The MEDICI EFFECT Frans Johansson What Elephants and Epidemics can teach us about Innovations PART THREE Making Intersectional Ideas Happen Chapters 9-15 "Crossroads" (1999), by István Orosz: Innovative people experience more failures than less creative counterparts because they pursue more ideas.

Chapter 9: Execute Past Your Failures— Violence and School Curricula Directional ideas may be important but are extensions, improvements, or refinements of something already known. Directional Innovation Developing a linear plan works for Directional Innovation but poorly for Intersectional Innovation. The major difference between a directional idea and an intersectional one is that we know where we are going with directional innovation. Get Ready for Failure DirectionalInnovation Inters e ctional Id aId a

Chapter 9: Execute Past Your Failures Intersectional Idea An Intersectional Idea can go in any number of directions. We don’t know which will work until we try them out. Successful execution of intersectional ideas does not come from planning for success, but planning for failure. Intersection ideas and inventions are surprising and open up new fields, usually today taking advantage of opportunities offered by changes in population, science, and computation.

Chapter 10: How to Succeed in Failure Palm Pilots and Counterproductive Carrots Try ideas that fail in order to find those that won’t Reserve/Budget resources for trial and error Remain motivated

The Relationship Of Multiple Ideas To New Product Development Success An estimated 40 percent of all new products simply fail in the marketplace * It takes as many as 25 ideas to generate one success In the consumer products industry.** In the biotech industry & pharmaceutical companies there are an increasing number of new drug candidates, and lower percentages are making it to later stages. Between 1998 and 2002, 48 percent of drugs in the pipeline were at the discovery stage.*** The ‘best’ organizations recognized one product success for every four new product ideas, while the ‘rest’ see just under 10 percent of new product ideas reaching fruition. **Abbie Griffin, “PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best Practices,” Journal of Product Innovation Management (1997, 14): *Philip H. Francis, New Product Development — the Soul of the Enterprise, Mechanical Engineering, 3/14/03. *** H.S. Ayoub, The Biotech Industry: 30 Years of Failure, Biotech Investor., 1/7/2007 **** Product Development and Management Association (PDMA) Foundation 2004 Comparative Assessment Study (CPAS)

How do you reward failure? Make sure people are aware that failure to execute ideas is the greatest failure, and that it will be punished. Make sure everyone learns from past failures; do not reward the same mistakes over and over again. If people show low failure rates, be suspicious. Maybe they are not taking enough risks; maybe they are hiding their mistakes, rather than allowing others in the organization to learn from them. Hire people who have intelligent failures; let others know that’s one reason they were hired. Robert Sutton “Inaction is far worse than failure in terms of assessing innovative effort.

Reserve Resources for Many Trials Be prepared to change your execution plans. You may have drawn them to convince others, motivate yourself, coordinate activities. They will need to be adjusted. If realizing your ideas depends on money, spend it carefully. Reserve enough $$$$ for one or two more attempts. OR...find trusted backers who will provide money for several trials. If realizing your idea depends on time, give yourself enough time for several trials and errors. Proceed with extreme caution if your reputation, goodwill, or contacts are riding on a successful execution of your idea on the first try.

Chapter 11: Break Out of Your Network— Ants and Truck Drivers The Network Paradox The Reason We Build Networks Why We Have to Break Away from Networks

Chapter 12: Leave the Network Behind— Penguins and Meditation 12

Chapter 13: Take Risks / Overcome Fear Airplanes and Serial Entrepreneurs ICONOCLASTS Season 2: Isabella Rossellini + Dean KamenICONOCLASTS Season 2: Isabella Rossellini + Dean Kamen

Chapter 14: Adopt a Balanced View of Risk— Elephants and Epidemics 14

Chapter 15: Step into the Intersection … — Create the Medici Effect