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A couple of days ago Apple announced a new IPod Nano.  This one they say is better than the last one because it’s got a camera, FM radio and more memory. I thought to myself, didn’t they just announce a new IPod a few months ago? So I logged onto Yahoo finance to see what’s going on. I was right. They did announce a new IPOD and also a new Nano, a new Shuffle, a new ITouch and a new IPhone. All this innovation must be exhausting to the people that work there … and I wondered if it was really necessary, after all it must be very expensive.

But then I noticed something. Right next to these press releases was the stock price.  Do you know that if you invested a thousand dollars in Apple a year ago … it’d be worth two thousand dollars today. Apple stock has increased a hundred percent.

So, I wondered how this compared to General Motors? I entered the GM into the Yahoo Finance search engine and guess what I found out:  nothing.  GM doesn’t exist. It’s no longer a publicly traded company. It’s bankrupt.  So if you invested a thousand dollars in GM a year ago … it’d be worth … nothing. GM, for all intents and purposes, is dead.

What’s the difference? What did GM doing wrong? And what is Apple doing right? The answer – I think – is that Apple innovates for the customer and GM did not. And since an innovative idea is the solution to a well defined problem, the difference between Apple and GM lies in the problems they choose to solve. Apple solves customer problems. Each new product is a little better than the previous one, solving the problems customers had with the earlier versions. They’re innovating for the customer, giving me a reason to buy.

GM, on the other hand, is busy solving internal problems. Manufacturing problems. Labor union problems. Financing problems. Not driving problems. Not the problems of a commuter. I can’t think of a single innovation that’s come out of Detroit in the last couple of years that’s important to me the customer. They aren’t solving customer focused problems.

Of course, Apple better watch out, too. The other day my seventeen daughter Katie told me she needs a new cell phone. What’s wrong with your IPhone I asked? It’s so old school, dad. It’s embarrassing.

This is the age of innovation. Of choosing the right problems to solve.  Innovate or die, because somebody else will.

Most creative thinkers are afraid to admit to borrowing ideas. Others don’t talk about it because they don’t realize they’ve done it.  We’re taught that taking ideas is wrong.  We’ve developed a legal system that discourages it in the form of patents and trademarks. But the reality is that ideas are built out of existing ideas – all of them – that’s how the mind works.  You can’t make something out of nothing. However, you need to borrow and combine – not just borrow – just borrowing is stealing an idea.  You need to improve it by re-structuring it, adding or subtracting things to it, or reorganizing it.  Most of this happens in the subconscious, in the shadows of the mind, and so you don’t always know where the idea came from, even if you originated it.

Once you realize that creative thinking begins with copying … it changes your relationship with creative thought and sends you on a journey to find the solution to your problem instead of just sitting there waiting for an idea to “pop” into your head.  Einstein said, “The secret to creativity is knowing how to hide your sources.”

There are two elements to defining a creative idea:  1) one that’s new or different; and 2) one that’s useful. You could design a car with square wheels – it would be new and different – but it wouldn’t be very useful. In the book, I say that you build new ideas out of existing idea which is another way of saying that new ideas are “combinations” of existing ideas. To make them useful, you have to properly define the problem you’re trying to solve. An idea is the solution to a problem. For example, Sony invented the “Walkman” by combining a small tape player with a small pair of headphones — a unique combination that no one else had made – and used it to solve a portable entertainment problem.

The creative process begins with a problem. Identifying it. Understanding it. And then defining it and re-defining it. When I’m working on a concept development team we spend a lot of time on the problem.  The first chapter of my book is devoted to understanding problems and how to define them. For example, In the 1920’s Henry Ford defined his  problem as “building the least expensive car.” And he did and was very successful. But William Durant over at General Motors defined the problem a little differently, he said “let’s build a car that people can afford.”  This led to a huge innovation … the formation of GMAC and the financing of automobiles. GM was able to make much more interesting cars and make them affordable through monthly payments.

Of course, sometimes it’s a matter of returning to the problem, too. In other words, you’re working on solving one problem and realize that your solution is better suited to solving a completely different problem.  Thomas Edison was working on the telegraph when he realized that the solution he was constructing could be used to record voices, and so he changed his problem and began solving a voice recording probem.

Some of my favorite books:

Blink: The Power of Thinking without Thinking by Malcolm Gladwell (Little, Brown and Company, 2005). This is a book about thinking. It’s a book about rapid cognition, about how the mind can make good decisions with a ‘blink’ of the eye. It contains interesting insights supported by a compelling narrative. Borrowing Brilliance is targeted at a similar audience with the same kind of interesting insights, in this case about creative thinking, and supported by a personal narrative.

Six Thinking Hats by Edward DeBono (Back Bay Book/Little Brown: New York, 1985).  In this book, DeBono discusses critical thinking and how shifting a person’s point of view develops this thinking technique. While this book was not written specifically for the business marketplace it is widely read and widely regarded in these circles. Unlike Borrowing Brilliance, there is little or no discussion as to the source of ideas and much of it is not applicable to business problems.

The Innovators Dilemma: The Revolutionary Book that Will Change the Way You Do Business by Clayton Christenson (Collins, NY 1997).  This book is about business innovation and claims that to innovate a business must destroy its current business — thus creating the “dilemma”. Specifically, it is about using new technologies to make products cheaper, thus destroying the current markets. Unlike Borrowing Brilliance, it doesn’t address the source of ideas and the thinking processes one needs to employee in order to create them.

The Ten Faces of Innovation: IDEO’s Strategies for Defeating the Devil’s Advocate and Driving Creativity Throughout Your Organization by Thomas Kelley and Jonathan Littman (Currency, NY 2003). This book teaches how different perspectives (the faces) can provide new ideas. Its focus is specific to product design and development. Unlike Borrowing Brilliance, it doesn’t really address the source of new ideas nor does it layout a practical thinking process for innovation.

Last week I watched Steve Jobs take the stage in San Francisco to the delight of reporters, developers, entertainers and other guests. He was there to introduce Apple’s new IPOD line up, but the news of the day had nothing to do with new products or new features to existing products.  The news of the day was about Steve himself: What was he wearing? How did he look? What did he say? No other CEO is  as respected and revered as Steve Jobs. But why? What makes him so intriguing? What does Steve have that other don’t?

     The answer is, of course, a lot of things. But the one thing that sets him apart, the one thing that makes him so successful, is his ability to lead innovation, and more specifically his ability to know a good idea when he sees it. In the 1980’s he saw a demonstration at Xerox of the mouse and graphical user interface (GUI) and instantly recognized it as the perfect technology combination for the personal computer. He borrowed the idea and created the Mac. In the 1990’s he saw a demonstration of a new animation software program developed by George Lucas and company. He bought the company from Lucas and combined it with great storytelling and created Pixar and the first computer-animated feature film: Toy Story. And about ten years ago he saw the first MP3-player and recognized it as a truly innovative form or personal entertainment. He combined that with an integrated website (ITunes) and cutting edge industrial design from Jonathan Ive and created the IPod. Steve Jobs has what we call in the business: Creative Intuition. The ability to sense a good idea.

     This is a result, no doubt, of his contrasting personality traits. You see, Steve is notorious for being highly critical one moment and highly optimistic the next, often about the exact same idea. Over time, this gives him a sense of the idea he is looking for: it’s one that has “these traits” (from his optimistic viewpoint), but doesn’t have “those traits” (from his pessimistic viewpoint). You and I will never possess this skill to the same degree that Steve has, for it’s innate in his personality, but we can develop it by consciously doing what he does subconsciously. By being both optimistic and pessimistic as we develop new ideas and solve our own problems. As Jonas Salk, the inventor of the polio vaccine, said, “Intuition will tell the thinking mind where to look next.” And intuition, my friends, is the result of positive and negative judgments.

Borrowing Brilliance is about innovation and creativity and the title refers to the source of ideas:  that you build new ideas out of existing ideas.  Einstein said, “The secret to creativity is knowing how to hide your sources.”  But don’t misunderstand this, you simply borrow the materials and then use these materials to construct a new idea. I studied hundreds of creative thinkers, and their ideas, and was able to trace the source of their great ideas from other ideas they borrowed.  For example, Charles Darwin borrowed ideas from geology and economics in order to construct an idea for biology.