matrix’ (see the linked website) which uses the results of the original TRIZ patent search to form a powerful linear problem solving tool in itself.

Lateral Connections  - Use the lateral connections tool on the Arsenal page to move from concrete to abstract, then to more concrete analogies in other fields.

Levels 1-5 all have something in common - by and large, they deal with ‘knowns.’ Moving beyond Level

5 takes us into uncharted territory. The risks, as well as the rewards, are higher, but it’s not for the timid.

Our next installment will focus on Level 6: Doing Things No One Else Is Doing.

7 Levels Of Change (Part 7 of 9) - Level 6: Doing Things No One Else Is Doing

The seventh in a nine-part series on Rolf Smith’s 7 Levels of Change, I introduce the sixth level of

change - Different (Doing Things No One Else Is Doing).

Part 1 - Introduction

Part 2 - Level 1: Effectiveness

Part 3 - Level 2: Efficiency

Part 4 - Level 3: Improving

Part 5 - Level 4: Cutting

Part 6 - Level 5: Copying

Levels 1-5 were very different but all had one thing in common - they basically used the tried and true.

Continuous improvement (Levels 1-3) techniques are well-documented and widespread, the Pareto

Principle (Level 4) is generally accepted as fact, and the very essence of copying (Level 5) is to adapt

something that already works for someone else. Using Levels 1-5 is liking hiking on a well-traveled trail

or driving down a paved road with ready supplies of gas, food, and lodging at the next exit.

Level 6 is truly doing different. It’s more like forging your own path through the wilderness, or blazing

your own trail up the mountain. There aren’t any amenities, there aren’t many success stories to build

confidence. It pushes most people far out of their comfort zone, as it is a lot riskier, but the rewards are

potentially far greater.

The risk aspect drives people away from Level 6. Avoiding this kind of change is the foundation

ofDoblin’s Ten Types of Innovation. Doblin’s data reveals that most attempts at innovation - well over 90

percent - fail, as they generally occur in the category of new products. Doblin’s innovation effectiveness

strategy is focused on Level 5. You can make a strong argument that Level 6 should only be attempted

when you’ve exhausted all your alternatives at Level 5. But there are times when Level 6 is the only

alternative - and true disruptive change occurs at this level.

The first Apple personal computer is an example of a Level 6 change. Prior to the Apple, computers

were big expensive mainframes and complex minicomputers that required arcane operating systems

usable only by the adept. They appealed to scientists, engineerings, and programmers as analytical

tools. The Apple PC was targeted at a totally different segment of the population - the business user, the

home user. It was more user-friendly, less powerful and complex, and a lot cheaper. The Apple PC was

a calculated risk - no one really knew if it would appeal to this new market. Thirty years and billions of

sales later, personal computer sales dominate the computer industry.

What level change is the EEStor ultracapacitor? As far as ultracapacitors go it is a Level 3 change -

improved materials yielding better performance. But you can argue that it is a Level 6 change as well -

using ultracapacitor technology to innovate the high performance battery field, in an attempt to obsolete

batteries altogether.

KAI adapters view Level 6 as far too risky, and rarely find themselves comfortable when confronted with

a problem that requires such innovative thinking. KAI innovators crave Level 6 change as necessary to

their creative impulses.

Thinking

To get different results, you have to do things no one else is doing. To do things no one else is doing

, you have to practice lateral thinking. Level 6 thinking is focused outward, like Level 5, but it questions

many of the assumptions that make Level 5 work. You have to get outside of your comfort zone and

look at problems from new and novel perspectives.

Unlike Level 4 (Pareto Principle), and Level 5 (benchmarking), there is no one broad principle for

effecting Level 6 change. It involves more abstract thinking tools and procedures to generate off-the-

wall, novel ideas. Abstract thinking is necessary in order to force the change in perspective.

Who

Level 6 thinkers are the high KAI innovators who are viewed by others as the rule breakers, the

mavericks, the ones who have a vital need to implement drastic change. They are predominately Myers-

Briggs types xNxJ and xNxP. They may have messy offices with piles of papers, they may like to

rearrange their workspace periodically in order to create an environment more conductive to their ways

of thinking and personalities. They may be habitual jokers and pranksters. They love to talk about the

newest thing they’ve seen in other worlds, and look for ways to apply it in their world.

Ideas

Level 6 ideas challenge the fundamental assumptions of the current situation. How do you get Level 6

ideas? If you notice something in another field that is brand new and innovative, you might want to copy

and adapt it to your field even though it’s too new to be considered “proven.” That differentiates it from a

pure Level 5 idea. As I discussed in Level 5, another similar Level 6 technique involves adapting

someone else’s technology in a totally different field to solve a problem in my field.

Tools

Since challenging assumptions is the foundation upon which Level 6 is built, let’s start with: Challenging Assumptions  - Use this tool to identify and reverse all assumptions associated

with your situation to generate novel ideas. FCB Grid  - The FCB grid shows us visually where there might be opportunities for focusing on

new markets Random Words  - Random words and other forms of forced connections generate novel ideas

by connecting our problem to the aspects of seemingly unrelated words and images. Mindmaps - Mindmapping was developed by Tony Buzan in the late 60s. Mindmaps depict

information in a visual manner, as opposed to tables and charts. A good source for learning mindmapping is here. Use mindmaps to discuss the problem in a freeform visual fashion.

Moving to Level 6 has taken us into uncharted territory. Our next stop is the end of the line - Level 7 -

Doing the Impossible.

7 Levels Of Change (Part 8 of 9) - Level 7: Doing Things That Can’t Be DoneThe eighth in a nine-part series on Rolf Smith’s 7 Levels of Change, I introduce the seventh level of

change - Different (Doing Things That Can’t Be Done).

Part 1 - Introduction

Part 2 - Level 1: Effectiveness

Part 3 - Level 2: Efficiency

Part 4 - Level 3: Improving

Part 5 - Level 4: Cutting

Part 6 - Level 5: Copying

Part 7 - Level 6: Different

What separates Level 7 change from Levels 1-6? As diverse as they are, Levels 1-6 share one thing in

common - they work in what is known to be possible. Not always practical, not aways easy, and not

always concrete - but possible. Level 7 pushes us into the realm of the impossible - what no one

believes can be done. But it’s a transient level - because once you do it, it’s no longer impossible. You

might want to think of Level 7 as ‘Making The Impossible Possible.”

What do you consider impossible? For me, rock climbing was impossible until September of 2006. Up

until then my fear of heights and perspective on rock climbing in general had convinced me there was

no way I could do it. But all it took was a guide and some basic instruction and away I went.

Rock climbing is no longer impossible for me, but not all rock climbing is created equal - it can be

relatively easy or relatively exasperating. I recently joined a local gym that has a climbing wall. The wall

is straight up and has routes of various difficulties, none as easy as I had climbed last year. Due to the

lack of sufficient handholds I could not even do the easiest route until last week, when my hand strength

caught up and I finally figured out an easier way to do it. Now I can climb it with ease. But there are

eight other routes that exceed my ability - to me they are impossible. Or they will be until I achieve

sufficient expertise to climb them.

The key is to develop the mindset that even though something is impossible now, it can be made

possible through tenacity, creative thinking, and focused effort. Make the impossible possible and

fortune and fame await.

In business, doing the impossible is seldom considered. As risky as Level 6 is, Level 7 is even riskier.

But from a creative thinking standpoint it’s a lot more fun, because there’s nothing to lose - free your

mind and think of everything that can’t be done, but if it could, would change everything.

Some examples of Level 7 change: The first airplane The laser The light bulb Open-heart surgery The Cubs winning the World Series

KAI adapters view Level 7 as insane, and experience great discomfort with the notion of casting aside

all creative inhibitions. KAI innovators enjoy the challenge of Level 7 thinking.

Thinking

To get impossible results, you have to do things that can’t be done. To do things that can’t be done,

you have to practice breakout, imaginative thinking. You have to totally eliminate any tendencies

towards pre-judging your ideas and free your thinking totally. Your motto should be: “They said _____

can’t be done - but we can find a way to do it.”

Wouldn’t it be great if we had an invisible airplane, like Wonder Woman’s? We do - it’s called the Stealth

Bomber. It started with the idea of doing the impossible - making an airplane invisible.

Who

Like Level 6 thinkers, Level 7 thinkers are high KAI innovators, mostly Myers-Briggs types xNxP. They

abhor detailed work, challenge structure, and look for ways to evade rules. They are visionaries, big-

picture thinkers, and look for ways to disrupt the status-quo. They create unique work environments and

have little patience for bureaucracy.

Ideas

As discussed above, Level 7 ideas come from unrestrained thinking. It’s often a function of asking a

series of questions that force you to question what you think you know about the limitations of industry,

society, and even science. The crazier the ideas, the better. It’s also important to proliferate ideas at this

level, because not all crazy ideas can readily be converted into practical solutions. Level 7 ideas are

often the results of integrating various positives from several different far-out notions that attack the

problem from different perspectives.

Tools Challenging Assumptions  - Challenging assumptions was introduced in Level 6 but can also

be used to produce Level 7 ideas. Level 7 Questions:

“What is impossible today, but if were possible would fundamentally change the way we do business?”

“What would solve our problem, but has absolutely no way of being implemented due to (science, laws, etc)?”

“If we can’t have _____, what would do in a pinch?” Crazy Ideas  - I posted this tool last week for the first time. It is probably the most important

single tool you can use to generate Level 7 ideas that work. The key is to capture the essence of the idea and move from abstract to concrete.

We have reached the end of the line. My last installment will tie everything together and suggest some

practical ways to put the 7 Levels to work.

7 Levels Of Change (Part 9 of 9) - Bringing It All TogetherThe last in a nine-part series on Rolf Smith’s 7 Levels of Change, I bring everything together and

discuss how to put the 7 Levels to work.

Part 1 - Introduction

Part 2 - Level 1: Effectiveness

Part 3 - Level 2: Efficiency

Part 4 - Level 3: Improving

Part 5 - Level 4: Cutting

Part 6 - Level 5: Copying

Part 7 - Level 6: Different

Part 8 - Level 7: Impossible

Let’s start by assembling a short FAQ on the use of the 7 Levels. Cutting to the chase:

Q: How do I use the 7 Levels?

You use the 7 Levels by thinking about your problems and determining what kind of solutions are

appropriate. Can I solve my problem by doing things better? Then focus on Level 1, 2, and 3. Must I do

things differently to solve my problem? Focus on Level 5, 6, or 7. Some problems call for improvement,

some call for novelty. Some call for the tried and true, some call for the new and unproven. Start looking

at change in these ways:

“Doing better” vs. “Doing different”

“Sustaining” vs. “Transforming”

“Evolutionary” vs. “Revolutionary”

Another way is to consider the 7 Levels as a sequential methodology to guide your thinking. It’s like an

innovation diagnostic procedure. In each installation in this series I’ve included tools and techniques to

help you answer these questions: Are we being effective? Can we be more efficient? How can we improve? What can we improve? What can we cut? Who can we copy? How do we adapt it to our situation? What can we do that no one else is doing? What is impossible today that, if it were possible, would fundamentally change the way we do

business?

Q: Do I HAVE to go through the 7 Levels in sequence?

You don’t have to perform exhaustive analysis for each level but you should at least THINK about each

level. You might be able to rule out certain levels fairly quickly.

Again, it all comes back to the problem you’re solving. Going through the 7 Levels in sequence is

methodical but it might waste effort, depending on how well you’ve defined your problem. In the

appendices to the book there are several case histories that illustrate the benefits of the sequential

approach.

Q: Why don’t I have a feel for Level (whatever)?

People have different creative styles and personalities. People with adaptive creative styles and Myers-

Briggs type ISxx and ESxx are drawn to Levels 1, 2, and 3. People with innovative creative styles and

Myers-Briggs type INxx and ENxx crave Levels 5, 6, and 7.

It would be hard for a person with an adaptive creative style to come up with Level 6 ideas. Or more

correctly, what constitutes a Level 6 idea to an adaptor wouldn’t necessarily be the same as a Level 6

idea from an innovator. Likewise an innovator would have a hard time coming up with Level 2 ideas that

merely improved things. He might try to improve efficiency by blowing everything up and starting over

with a new process or procedure. In either case the solutions may not be appropriate to the problem.

Q: What levels provide the most bang for the buck?

Consider that as the Levels go up, risk goes up but so does reward. More than likely, Levels 3, 4 and 5

balance the risk and reward the best. This gives something for both adaptors and innovators to like.

Level 5 is especially attractive in that what you are copying is proven, and the cost of researching and

developing what you are copying has already been borne by someone else. Microsoft has used this

strategy time and time again. Focusing on what works is the cornerstone of the Doblin strategy.

Q: Can solutions at one Level lead to changes at other Levels?

Indeed. The book itself contains a great example of this - the first combination KFC-Pizza Hut

restaurants.

Combining two separate franchised restaurants into one was a Level 6 change to the people who came

up with the idea - no one had ever done it before. But once they decided to do it, they found many

opportunities for Level 2, 3 and 4 changes in process integration and elimination of redundant

capabilities and positions.

Using the 7 Levels for Fun and Profit

Consider what would constitute the 7 Levels for an aspect of your business or activity. Let’s take an

example we’ve talked about before - collaboration.

The 7 Levels of Collaboration:1. Effectiveness - “I tell you want I need and vice versa”2. Efficiency - “I use email to tell a bunch of people what I need and vice versa”‘3. Improvement - The Golden Rule: “I treat you how I want to be treated, and vice versa, so we

work together better”4. Cutting - “We determine what’s most important about our collaboration, focus on it, and cut out

the crap that makes it more difficult”5. Copying - “We look at how others collaborate and learn from them”6. Different - The Platinum Rule: “I learn about your type, style and temperament to better

understand how you want to be treated, and vice versa”7. Impossible - Telepathy and Empathy to create perfect, instantaneous collaboration

What about these?

The 7 Levels of Customer Experience The 7 Levels of Rewarding Our Employees The 7 Levels of Business Model Innovation

Start thinking about the Levels of Change in everything you do, in every problem you have to solve. And

keep in mind that as the Levels increase, these other things increase as well: Risk Reward Novelty Fear Complexity Uncertainty Disruption Glory

I’ll be revisiting the 7 Levels in future posts. I hope this series has been as fun for you as it was for me.

As Rolf says: “Keep Moving Forward!”

The two different broad categories of innovative change - doing things better (evolutionary change) and doing things different (revolutionary change)

_____________________________________

What were the top three innovations your team or organization introducedTo the marketplace in the last twelve months? Were these innovations1) Small, internally focused productivity improvements; 2) Incremental changes in the marketplace; or 3) Radically new changes in the marketplace? In other words, were they Efficiency, Evolutionary, or Revolutionary?Innovation activities? Ask yourself in which of these three categoriesYour team is spending most of its effort.An easy-to-understand illustration of the range of possible approachesFor innovation is The Innovation Value Continuum shown below:Efficiency Evolutionary RevolutionaryInnovation Innovation Innovation

What's Innovation?

The word itself gets used all the time in the news, in press releases made by governments and universities and in company boardrooms

around the world – innovation, innovation, innovation! Not surprisingly, it can bring to mind a variety of meanings depending on the context. Although often associated with discoveries carried out by white-haired scientist-types in high tech industry labs or universities, innovation shouldn't imply only carrying out research and development. Nor is it usually the responsibility of only a small group within of a successful company. Rather, innovation has a much broader definition and considerably wider functions, and should touch all of us every day. It's important to understand that definition and how the concept is different from the concepts of discovery, invention and creativity. Let's start by taking a look at how all of these fit together.

Discovery, Invention, Innovation and Creativity

By now you'll have been through an in-class exercise about these topics, in which we'll have considered the following figure. This is referred to as an Innovation Value Chain because it represents the very general sequence of activities that create value in our society and economy. Simply put: discoveries result in new ideas in the form of knowledge and concepts, inventions result in new technologies and business models, and innovation exploits inventions to allow for the creation of value through commodities, goods, services and experiences.

This is based very loosely on the concepts presented in Cooger et al. (1990).

Innovation

Using this conceptualization we are able to land on the following definition of innovation:

Innovation: A process of intentional change made to create value by meeting opportunity and seeking advantage.

This short definition has several key elements that are worth considering:

Process: Innovation is a process (implying, among other things, that it can be learned and managed)

Intentional: That process is carried out on purpose

Change: It results in some kind of change

Value: The whole point of the change is to create value in our economy, society and/or individual lives

Opportunity: Entrepreneurial individuals enable tomorrow's value creation by exploring for it today: having ideas, turning ideas into marketable insights and seeking ways to meet opportunities

Advantage: At the same time, they also create value by exploiting the opportunities they have at hand

Innovation involves creating value by bringing together resources that are hard to come by. It applies to small businesses, existing businesses and a range of other types of entrepreneurial ventures such as non-profit ventures. It also applies to you as an individual.

Technological vs. venture model innovation

In a later topic we are going to look at ways of distinguishing between different types of innovations. Understanding what type of innovation you are dealing with is of critical strategic importance when it comes to you deciding how you will react to an innovation, whether someone else has introduced it or whether you plan to introduce it to the marketplace.

For now, let's just distinguish between two main types:

1. A technological innovation is a change made in response to a new or modified technology.

Classic examples of technological innovation are the internet, the digital camera and cell phones, to name but just a few. Whether you or someone else in your industry is responsible for a technological

innovation, it can be a game-changer. And under the right circumstances it can provide remarkable opportunities for growth.

For those who wish to dig deeper (than required in this course), responding to this kind of innovation is dealt with in well-known works like Crossing the Chasm (Moore, 2002) and The Innovator's Dilemma (Christensen, 1997).

2. A venture model innovation is a change made in response to a new or modified venture model, or some component of a venture model (such as the value chain, the approach to distribution, the choice of mainstream customer and other such concepts that we will look at later).

Well-known examples of venture model innovation include Southwest Airlines, the Nintendo Wii and technologies like Apples' iTunes and iPhone.

While technological advances were required to enable the success of these examples, it was the unique changes to the venture models that made them successful.

For those who wish to dig deeper (than required in this course), this type of innovation is also known as strategic or value innovation. It is described in detail in Kim and Mauborgne (1997) and Kim and Mauborgne (2005).

Creativity

And by looking at creativity as the proverbial grease in the wheels of our Innovation Value Chain, we can define it as follows:

Creativity: A process of assembling ideas by recombining elements already known but wrongly assumed to be unrelated to each other.

This definition has several key elements that are worth considering:

Process: Creativity is also a process (implying, among other things, that it is more like a skill than an attitude, and that you can get better at it with practice)

Ideas: Creativity results in ideas that have potential value

Recombining: The creative process is one of putting things together in unexpected ways

It is worth mentioning that being creative is not the same as being different.

Then what's entrepreneurship?

A simple definition

Given the concepts we considered above, what is entrepreneurship?

There are many definitions ranging from off-the-cuff statements made by once-successful businesspeople, to rigorous definitions developed by academics. To keep things simple we are going to borrow a simple statement made by Peter Drucker in which he says that ...

... innovation is the "specific function of the entrepreneur."

For the purposes of this course, that is enough said: entrepreneurs seek to innovate. And in keeping with our earlier definition of innovation as change, this means that the entrepreneur is an agent of change made to create value.

Perspectives on entrepreneurship

There are several commonly accepted perspectives of entrepreneurship.

One useful perspective views entrepreneurship as a combination of the right toolset and mindset. In other words, with the right tools in hand, the right approach to using them and enough practice, one can successfully innovate to create value.

It is also useful to view entrepreneurship from the perspective of the new venture life cycle. A simplified model of the new venture life cycle is shown below to demonstrate this perspective. This is also handy because it provides an opportunity to show you the design of some of the course that follow The Entrepreneurial Experience.

And what's a venture?

For the sake of completeness, it is worth defining a new venture:

New venture: An organizational vehicle through which the entrepreneurial team creates value.

In other words, formal value creation is done by teams through new ventures.

For the purposes of this course, new ventures can be:

New or existing;

Small, medium or large;

Profit or not-for-profit; and

Corporations or other types of organizations (such as product development groups, professional associations, political parties, clubs, and communities of practice).

And finally, we will consider the following types of ventures defined by their orientation to growth (borrowed from Morris et al., 2001):

Marginal ventures;

Lifestyle ('mom and pop') ventures;

Successful small ventures; and

High growth ventures.

While marginal and lifestyle ventures make up the majority, the high growth ventures produce the majority of new jobs, inventions and wealth creation (Morris et al., 2001).