Driving Disruptive Innovation

Anita Brick: Hi, this is Anita Brick and welcome to CareerCast at Chicago Booth. To help you advance in your career. Today, delighted is not a strong enough word. I am actually thrilled to be having this conversation with our guest today, Doug Hall. He is the best-selling author of seven books, including the one we're going to talk about today, which is Driving Eureka! He has starred in two network television series, ABC American Inventor and Backyard Inventor, and a nationally syndicated radio program, Brain Brew Radio. He has been named one of America's Top Innovation Expert by Inc. Magazine, The Wall Street Journal, Dateline NBC, CNBC, CIO Magazine, and the CBC. A chemical engineer by education, Doug held the title Master Marketing Inventor at Procter and Gamble, shipping a record –wow – nine new products in 12 months.

For his pioneering work on system driven innovation, he was awarded an honorary doctorate in engineering from the University of Maine and a Doctorate of Laws from the University of Prince Edward Island. And I hear in this, and maybe I'll share a little bit of this with us later, Doug, you're also known as the whiskey guy.

Doug Hall: Yes. Thank you for that introduction. My mom would be proud. We actually have a whiskey company. And actually, I'm talking to you from Windsor, England, just outside London, where we're opening a distillery next week. We have one in Cincinnati at the Eureka Ranch, one here. And we make amazing whiskeys. Innovative, patented process. It's a lot of fun.

Anita Brick: It's interesting. And maybe we'll start here. In the book, you talked about how you took processes that took a really, really long time and shorten them dramatically, which is what sometimes happens when innovation comes in. How did you balance the legacy of things, taking a long, long time and equating that with quality versus getting it done quickly, and even with a customization that you do?

Doug Hall: You know, people say, well, long must be good. When we won double gold in San Francisco, 95 ratings from Ultimate Spirits, people stopped laughing at us. Wonderful thing in whiskey is you can taste it. This isn't a mythical. It's not a mirage. Taste it. The interesting thing is that once you do this, once you break the rules and it's just like all innovations keep going.

In today's world, there's a real movement that people want to have their own. They don't want to have Jimmy Bean and Jack Daniel's whiskey. They want their own family whiskey. The full name of the company is Brain Brew. Custom whiskey disrupts the economic model, and it creates a whole new reality. And that's what innovation does, is when we keep going, keep going.

Anita Brick: And you're absolutely right. So what you've done there absolutely applies elsewhere. There was an alum, the alum said: “In your book you talk about how something must be meaningful and unique. How can you help us identify these types of innovation without having an inordinate amount of resources?” Kike how do you do it?

Doug Hall: I'll give you a left brain and the right brain. The logical one is this is very simple. And we validate this started in college. University of Oregon. We've done a lot of research. We asked people on a scale 0 to 10 how meaningful it is, how much they want to buy it or like it. And then we ask 0 to 10 how unique it is. And then we take the means and wait. It's 60/40. And that is an objective measure. To do a test like that in the internet, it'll cost you a couple hundred dollars to get a statistical sample. So it's really pretty trivial. Now let me give you the right thing. One, just think it through. In a simple sense. Meaningfulness. Does this seem like something that's really cool? Awesome. Wow. It would be wonderful if I can have that. And can you get it anywhere else? You can get anywhere else? It's not unique. 80% of the work that people do with the stuff that I talk about in the book is focused around system improvements, helping them work smarter in their daily job. That's what the focus tends to be.

But when it comes to a product, a simplistic definition is a customer is willing to pay more money for it. Nobody wants to pay more money, so only pay more money if they're getting something they can't get from anywhere else. It's a simple definition. If they're not willing to pay more, you know you're not meaningfully unique. You might be meaningful, but I can get the same thing for a same or better price.

Anita Brick: Okay, a student question that goes along with that is how do you map that same concept and same definitions on a personal brand rather than a physical product?

Doug Hall: It's the exact same concept. What do you have that you can offer me that I can't get from other people? What is this great strength that you have that can make a difference? So I just interviewed for an executive system and I went through the process and did it and take it very seriously because people are so important. That's why I spend a lot of time on a person, more so than probably most executives do. And I met this lady, Sarah, as we started to talk about things that she had good experience, but many of them had good experience.

She asked me questions. She says, I have to ask this because I've had a problem with this at my other jobs. And of course my ears perk up and she says, I want to see what your reaction is to it. And she was testing me because it's a two-way street. And she said, I really like to ask why. I like to know why we're doing things. It seems to help me in my work. And I look at her and I was like, oh my God, somebody with curiosity. And it hasn't been beat out often by the school system, right? Right. And it was. And there were all the other things with it. After I saw that. And then I look back the other questions and as I asked for more questions, I realized here was a learner, here was a curious person.

Here was somebody that doesn't want to just do the same old, same old. They want to change. They want to progress. In fact, she was interested in the career place because she was bored, because she'd stopped learning. When you work for me, I want curiosity and I want your brain engaged. I don't want you just doing tasks.

I want you to think, what is it about you that you can bring to that organization, whether it's your existing organization, the one that is meaningful, unique versus other folks and the challenge that we face here. And I'm sorry, because you picked something that really bugs me. So many of the people that I was just interviewing for an executive assistant tried to tell me how they were going to be, and they were all boring. It was like a cookie cutter clone. It's like they went to executive assistant hiring school and there was no spirit, there was no soul. There was nobody with the courage to just be who they were. As they were trying to give me the answers. They were prudent, proper. and puckered in my mind. I want energy.

When I interviewed at Procter and Gamble many, many years ago, I had my own business since age 12. Mark Upson, he says what can you do that nobody else comes in and can do? I said, well, I can do this. I reached into my pocket and I brought out Merlin's Magic Bunnies, my magic kit that I was selling at fairs, and I had paid for school doing magic, and I started doing magic tricks for him. He says, okay, that's different. And then I told him about how I'd made the product and I sold the product, which was very relevant. Don't sandblast off all your sharp edges so that you look like nothing else but the same old thing. Be you and celebrate it inside. Everybody do something unique because we're not all the same.

Anita Brick: I totally agree.

Doug Hall: I'll stop my ranting.

Anita Brick: No, I love it because I know that personally, when I was going through the MBA program and going into banking, I had an easy time in the internship process, but not such an easy time in the post MBA recruiting process because I had sanded off those things that were different about me. The fact that I had zero work experience. And my aunt, very wise said, you got to be yourself. So I went into the next interview I like, well, okay, it's not working the other way. Let me try it this way. And we absolutely hit it off. And we talked about things that had nothing to do with the questions that my classmates were asked. They were all of that entrepreneurship because of a startup I did. You know, along with that, there was a student who said, I love this question, it was funny. “Thanks, Doug. I feel like I am you or I aspire to be you. I  move quickly and receive accolades for my speed, quality, and creativity. I struggle with acknowledging and respecting what exists and came before me. How did you shift and respect the past and the present and not just the future?”

Doug Hall: Good question. There's a video guy named Dr. Edwards Deming. He's the guy who transformed manufacturing quality after the Second World War in Japan and came to the U.S. and it turns out my dad worked for him at National Corporation. We first came back to the U.S. and he famously talks about systems, which is the whole basis for all of my life's work.

And he said that 94% of the profits, the system, 6% is the work of physicists. And they asked Dr. Deming in an interview, are leadership doing enough? Are people doing enough? Are managers doing enough to support their people to build quality? He said, of course not. And she said, does this make you angry? And he then went on a rant. He said, how could they know? How could they know? How could they know? There's any other way to doing that video on campus where we teach our innovation in courses or at companies, I always play it. If I'm doing it, people don't understand it, but I'm doing it for my own, basically psychological health. So I don't go crazy because you're working on an idea that's really disruptive innovation.

You can do something and the people are looking at you like, you know, what are you talking about? And I just remember Deming, how could they know? So the fact that this student has the ability to see things, they have ideas, they can move quickly and they're agile. There's probably a passion, intrinsic motivation to it. They need to now slow down. And instead of blaming the person, educate the person you did six months in a week, they're not going to move as fast as you. So educate them. Take them on the journey with you. The minute I started doing that, it makes a difference. I'm not saying it's easy because I have a tendency to go back to it. So I watch the video again and again.

It's okay. Slow down. Got to educate him. You got to believe there’s good in all these people. But how could they know what you're talking about if they hadn't been on the journey that you've been on?

Anita Brick: Excellent point. But how do you take them on a journey that is a balance between nudging them along and not talking down to them?

Doug Hall: I mean, that's the maturity you have to believe the person's good because you usually talk down to them when you have a negative feeling about, well, you've got anger that's within you, and so you're spiting them or you're fighting them. If you really think of the person as a good person and you have a humbleness of your explanation and you take it through and you say it without guile, without hidden meanings, and not digs, but you say it with authenticity to it, then that changes it. It's the motivation behind the tone of your voice that is the difference between talking down to them and not.

Anita Brick: That's a really good point. Let's just say someone is still looking for organizations where experience workers still want to grow and advance the same time, mentor employees who are earlier in their careers. Student actually asked this question: “How would you go about identifying those kinds of organizations?”

Doug Hall: Well, the first thing I'm going to tell you is very discouraging. I hope that's not high on your priorities, because you're not going to find it very much at all until us baby boomers get out of the way. And that's baby boomers. We're kind of messed up. I just know your older alumni are going to go mad at me now, but the fact of the matter is, is that, you know, we were the hippies and we sold out, and we're pretty selfish people on our end, despite what, you know, what we try to say to morning is who I think are ridiculously awesome and don't sell out.

Please don't sweat like we did. And so it's going to be very hard because most of these organizations don't have it. These people are living in fear. It's horrific. In my organizations, it is really hard. Use them as an environment to learn the one place where you can find it. And I'm not sure that this is right to do so.

I'm going to lay out both sides to it. The one place where you can find that soul, if you would within an organization, is in companies where the founder is still meaningfully engaged in the company. When you have your name on the building, it changes everything. There's obviously there's bad situations, but in general, when there's an owner operator there or they're significantly evolved, not retired but truly involved, there's a soul to a company that is totally different than when it's a professional manager running, at which case there is no soul.

I mean, it's just the mercenaries column. What they are, those companies can do it. But the problem is oftentimes those companies, especially if they midsize icon stuff, they don't really have the resources to learn. I spent ten years at Procter and Gamble. It was a great company, wonderful company. But frankly, they had as many idiots as everybody else has.

I'm not going there for them to tell me. I'm there to run the experiments, to think and to learn myself. Invest in yourself. That's what you need to do to make this work. Take responsibility for yourself. Don't lay it off on someone else. And when you take responsibility for your life at this moment, right now, then all of a sudden, yeah, you get the best you can get.

Anita Brick: Interesting perspective. An alum said: “Doug, really good book. How would you suggest applying the plan, do, study, act to career advancement and even to my startup?”

Doug Hall: Okay, so plan, do study, act. It's a version of the scientific method. It's called the dummy cycle theory of knowledge where you come up with a hypothesis, you try something, then you study. You try to figure out why did it work, why didn't it work? And then plan. You decide to go around again or to do it and it's different. The plan to check act, which is for implementation. This is the theory of knowledge. It's how you get smarter. And so if you take it, instead of saying plan, do, study, act, you just say theory of knowledge, how I'm going to get smarter. That's how you get smarter. You come up with a question or a hypothesis. I wonder if you try something, then you stop and think. And that's the most important is to study. You stop and think, why did it work? Why didn't work? And a classic mistake is we say we're a genius. When it doesn't work, we say, okay, that was stupid. And we don't think about why did it work.

So with my whiskey business, for example, we did 72 cycles in seven days. We get to the 72nd point where, like we put it in, we're making it. It's going to be perfect. We got it. It's horrible. We go, oh my God, what do we do wrong? We missed something. Next morning we get up [inaudible] and I, he was a PhD. He and I were working on it. We go through every one of our cycles that we documented and we go back and we notice cycle 13 and we go, oh my God, it didn't work. And we blew it off and said, oh, that's because of this. I live next to the Eureka Ranch in an old historic house. We ran over to the ranch for the bottles where we tasted bottle 13. It was like, oh my God. We have discovered the secret to breaking the time continuum of whiskey and wood. But we hadn't taken the time to think. To think that bottle is now kept in a safe, because it's the secret to being able to make whiskey really quickly.

And so in your life, try something every week, try something. Or if you're like my team, do it every day. Try something. Do it. What you learn from it. You want to do it again. You want to stop. If you don't, you have to grow. It's also called learning. It's the same thing.

Anita Brick: Got it. Well, along with that, and a staff member actually asked this: “In your book, you talk about sharing big mistakes you've made. What do you do to feel comfortable actually doing that? Because it scares me.”

Doug Hall: It's interesting you say this because I was just at a conference in Madrid, and there were a whole lot of people that get up to talk about failure and why it's okay. And as an entrepreneur and a bit of a scientist, American me, but as a scientist, it's part of the journey. It's just part of the journey. Things don't work. The top PhDs who get cited the most, you know what? They've also written the most papers. That gets cited like none. It's a package deal. Okay. You have to start from the perspective of it's part of the journey. What helps me more than anything is to not fixate on the thing I did, but fixate on the thing above that which is the mission.

Why is this important to me to do this? Why am I trying to do this? Because then it's the mission, and the speed bumps along the way are like, whatever, whatever. And people don't do that. People take a stance and they think that their self-worth is in being perfect, and those people will never create anything great in the world. And so focus on the bigger mission and then you'll get it. It's just part of the process that you go through.

Anita Brick: Okay. Why is important. Understanding the mission is important. How did you identify your why, your mission? Because clearly you've done a lot of things. Some of them have worked, some of them have happened, more have clearly. How did you discover your own why people struggle with that?”

Doug Hall: I'm still figuring it out. I'm either still figuring it out or it's evolving. Okay, okay. I mean, I'm not okay. I'm not sure what the answer is, but at various points in my life, it was there. It's almost like been every ten years it's changed. I spent my 20s basically at Procter and Gamble. What I was trying to do was to learn, what the heck is this whole thing of brands and marketing? And I was there to learn. And about midway through, I went back to my roots. I liked to invent stuff. I'm an inventor, and whether it's inventing whiskey or helping Nike or Disney and things or American Express, whatever it might be, I like to invent. I like to invent things.

Interestingly, when I wrote my first book, Jump Start Your Brain and books are great. If you want to figure out what you're really about, just write a book. I don't care if you publish it. Write a book, and the way you write is you get up every morning, 6:00 in the morning. You write for an hour to an hour and a half every single day, seven days a week. That's how you write a book. Even if you don't feel like it, you still write. It's a simple system, but in the process of writing it, I figured out that what I'm about is I love to myself and now at this point in life, it's about teaching, which is to come up with systems, enable people to make smarter, faster and more integrated. That's what jazzes me right now.

How can I help you think smarter, faster, and more innovatively? And that is what the whole book is about, the Drive Eureka book. That's what I'm into now. I'm a teacher now. I was an inventor. I was a learner. I'm a teacher now. And it's not just teaching, but coming up with systems that enable other people to teach. It's my focus. Don't worry about getting perfect progress, not perfection. Make something up and try it. See how it feels for a while and change it.

Anita Brick: I think that that's scary, but I agree with you because if you don't get into that scary space at least a little bit, nothing great ever comes.

Doug Hall: Well, nobody can say you're wrong.

Anita Brick: We defeat ourselves first. We're the first ones to back away. I see it in myself, I see it and is the externalities. Don't do that. If you're only seeking external motivation and not the intrinsic kind, you're always at the effect of whatever the opinion of the moment is.

Doug Hall: You are so right. That's fundamental. Deming in psychology is intrinsic, not extrinsic, extrinsic rewards. You won't keep going. You'll quit. It absolutely has to come from within you. If you don't give a crap about it, don't do it properly. Separate from that. But I'm going to give us an exception that okay. In your 20s, get over yourself. You don't even know enough to know what you want to do. Learn. You need repetitions. You need training set. There is a premise here which you've got to be willing to accept. The fact that I need to learn more. I mean, I just sat with president of the company over here just before I got on the phone. We're talking about the introduction in the UK in the next week or two.

We had a conversation because there's some laws here that are different in the US, and I had a pretty strong point of view on the thing, and he and I started talking about it and he had a point of view. But there's such mutual trust between the two of us that an hour later we had a whole new way of doing it. And he said to me, says, I'm almost giddy with excitement. I think we figured it out. And the answer wasn't mine or his. It was five generations down as we started to talk. But there was a trust doing it. And that's when this is really cool, is when you can get to that type of situation.

Anita Brick: Does this go along with starting with innovation first before having the problem? Because the student was confused, he said: “I don't understand how you can innovate without a goal or the context for the innovation. Can you help me with that?”

Doug Hall: So I messed up in the book because I'm not sure where that came from. And what's the proof? Oh, I know, wait a minute. I got it, I got it. Geez. Oh, that's so stupid. In the book, I talk about the fact that you can have problem, promise, and proof. So problem is, what's the problem that a customer has? What am I going to promise them? And proof is how am I going to do it. And I said in the book, and this is cool, I didn't. They wouldn't realize that they would see it this way. I will fix it in the next edition to make this clearer. And people tend to think it's linear. Who's the customer? What's their problem? What's the promise and what's the proof? And yes, that works some ways, but sometimes what you find is you've got a breakthrough technology.

So for example, in our case, we had a breakthrough to technology that could make amazing whiskey very quickly left to its own desires. What that ends up with doing is making cheap whiskey cheaper. Well, that's not very profitable. So we took that technology and we said, well, what does this technology enable us to do? And we go, It allows people to make their own whiskey. That's cool. The problem is, well, it's fine to drink everybody else's whiskey. I like to have pride in my own things, booty movement, whatever you might want to call it. And it's an emotional thing. And so we took it from technology up. And sometimes like one of the things that we teach on patents, patents are wonderful. They're magnificent things and we just don't teach them well. And so I told my team, I said, I want to be able to write a provisional patent application in about an hour.

And they're like, well, that's ridiculous. I said, well, that's what I want. Can we do that? You know, the problem is patents cost a fortune to just get them written, but there was no way of doing it. And sure enough, the incredible programing and education team at the Eureka Ranch, they came up with an idea is to patent process smart app that takes you through to write a provisional application in about an hour so you can start from any of them. But what you can't do is stop with any of them. It's a three-legged stool. You got to get them all if you're gonna make that work.

Anita Brick: Interesting. Very, very interesting.

Doug Hall: I didn't even realize the question until I thought about it. And I'm like, oh my God.

Anita Brick:It's totally fine. It's fine. Do you have time for a couple more questions?

Doug Hall: Sure.

Anita Brick: Okay, good. So students said, I know Anita incorporates gratitude into her coaching. I like that. You say thank you works miracles for innovation. How so? If you want people to tell you when you're making mistakes to make suggestions, to give you ideas for improving your idea, or to give you help to do it, you got to be human. Can't be a jerk, and humans say thank you. It's as simple as that. If they see you as a human and you're having a conversation, like I was just talking about Bob, the meeting with Bob on this thing, and we saw each other as humans. We have a mission to figure out how to make this work, and we're here together.

You know, we know that diversity of thought is not additive multiplicative. It's exponential. It's how it loads. And that's what the data shows 6000 teams. But you only get diversity of thought when people have trust and gratitude and a feeling of belonging together on a common mission, I'll broaden it beyond the word. Thank you to being human, being present in the moment. Don't be a jerk. Nobody helps a jerk.

Anita Brick: You are so right. You shared a lot of things. I love the book by the way. I read all 13 chapters. I will be honest, I did not read yet the interviews that you did, but I read all 13 chapters.

Doug Hall: Well, let me give you the one thing in that interview that you need.

Anita Brick: Okay.

Doug Hall: So this was Doctor Deming's grandson, Kevin Cahill. He runs the Deming Institute, a brilliant guy. Because of my dad working with his grandfather, we've become very good friends over the years, and I was talking to him about–and this would be helpful to all the people listening. Okay, so now's the moment to listen. Because you think about this stuff, all you've learned, all these amazing things, and you get out there in the world, and I can't do anything in this place. They're a bunch of nutcases. Well, get over yourself. They're all nutcases. That's just the stresses of today's world. And I asked Kevin, what do you do? And he says, it would be great. And I know my grandfather. He said, my grandfather talked to Deming, said you had to get the leadership down, but he says you're just not going to get that and you have to live today.

His advice, which now I give, is my advice to people. I just said this in Madrid, where I was just speaking recently. He said, everybody has an area of influence. So use your brain, use the wonderful things you learned at the business school. Learn those things and implement new ideas for working smarter and faster or more innovative. Whatever you want to say in your sphere of influence. Start there. You have a sphere of influence. It's much bigger than you think it is, and you have control over that sphere of influence. So whatever it is, start there. And what we're finding when we want to change a culture. I want you to start with your sphere of influence and do something meaningful.

And then what happened is you're going to find kindred spirits and it'll grow from there. So from now on, start now on the areas in front of you that you have control over.

Anita Brick: That's wonderful. Anything that you would add?

Doug Hall: Think of it, a system is a bunch of independent parts that work together to accomplish a common name. And when you think of things as a system from your frustrated, it's something instead of playing the blame game, that person's stupid. They're human, they're real. What is the system? Do they have the training? Do they have the resources? Are they overloaded? Look upon it as a system, and the minute you look upon it as a system, then it's us together working on fixing the system as opposed to blaming. We have too much blame in the world.

Anita Brick: I agree, this was delightful. Thank you so much for making the time. I know that you've got a lot on your plate, so carving out a little bit of time for us. Really, really appreciate it. Thank you very, very much, Doug, for today and what you've been doing over the last decades, because what you're doing is shaping things. And I love the fact that it's not just the left brain, it is the humanity to which you clearly bring in your voice.

Doug Hall: Well, you're very kind. This is what's most important to me is to teach people, the folks that have had the blessing, to be able to go to such an amazing school. I'm just going to cut to the chase. They got a responsibility now to make a difference. So what are you waiting for? Get up, get out, get going.

Anita Brick: You are so right. A great way to finish and thank you. And Doug has a ton of amazing stuff on his site. And what I would suggest start at the head of the macro site. It is eurekaranch.com. And then you can look at all the different things. The humanity and humility adding to everything else is so key. Doug, thanks again and wish you a wonderful launch of the whiskey. And hopefully the next time you're in Chicago, you'll let me know and swing by and chat in person.

Doug Hall: I will do that, and I'll bring whiskey down.

Anita Brick: Sounds good, and take care and thank you very, very much.

Doug Hall: You're welcome.

Anita Brick: And thank you all for listening. This is Anita Brick with CareerCast at Chicago Booth. Keep advancing.