Hello, welcome to Session 6 of Week Two, Cracking the Creativity Code Part 1, Discovering Ideas. In this session, I'm going to teach you, or explain to you a powerful tool that can help us come up with radical innovations with radically creative ideas. Invented by the great management consultant named Peter Drucker. Peter Drucker probably was the world's greatest management consultant. He passed away a few years ago and he had a great secret. It wasn't so much of a secret, but a trademark. Here's how Peter Drucker took on a consulting job. So he once had a consulting job for Starbucks, the worldwide coffee chain, and how do you begin a consulting job for a huge global company? You talk to the CEO, the board of directors, you interview the senior management, you work with the top management, right? Not Peter Drucker. Peter Drucker began by trying to discover what are the questions before he came up with some answers. And here's how he did it. He got up at four in the morning, got onto a Starbucks delivery truck. And accompanied the driver as the driver delivered Starbuck coffee and supplies and croissant to the Starbuck franchise chains. And then he observed how they were unloaded and how the coffee shop, particular coffee shop set up to greet some of the early morning first customers. In other words, Drucker began by working in the field or as a friend of mine, a British consultant, describes it, at the coal face. The place where the coal is mined. That's where it's happening. That's where you need to observe closely, if you truly want to innovate. You begin by asking questions nobody asks because they're not actually at the coal face where the real work takes place. Peter Drucker wrote many, many articles for Harvard Business Review. He was the most published author in Harvard Business Review, and he wrote articles with great common sense. He wrote an article called Theory of Business. And here is Peter Drucker's tool for coming up with innovative ideas about business. The tool is really simple. You try to define the basic assumptions on which a business or a product or a service on which something is based. The assumptions that people assume are true. An assumption is something that everybody knows is true and that underlies the whole system, the whole product. And you challenge those assumptions, but you can't challenge them until you know what they are. So, here are the assumptions and questions that Drucker asked and Drucker is asking us to ask. I'm not going to read all of them. They're on your screen and on this slide and the next two slides. But in general, you begin by asking what are the assumptions about the business environment? The business that we are in, the industry, the environment, the ecosystem, the social forces, the markets, the competitors, the technologies. How do we create value, and which of these assumptions are crucial. And of course the next step, what happens if you change a key assumption? In a moment, I'll give you an example. And in the specific business mission, how do we make a difference? How do we measure success? What drives our behavior? What do we believe is our mission? What if you change these assumptions? What if you change the mission? And then the core competencies. Notice that we're drilling down from the environment to the business, to the skills that we need to make our business or organization or our ideas successful. What do we assume about key skills? There are so many examples. IBM assumed that the key skill in making computers was in the hardware and so they let Bill Gates develop the operating system, the software. And Microsoft became a more valuable company than IBM. Because the software is the brains and the computer creates value with it's brains. Not so much the hardware. What are our assumptions about key skills, about leadership, about strengths and weaknesses? So in general, the method is to reveal the key assumptions, including ones that people don't even speak about because they're assumed to be true and then change them. For example, here is a small example and then I'm going to ask you to do a little exercise. Company called Netscape. Netscape created an early browser for browsing the web. And we all know that in business you sustain a business by creating a great product, Netscape browser was a great product. And then you change money for it, and Netscape gave it away. They gave it away. Millions of people downloaded it and used it for free. How can you make money by giving something away? The assumption that Netscape broke was that you have to charge for your product. And of course they did have a product, they had a software product for running workstations that they charge for, but they marketed, they got the name out by giving away their browser. So here's an action learning assignment I'd like you to try. Challenge your assumptions, choose a company you work for or you've worked for in the past, choose a product, choose a group of products, of a service, choose your own life. What are the assumptions on which this is based? What are the basic assumptions? Try to focus on the assumptions that are almost invisible because everybody assumes that they are absolutely true. Like you have to sell your product for money rather than give it away. And then assume that a key assumption is false. What are the creative implications? How can you come up with great ideas, great creative ideas, by simply breaking assumptions that everybody knows to be absolutely, absolutely true. This is part of the zoom out, zoom in Model. Zoom in on the assumptions, and then zoom out to change them and come up with wild, wild ideas. Like the bicycle that no has breaks, which turns out to be rather successful product, going back to the early days when bicycles really did have no brakes, no brakes and no gears. Here are some examples, some of these are recounted in Cracking the Creativity Code. This one, called A Hole in the Wall, is explained I think on page 45. The Hole in the Wall. And here's the story of A Hole in the Wall. So an Indian education innovator named Sugata Mitra tells the following story of an experiment he did. He did this in 1999. He wanted to address the problem of education in poor countries. How do you educate kids in very poor countries? Here's what he did. He took a touch screen computer, and he put it into a wall of a slum in New Delhi. It may have been a computer with a keyboard or whatever. But he inserted it, installed it in a wall in a very poor slum in New Delhi. And then he just left it. Kids there barely went to school, they didn't know English, they'd never seen a computer before, the language of the computer was English, had no idea what internet was. He connected it to high speed internet and he turned it on and he left it. And then he found something really interesting. An 8-year-old boy taught a 6-year-old girl how to browse. The kids learned amazingly quickly how to use this computer, even though they didn't know English, and made it do all kinds of things. And then he repeated the experiment in Rajasthan Indian province in the north. The children recorded their own music, they played it back to each other, and they did this in just four hours after seeing the computer for the first time. In another village, the boys assembled a video camera and tried to take a picture of a bumble bee. And they downloaded this information from a Disney website. In other words, children have incredible capacity to learn and the reason is something we can all learn from. And this is highly relevant to card one, discovering ideas. Kids are unafraid of trying things, that's how they learn. It's how they learn to walk, how to talk, how to feed themselves. They try things and they fail and they try again. When they walk, they take a step and fall and they get up and try again. If they stopped trying after they fell the first time no human being would be able to walk. So lets learn from these kids. Let's be unafraid to take risks and try things and fall on our face, literally, and make mistakes, that's how we learn, that's how we create. Create wild ideas, try everything, break the assumptions that everyone knows are true and see what happens. And sometimes it really works and sometimes it doesn't. And a similar experiment was tried by another educator, Nicholas Negroponte an MIT professor. Who created the One Tablet Per Child project, after the One Laptop Per Child. Giving children tablets in remote village, again, without them knowing English or having access to schooling. So he provided tablet computers to children in a remote Ethiopian village and they of course knew no English. And in no time, these were Motorola X-O-O-M, Xoom tablets, and used with a charging system that could provide the electricities. Villages had no electricity. And once a week, a worker, representative Nick Raponi visited and swapped a memory card so they could see what the kids had done. And they did absolutely amazing things. Kids had never seen printed material, road signs, or even packaging that had words on them. And they dropped off clothes boxes containing the tablets, tape shut, no instructions. Kids open the box within five days they were using 47 apps per child. In two weeks, they were singing ABC songs in the village. Within five months they had hacked Android. The media lab had disabled the camera on the tablets. The kids figured out the camera, hacked Android, and figured out how to turn it back on. Children are amazingly creative. They are, because they try things. They learn by trying things, such a simple lesson. All of us were children. We all used to learn by trying things. Let's go back to that wonderful quality of children discovering the world by trying things and failing, and trying again. This ends Session 6. In our next session, Session 7, we're going to go on to discuss how to discover a great idea, some methods. And I'll tell you a story about how my colleague, Arie Ruttenberg discovered a really great idea.