Sunday, October 30, 2011

Five Challenges Facing Marketing

3:30 AM Wednesday October 26, 2011
by David Aaker

The marketing field is faced with several challenges that for many firms will require a transformation in its capability and charge. Among them are the following five.

First, marketing needs to lead in substantial or transformational innovation that will result in new offerings that will define new categories or subcategories. Marketing focused on "my brand is better than your brand" strategies supported by incremental innovation and conventional programs rarely creates sales growth because markets have a lot of inertia. The only way to grow is through big idea innovation that will create enhancements or augmentations of the offering that will be regarded by customers as "must haves." That is what brands like Enterprise Rent-A-Car, Prius, Zappos.com, SalesForce.com, Dreyer's Slow Churned Ice Cream, Best Buy's Geek Squad, iShares, ESPN, and hundreds of others have done.

Second, marketing needs to be strategic rather than tactical and earn an influential place at the executive table. Marketing should own three key drivers of strategy. One is customer insights which should enable growth initiatives and be the basis for strategic resource allocation. Another is the value proposition, a centerpiece of business strategy. Finally, marketing should own brand strategy which should both inform and enable the business strategy. Although more and more firms have accepted the CMO on the executive team, there are still many others for which marketing is still relegated to a tactical role.

Third, marketing needs to get control of the product, country, and functional silos to foster cooperation and communication rather than competition and isolation. Firms no longer have the luxury to see opportunities for consistency and synergy lost. In Lou Gerstners' classic turnaround of IBM one of his boldest moves was to attack the product and country silo culture. It is especially important to overcome functional silos to create integrated marketing programs where some functional areas accept a supporting rule even when that is not what they are accustomed to. Jim Stengel, former P&G CMO, made some progress by allowing the functional area with the best big idea to become the team leader, but the goal of integrated marketing has been long elusive.

Fourth, marketing needs to inject energy and involvement into their brands. A little known fact is that brand equity across the world has been declining for over a decade. The exception are those brands with energy. Energy is an imperative. If a brand cannot provide product energy like Apple, Dove, and others have done, the need is to create or find something with energy and attach the brand to it. Think of the Avon's "Walk for Breast Cancer" or Home Depot's alignment with "Homes for Humanity."

Finally, marketing needs to be elevate its game tactically. With the fragmentation of the media options, the dynamics of social media, and the proliferation of brands and offerings, there is so much clutter and complexity that nothing less than great marketing and exceptional offerings will break out. This means having access to creative tools, people willing to innovate, and a broad array of marketing modalities. One of the reasons that Hyundai is such a hot car brand is because of their great marketing programs such as "Fluidic Sculpture Design," the "Hyundai Assurance Program;" and the Hyundai Uncensored campaign (where 125 customers were given cars and their uncensored comments were posted).
There are more, but if marketing can influence or deliver real offering innovation, a marketing-influenced business strategy, control of the silos, energy and involvement, and great tactical marketing, it will be relevant to the organization and will see success in the marketplace.

Saturday, October 29, 2011

Beware the Digital Disruptors: They’re Coming for Your Industry

by James L. McQuivey
James L. McQuivey, Ph.D. is a Vice President and Principal Analyst at Forrester Research serving Consumer Product Strategy professionals. Follow him on Twitter at @jmcquivey.

Growing up in the ’70s, I was the world’s biggest fan of The Six Million Dollar Man. Every Sunday night at 7 p.m. you could find me glued to our Trinitron TV to watch Steve Austin battle every villain from Bionic Sasquatch to the evil Dr. Dolenz. The appeal of the show was simple: Amplified by technology, the Bionic Man is better, stronger, and faster than his enemies.

It turns out to be a morality tale for our own day. But you are not the bionic man in the drama I’m unfolding — you are his target. Because while you were carefully planning your business strategy, hundreds — if not thousands — of individuals and competitors have been exploiting technology to make themselves better, stronger, and faster than you.

We call these people digital disruptors. And they’re coming right for you.

No matter what industry you are in, you are their target. Where you could once dismiss digital disruption as the sole province of the music or other media industries where it destroyed billions in value, digital disruption has now expanded. These disruptors employ technologies — and the platforms they enable — to build better products than you can, establish a stronger customer relationship than you have, and deliver it all to market faster than you ever thought possible.

Oh, and it doesn’t cost anywhere close to six million dollars for them to get started. I offer Lose It! as one of many case studies worth considering. Targeting the weight loss and fitness business — one of the most analog industries on the planet — Lose It! is disrupting the more than $40 billion Americans spend on weight loss each year. It’s a costly industry to enter — think of Jenny Craig’s marketing budget alone, then add its hundreds of physical locations, prepared meals, and all the infrastructure to support the entire enterprise. So while franchises like The Biggest Loser have succeeded in entering this business recently, they have done so at great cost.

Meanwhile, a single app that helps dieters keep track of the calories they consume on their smartphones has gone from 0 to 7 million downloads in just a few years. FitNow, the company behind the app, pulled this off with four employees, establishing an unheard of customer-per-employee metric of 1.75 million.

This is digital disruption at its finest: better, stronger, faster. The app got to market quickly, partly because as a digital disruptor, FitNow could afford to launch something that didn’t try to solve all the problems in the weight-loss world. As Charles Teague, CEO, told me recently, “Let’s not pretend that we know the endgame here. Let’s do the least amount of features to know if it will work. Then improve it if people use it.” And improve it they have, adding fitness tracking and more recently a robust social community of like-minded dieters.

Because it sounds so easy, a CEO I shared this with asked me why, if digital is so quick and dirty, his company’s website redesign was over time and over budget. I told him it was precisely because he staffed up his business under assumptions about design and functionality that were true in 2005 but are no longer the case. Digital disruption has even disrupted the digital businesses that preceded them.

While digital disruptors are better, stronger, and faster, they are not untouchable. Their ease of entry comes from the fact that traditional barriers have fallen to zero. That means your direct cost to emulate their practices can also be low.

That’s why I recommend you steal the digital disruptor’s handbook. Use the iPad, the Kinect, and whatever platform is next to build a digital bridge to your customers. Like with Lose It!, your bridge must engage customers more often than your current product can, packaging and delivering benefits that you didn’t realize were part of your consumer contract because before now, they weren’t. You have to change your understanding of your product so you can then change your customer’s understanding of it as well. This will require better thinking than you currently do – I previously explained how digital disruptors take advantage of a type of thinking called “innovating the adjacent possible.” It’s crucial to generating more ideas more quickly so that you can find the nearby opportunities that will succeed while quickly culling those that will fail.

There’s more to do, but before you can even begin, you have to know: Are you ready to do this? Does your company have the energy, skills, and policies to turn into a disruptor or are you more likely to be displaced by the digital disruptor nearest you?



Innovation Quote

"No one can possibly achieve any real and lasting success or get rich in business by being a conformist."
--J. Paul Getty,American industrialist

Why Digital Talent Doesn’t Want To Work At Your Company

OCTOBER 27, 2011
BY AARON SHAPIRO - FAST COMPANY : TOP BUSINESS STORIES


Why doesn't digital talent want to work at your company? It’s not because you’re a consumer packaged goods company, rather than Google. It’s not because you’re in Ohio instead of Silicon Valley. It’s not because your salaries are too low, or because you don’t offer free food and laundry services.

It’s because you’re not providing them the right opportunity. The talent you want would be happy to work in an un-air-conditioned garage in New Mexico if it meant the chance to change the world.

This, the opportunity to do great things, to make a real difference, is what drives most digital talent--whether they’re developers, designers, producers, marketers or business folks.

Most companies don’t offer this, so they skip your company and work somewhere that’s more innovative and exciting. End of story. But the good news is that you can offer them something exciting and great. The promise of changing a giant, behind-the-times organization into an Internet-savvy business is an incredibly exciting challenge and a big way for ambitious people to make an impact.

But it takes more than lip service to make the sale. Job candidates and new hires with digital chops must truly believe in the company’s dedication to digital transformation and they must see that they are empowered to make this change. Trouble is, many big businesses aren’t structured to deliver on this type of opportunity. The attributes of a soul-crushing, Sisyphean, anti-digital workplace run deep.

Digital talent won’t want to work at your company if:

Every element of their work will be poured over by multiple layers of bureaucracy.
Even if that’s how the rest of the company operates, it can’t spill into the digital department. In a technology environment, new products and businesses spring up daily and a new endeavor can go from conception to launch in a matter of months. Reining in the momentum will be read as inaction and a clear signal the company isn’t willing to grasp the new way of the world.

Mediocre is good enough. While clocking out at 5 p.m. is attractive to some, it will discourage digital talent. They want to be expected to do something great. They want to be pushed. They care about their work. Their leadership, and those they rely on to get things done, must match their appetite for success.

Trial and error is condemned. The freedom to try out new ideas allows employees to take initiative, make decisions, and learn from their mistakes. It also demonstrates an attractive and inspiring entrepreneurial spirit.Your company is structured so it takes a lifetime to get to the top, and as such there are no digital experts in company-wide leadership positions. Digital talent--often in their 20s and 30s--need to see a clear path for uninhibited career development that’s based on merit, not years spent, and that’s beyond the confines of the digital department. If they don’t, they won’t see a reason to stay with the company in the long term.

Your offices are cold, impersonal and downright stodgy. It may sound like it conflicts with the “you don’t need to be in Silicon Valley point,” but appreciate the nuance. A traditional office layout is designed to communicate power among certain individuals and barriers between departments. This does not support the collaborative ethos which is intrinsic to the web. Companies should do everything possible to provide the digital team friendlier, open office space. A location in a hip, young neighborhood (which surely exists in every mid- to large-sized city) is also a big plus.

When all of these digital-talent deterring points are addressed, company leadership has effectively and proactively demonstrated the company’s dedication to a digital transformation. It is at this time that their words, a broadly communicated firm stance on the significance of the company’s digital goals, will make the most impact. Without this conspicuous top-down support, politics in the organization or simply one influential disbeliever can hinder the effort, limit the extent of digital integration possible, and discourage valuable employees.

You need them more than they need you. Demand for their services is so high, they can afford to be finicky. If they don’t like where they’re working, another firm with a more attractive culture and more grand opportunity will quickly swipe them up. That could be your company. But it could just as easily be someone else.
Adapted from Users Not Customers: Who Really Determines the Success of Your Business (Portfolio), by Aaron Shapiro, CEO of HUGE, a digital agency that helps companies including PespiCo, Comcast, Target, HBO, and Unilever reimagine how they interact with their customers and manage their business in the online economy. Visit aaronshapiro.com.

Frame Your Problems To Create Better Solutions

Posted on October 23, 2011 by Paul Williams

When you’re looking to innovate, take advantage of an opportunity, or solve a problem… one of your first steps should be to clearly define or “frame” that opportunity or problem. Your frame is how you narrow and pinpoint what you choose to solve. Better framing leads to better solutions.

Think of it like a picture frame, it has in the center what you want to feature.

This old, wooden tugboat needs a lot of work. Among other things… an engine, new windows, paint… However, the first priority is to fix the huge hole in the hull. That’s our frame.

It doesn’t mean things outside the frame won’t be addressed, however, that big hole is the priority and our current area of focus.

But, let’s be honest. Determining the right focus isn’t always as clear as the hole in this tumbledown tug.

So, how can we really know what the frame should be?

One way to determine the right frame it to keep shifting perspectives. Take a look at the situation using different frame types, and test until you’ve found the right focus area.

You see movie directors doing this, forming a box with their thumb and index – framing to see how the scene will look on the screen… They keep shifting the perspective until they find what they want in scene.

We do the same thing with problem solving. However, instead of shifting the position of our hands, we shift: time, people, risk, resources, and our overall perspective.

Time shift – how would this look from the future?

•It’s x months from now, this decision worked well. What would we have accomplished?

•How would we have framed this x weeks ago?
People shift – see it from someone else’s point of view.

•How would our employees frame this?

•How would a client define the problem?
Risk shift – conservative to aggressive

•If we were unwilling to take a risk how would we define the problem?

•If we were a bunch of river boat gamblers, what would we say about this opportunity?
Resource shift – none to unlimited

•If money were no object, how would we define the problem?

•If we had to figure this out on a shoestring, how would we frame this?
Perspective shift – Brick, Wall, or Cathedral? Test whether we’re looking at this decision from the right perspective.

•Brick – should this decision only affect small, limited-focus procedural steps or changes?

•Wall – should this decision be focused on a limited part of an overall, or organizational issue?

•Cathedral – does this decision affect the organization as a whole?
Next time you or your team is faced with a challenge – even when the problem behind that challenge can seem fairly clear – try a few different frames before you settle on the final approach.

You may find different frame changes the look of the whole picture.

The Global Innovation 1000 2011: Why Culture is Key

Year after year, certain companies succeed in producing innovative new products and services, and in so doing generate superior financial results. As our annual Global Innovation 1000 study, now in its seventh year, has consistently demonstrated, the success of these companies is not a matter of how much these companies spend on research and development, but rather how they spend it. This year, we took under consideration two particular qualities — strategic alignment and a culture that supports innovation — that truly innovative companies have put in place that allow them to outperform the competition.

Every company among the Innovation 1000 follows one of three innovation strategies — need seeker, market reader, or technology driver. While no one or another of these strategies offers superior results, companies within each strategic category perform at very different levels. And, no matter a firm's innovation strategy — culture is key to innovation success, and its impact on performance is measurable. Specifically, the 44 percent of companies who reported that their innovation strategies are clearly aligned with their business goals —and that their cultures strongly support those innovation goals — delivered 33 percent higher enterprise value growth and 17 percent higher profit growth on five-year measures than those lacking such tight alignment.

Booz & Company also asked innovation leaders participating in the survey to name the companies they considered to be the most innovative in the world. For the second year in a row, Apple led the top 10, followed by Google and 3M. This year, Facebook was named one of the world’s most innovative companies, entering the list at number 10. In a comparison of the firms voted the 10 most innovative versus the top 10 global R&D spenders, Booz & Company found that the most innovative firms outperformed the top 10 R&D spenders across three key financial metrics over a 5-year period – revenue growth, EBITDA as a percentage of revenue and market cap growth

The 7 Iconic, Transparent, Empowering Business Buzzwords That Need To Die

BY FC Expert Blogger Tim PhillipsFri Oct 28, 2011

When I started writing a blog to support my book, Talk Normal: Stop the Business Speak, Jargon and Waffle, I had an inkling that many of the words I loathed were common in the offices where I was working.

But this could be an illusion: Once we’re bothered by something, we tend to notice it more. So it could be that the business buzzwords that make me cranky are no more significant than the guy who bumps my chair when he walks past--which, on second thought, isn’t a big deal, he’s been doing it for years.

Not so, it seems.

I started to run quick statistical analyses of the published language when readers requested an investigation, and found that many idiotic, annoying, or just useless buzzwords and phrases really have infested our inboxes in the last 10 years. Some words are fun or informative. These words are not. If you find that these catchwords frequently litter your conversations or presentations, it's probably time to consult a thesaurus.

•"Issue"
When did we stop having problems and decide to have “issues” instead? The ratio of problems to issues in our magazines and newspapers show that there are about three times as many issues per problem as there were 10 years ago. Are we really so fragile? After all, if we can’t call what’s happening to the economy at the moment a “problem,” we’re setting the bar pretty high for the problems of the future.


•"Passion"
The CEO of a firm emailed me to ask why all his interviewees claimed to be “passionate about marketing” these days. A quick Google check on what people are claiming to be passionate about in the last 24 hours: secured loan leads; transformation; rubbish; logistics; plankton. The recruiter’s question: “Are you passionate about...?” is now just a test to see how well we fake it. At least “passionate about plankton” would make a good T-shirt.


•"Unique"
As a Brit I can be proud that HMS Unique was, confusingly, built as one of 49 identical submarines. Don’t let anyone tell you that we didn’t ruin the language first. Yet, as I write, there have been 826 press releases claiming that something is “unique” in the last seven days. Everything, we must conclude, is now special in its own exquisite way.


•"Iconic"
We’re supposed to find a person or thing desirable, but we don’t know why. Iconicness seems to be a 21st-century phenomenon: Since 2000, we’re about eight times as likely to find something “iconic” in the press. Two areas in which this growth rate has been twice as fast: accountancy and solid waste. You can't make it up.


•"Role"
Our parents had jobs or, if they were lucky, careers. We entertain ourselves by claiming we have roles, as if our work is a personal soap opera. During the long boom, the ratio of roles to jobs went from 10:1 to about 4:1. You will not be surprised to learn that, since 2007, this ratio has returned to pre-2001 levels.


•"Transparency"
Six times as popular in the business press as it was in 2002; about one in 40 press releases claim it. It’s taking over “honesty” and “integrity,” maybe because you can claim transparency without any suggestion you’re doing something that improves anyone’s life. Note: The glass industry uses “transparency” in marketing less than the average, but the audit industry uses it ten times as often. Draw your own conclusions.


•"Empowerment"
Not a bad word in itself--but if I buy something from you, you are not “empowering” me. It’s a sneaky way of dodging what the wafflers call the brand promise: They didn’t say the jeans would make me a better person; their clothes just “empowered me” to lay claim to my own betterness. I get it: If my life is as crappy as it was before, it’s my fault. If it improves, all hail the denim.
Tim Phillips is a freelance journalist. He is the author of Talk Normal: Stop the Business Speak, Jargon and Waffle, Knockoff, Fit to Bust and co-author of best selling Scoring Points, all published by Kogan Page.

Tuesday, October 25, 2011

Good Quote

"Success breeds complacency. Complacency breeds failure. Only the paranoid survive” Andrew Grove - Intel CEO

What Every CEO Needs to Know About the Cloud."

OCTOBER 24, 2011
BY ANDREW MCAFEE : HBR.ORG

I have an article in the new (November 2011) issue ofHarvard Business Review called "What Every CEO Needs to Know About the Cloud." It's aimed at managers and executives who work outside the IT department and might not know or care very much about what goes on inside the IT department. So why should such people be interested in cloud computing?

Because it's going to change both how, and how well, their organizations work. This is a strong claim, and many find it a ridiculous one. After all, companies already have tons of technology; it's not like they're operating at present without hardware, software, databases, and networks. The move to the cloud is just a shift in where these resources are located. Executing this shift sounds like a classic job for the IT geeks, and one that needn't concern the rest of the company.
But it should, and it will. To see why, we need to look back at a previous technology shift. A century ago, manufacturing industries were in the middle of the long process of electrification — of replacing steam turbines with electric motors. Short-sighted factory owners considered this a simple substitution, and ignored the broader possibilities offered by electric power. These possibilities eventually included putting a separate motor on every machine in the plant, setting up overhead cranes, conveyor belts, and assembly lines, and converting factories from tall narrow buildings to long low ones.

All of these advances were invisible at the dawn of electrification. They only became apparent over time to the experimenters and innovators. Lots of successful incumbents were neither, and so lost out over time to their more productive and nimble rivals.

In the article, I argue that the same dynamic will play out around cloud computing. I explain that the cloud offers benefits at the level of the individual, the group, the data, and the application. And these are just the ones that we (or, more properly, I) can see right now. The article discusses, and largely dismisses, reliability and security concerns, and gives advice on how to start moving into the cloud.

Of course, one article can't come close to touching on all the important topics related to cloud computing, and I had to leave a lot out. I don't talk much about mobility and speed, for example, even though these are critically important subjects in business today, and ones where the cloud offers advantages.

Technology has finally caught up with workers who don't sit at the same desk all day, every day. We now have laptops, notebooks, tablets, and smartphones, and a lot of us (most of us?) use them pretty heavily because we're mobile — we move around during the workday and hit the road on business trips.

Thanks to the cloud, our data, documents, applications, communications, and social networks can come along with us, and be available almost no matter where we are. Without the cloud, mobility and the proliferation of devices would inevitably lead to severe fragmentation (where did I put that document?) and frustration. With it, we can be productive virtually everywhere.

We can also be faster. When everyone on a team is online and interconnected no matter where they are, and when they all have access to the same information, they can act more quickly. The delays, redundancies, and misunderstandings that plague so much group work can be reduced. As the pace of business continues to increase, the ability to make good decisions faster becomes more critical, and the cloud becomes more attractive.

The cloud is not the answer to all business problems by any means. But as I hope to demonstrate in the article, it is a significant advance, and it is inevitable. The future path of business is never clear, but it is cloudy.

Saturday, October 22, 2011

Five Reasons Companies Fail at Business Model Innovation

http://itssaulconnected.com/archives/2011/10/five-reasons-companies-fail-at-business-model-innovation/

The Five Competitive Forces That Shape Strategy - Harvard Business Review

The Five Competitive Forces That Shape Strategy - Harvard Business Review

Moving from Transaction to Engagement













Moving from Transaction to Engagement

HBR Blog Network.
R “Ray” Wang
Thursday October 20, 2011
by R “Ray” Wang





Mobile enterprise, social business, cloud computing, advanced analytics, and unified communications are converging. Armed with the art of the possible, innovators are seeking to apply disruptive consumer technologies to enterprise class uses — call it the consumerization of IT in the enterprise. The likely results include new methods of furthering relationships, crafting longer term engagement, and creating transformational business models. It's part of a shift from transactional systems to engagement systems.

These transactional systems have been around since the 1950s. You know them as ERP, finance and accounting systems, or even payroll. These systems are designed for massive computational scale; users find them rigid and techie. Meanwhile, we've moved to new engagement systems such as Facebook and Twitter in the consumer world. The rich usability and intuitive design reflect how users want to work — and now users are coming to expect the same paradigms and designs in their enterprise world.

Engagement systems share nine common traits
A few thought leaders have helped drive the thinking on systems of engagement. Geoffrey Moore has discussed how systems of engagement will drive knowledge worker effectiveness and productivity. Dion Hinchcliffe of Dachis group details the transition from systems of record to systems of engagement in how the social web and open internet are changing business. As with the shift to the Internet, organizations that miss this shift from transactional systems to engagement systems will face dire consequences.

Our initial research identifies nine characteristics of engagement systems that differ from the transactional systems of yesteryear (see the table below for a historical view):

1. Design for sense and response. Engagement systems "listen" to assess status, sentiment, and context. For example, detection of negative sentiment could lead to a discount on your next purchase or a proactive phone call to address an issue. These systems go beyond transactional systems that focus on reliability, stability, and continuous improvement.

2. Address massive social scale. Engagement systems seek to master social networks. Social scale requires constant feedback from networks of people and objects. LinkedIn is an example of how we connect, collaborate, and share with each other in a career aligned social network. Transactional systems focus on addressing massive computing scale.

3. Foster conversation. Engagement systems support two-way conversations. Chat, video, and sharing features enable conversations among individuals, teams, and even machines. Transactional systems push one-way communications in a dictatorial approach

4. Utilize a multitude of media styles for user experience. Engagement systems embrace the multi-media, social-led user experience. Media channels include Twitter, video, text, and "likes." Transactional systems limit themselves to machine based interfaces.

5. Deliver speed in real time. Engagement systems focus on real-time speed. Users can see activity streams, real-time alerts, and notifications on all their devices. Transactional systems aim for just-in-time delivery.

6. Reach to multi-channel networks. Engagement systems touch corporate, personal, and machine based networks. A Skype call or instant message reaches out to both the corporate directory and your own personal network. Transactional systems narrowly focus on departmental and corporate networks.

7. Factor in new types of information management. Engagement systems embrace loosely structured knowledge flows. Comments, audio files, videos, and chats don't fit neatly into corporate relational tables. Transactional systems ensure reliability of highly structured records and data.

8. Apply a richer social orientation. Engagement systems by nature rely on heavy social orientation. The design natively incorporates social media tools such as RSS feeds, LinkedIn, Facebook, and Twitter. Transactional systems express a tangential or just plain awkward social orientation.

9. Rely on smarter intelligence. Engagement systems are powered by business rules and complex event processing engines. Users can change the flow of a task using visual tools. Transactional systems remain in a hard coded, rigid structured approach.

Experiential and personal fulfillment systems will power the next waves of innovation
The evolution to engagement systems from transactional systems will usher in an era of experiential systems which apply context to deliver agility and flexibility. Early categories in this space include gamification platforms, context aware services, and decision support systems.

As we envision the future, we see personal fulfillment systems playing a key role in breaking down the corporate and consumer walls. These people-to-people networks embrace an intention-driven design point to meet the challenge of delivering on a massive individual scale. Pattern-based models will drive the intelligence of these systems. Early examples include the work that Doc Searls began in 2006 on what he's dubbed vendor relationship management. VRM provides customers with the means to bear their side of the relationship burden. Organizations that fail to make the leap to engagement systems will fall behind. Those that seek to drive innovation will move to experiential systems and push the envelope to build out personal fulfillment systems.

User-Led Innovation Can't Create Breakthroughs

User-Led Innovation Can't Create Breakthroughs

Just Ask Apple and Ikea Companies should lead their users, not the other way around.The user is king. It’s a phrase that’s repeated over and over again as a mantra: Companies must become user-centric. But there’s a problem: It doesn’t work. Here’s the truth: Great brands lead users, not the other way around.

The Apple and IKEA way
Take Apple. One evening, well into the night, we asked some of our friends on the Apple design team about their view of user-centric design. Their answer? “It’s all bullshit and hot air created to sell consulting projects and to give insecure managers a false sense of security. At Apple, we don’t waste our time asking users, we build our brand through creating great products we believe people will love."

Another hyper-growth brand, IKEA, has the same belief. One of us had the privilege of working closely with IKEA’s global brand and design leaders; at IKEA the unspoken philosophy is: “We show people the way.” IKEA designers don’t use user studies or user insights to create their products. When I asked them why, they said “We tried and it didn’t work.”

Of course, neither Apple nor IKEA will say this publicly since they are both extremely closed companies and would risk offending users (and the design community) by speaking out against user-centeredness.

And since no one will speak up, the false value of the user-as-leader has spread.

Be a Visionary
If users can’t tell a company what to do, what should companies do instead? The best brands are all guided by a clear vision for the world, a unique set of values, and a culture that makes them truly unique and that no user insights could ever change.

They define their own rules.The vision must come first. This could come from the client, designers, a team, an organization, or a design leader. It needs to be clear and applied consistently over the project.

Create an icon
The same goes for truly extraordinary products, the icons of the world. There are three types of iconic products and none of them are made through user-driven design.

Democratic Icons
These could also be termed “slow” icons. These products take a long time to become icons. They are usually of plain or simple design, created to fulfill a certain function, such as the paper clip, tea bags, potato peelers, and the mailbox, all of which are valued for their functionality, rather than their aesthetics. Over time, users become attached to them and eventually, these products gain so much meaning that they start to gain cultural currency and layers of connotations. These icons are generally easily available.

Design Icons
This is when a familiar product such as a chair or a car whose design is particularly shape-driven will get a makeover, with an innovative design that alters the look of this familiar object. The first reaction of the mass audience is often negative, claiming the object “looks weird.” But over time, the audience adapts to the change and comes to love the product for its personality; it attains cultural relevance and becomes iconic. Hans Wegner's Y-chair and the Aeron chair are typical examples of design classics that were adopted late.

Instant Icons
Instant may be familiar products or offer a familiar function like the design icons, but something about their design that make them essentially new products. They open new markets and create new demand—just think of the Polaroid camera, the Sony Walkman, the Flip Camera, the Blackberry, and the Apple iPod.

Why it’s harmful to listen to the users
But can’t you create radical new products based on what the user wants? Why do the most innovative brands not care about what users want?

Users insights can’t predict future demand
The demand for something fundamentally new is completely unpredictable. Even the users themselves have no idea if they will like an entirely product before they start using it (and maybe, only after years of use). Demand for something new cannot be predicted.

The world is driven forward by improbable, high-impact events, both negative and positive: September 11th, the subprime crisis, or the explosive rise of social media. These events completely changed the world and were difficult to predict—perhaps a few individuals saw a glimpse of the future, but the majority of people were totally unprepared. It’s the same with new products and brands—you can’t foresee what will be successful.

This is a very scary thought for most business leaders, but the good news is that there are ways to deal with it. All creative industries are dependent on the constant launch of radically new products. And the music, movie, publishing, and fashion industries have tried to find stability in a sea of unpredictability by constantly putting out new products and seeing what sticks.

They have learned to hire the best and the most creative people in the world (whether it’s directors, music producers, or authors), worked hard to launch a broad portfolio of products and to speed up the time it takes their products to reach the market.

User-centered processes stifles creativity
Could you imagine Steven Spielberg starting out new film projects with intense user studies and insights? Not really. There is a reason why Spielberg and all other profoundly creative people don’t work in a user-centered way. The user-centered process is created as linear rational process for innovation and that’s why it’s so popular among managers.

But as studies of successful innovations and creativity shows, creating something new is a chaotic, unpredictable, frustrating, and very, very hard process. And most of all, it’s the result of extraordinary efforts and visions of a few extremely talented people. These creative people will feel limited and bored, not inspired, if they have to start out a creative process with a lot of user knowledge. Their inspiration comes from a multiple of sources and is highly individual.

Creating a formula will always be in vain and won’t result in something really new.

User focus makes companies miss out on disruptive innovations
Focusing on users will lead companies to make incremental innovations that typically tend to make the products more expensive and complicated and ironically, in the long run, less competitive.

Radical innovations typically gain traction in the margins of a market and the majority of customers (at least in the beginning) will dislike change. If a company bases their decisions on user studies, they will conclude that most radically new innovations are not rational to pursue. This often means that companies miss out on new growth markets that can end up eventually eliminating their business.

The same logic applies to branding. A company will always go for very small incremental changes in their branding efforts if they base their decision on user input. In the short run, minor changes pleases their users. In the long run, it means the big brand will be run over by bolder, often smaller, and more innovative brands that redefine an industry.

User-led design leads to sameness
Even if user insights were useful, it isn’t a competitive advantage. Even the most advanced users studies are now widely available. Most companies have conducted these studies and they have had the same insights about their users as you have. Therefore, product strategies based on studies will tend to be similar to their competitors. The result is a sea of sameness.

This isn’t a theoretical point—most industries are characterized by very similar products and brand positions, partially because companies have listened too much to their users. Branding is really about differentiation, about standing out. User centeredness leads to the opposite, similarity.

It’s time for brands to step up and trust themselves again.

Does User Centered Design Yield Innovation?

In Search of Innovation
October 20, 2011 • 3 Comments • •

A few months back Fast Company’s Co.Design blog published a controversial post that triggered a lot of discussion. In their article provocatively titled User-Led Innovation Can’t Create Breakthroughs; Just Ask Apple and Ikea, Jens Martin Skibsted and Rasmus Bech Hansen wrote:

“[User-centered design] doesn’t work. Here’s the truth: Great brands lead users, not the other way around.”
Skibsted and Hansen cited Apple and IKEA as some of the most innovative brands that don’t follow the user-centric design model. They say that their friends in the Apple design team spoke out against user-centric design because it’s “a waste of time”, and similarly at IKEA because “it doesn’t work.” They argued that brands have to take the lead in innovation with a strong and consistent vision, and outlined several reasons why it’s actually detrimental to listen to your users.

I have to admit, their examples are compelling, but are they correct? How do we reconcile their claims with what we know about the value of design research and user-centered design?

What is innovation anyway?
Let’s first define what we mean when we say innovation. If we go by the textbook definition, innovation in short is a renewal or improvement on something—e.g. a process, system or product—that changes the way people make decisions and do things, outside their norm. In other words, it has to be something new and useful enough for people to adopt en masse, otherwise it’s just another useless invention. Most often, these innovations are small and incremental: cars keep getting faster and more fuel efficient; TVs keep getting bigger and thinner; iPads keep getting faster and sexier—you get the idea. But sometimes they can be radical and lead to revolutionary breakthroughs: automobiles replacing horse-drawn buggies as the primary mode of transportation; televisions replacing radios as the dominant home entertainment medium; iPads replacing netbooks as the best-selling ultra-portable computing device.

So what does this all mean?
Let’s go back to the original question. Can UCD lead to breakthroughs? I want to make the claim that in most cases the short answer is no—that UCD alone is not enough. In a nutshell, UCD is about listening to the users, analyzing their problem, and providing solutions that meet their needs. These methodologies can often lead to incremental innovations—that is, incrementally improving and optimizing pre-existing solutions. But what about radical innovation? I think the answer lies in how the pioneers of innovation did it in the past.

A catalyst for innovation
Let’s take a look at Henry Ford for example. He is famously quoted to have said, “If I had asked people what they wanted, they would have said faster horses!” However, what most people forget is that Ford was an engineer and an experimental hobbyist. He was experimenting with gasoline engines that he eventually put on four bicycle wheels. He called it the Ford Quadricycle and it predated the first Model T by about 12 years. Nobody knew what a “car” was, let alone find any use for it.

Here’s what I’m trying to get at: the man responsible for one of the greatest innovations of our time had, what I would like to call, a tinkerers’ personality. Someone who was always curious and loved working on things. And it wasn’t just Ford; Thomas Edison, while working on improving the telegraph transmitter, heard noises coming from the paper tape that resembled spoken words. He had a hunch that telephone messages could be recorded in a similar way and, after a lot of tinkering, eventually created the phonograph. I believe this tinkerers’ personality is common among the world’s greatest innovators and was a catalyst for a lot of the radical innovations of the past.

Finding the balance
Adam Richardson, Strategy Director for Marketing at Frog Design, sums up the challenge of innovation this way:

“[ … ] the pendulum has swung so much toward doing user research that we (as a profession) risk losing the magic that comes from conceptual thinking. The seductiveness of evidence and insight that comes from design research can push inspiration, intuition, hypotheses, hunches and non-linear thinking to the sidelines. Analysis overwhelms creativity.”
I’m inclined to agree with this sentiment. I surmise that the pioneers of innovation really did have inspiration, intuition, hypotheses, hunches and non-linear thinking on their side. These are traits I would consider a part of a tinkerers’ personality.

In a recent article Don Norman, one of the pioneers of the UX field, points out that it’s sometimes good to act first, and do the research later. In our search for innovation, it is dangerous to swing the pendulum too far in any one direction. Too far towards research and we get overly deterministic, stifling design; too far towards experimentation and we get arbitrary and open-ended design. If we can strike a balance between creating opportunities that foster tinkerers and deploying the proven processes of UCD in everything that we do, I believe we are at least on the right path to doing more and more innovative work.

Friday, October 21, 2011

10 strategic technologies you need to keep your eye on

10 strategic technologies you need to keep your eye on
By Nur Bremmen: Staff reporter

A strategic technology is defined as a technology that can have a significant impact on a company. It may be an existing technology that has matured or become suitable for a wider range of uses. It may also be an emerging technology that offers a strategic business advantage for early adopters or with potential for significant market disruption in the next five years.
Here are 10 top strategic technologies you need to keep your eye on:
1. Media Tablets. Users can choose between various form factors when it comes to mobile computing. No single platform, form factor or technology will dominate and companies should expect to manage a diverse environment with two to four intelligent clients through 2015. IT leaders need a managed diversity programme to address multiple form factors, as well as employees bringing their own smartphones and tablet devices into the workplace.
Organisations will have to come up with two mobile strategies — one to address the business to employee (B2E) scenario and one to address the business to consumer (B2C) scenario. On the B2E front, IT must consider social goals, business goals, financial goals, and risk management goals. On the B2C front, which includes business to business (B2B) activities to support consumers, IT needs to address a number of additional issues such as surfacing and managing APIs to access enterprise information and systems, integration with third-party applications, integration with various partners for capabilities such as search and social networking, and delivery through app stores.
2. Mobile-Centric Applications and Interfaces. The user interface (IU) paradigm in place for more than 20 years is changing. UIs with windows, icons, menus, and pointers will be replaced by mobile-centric interfaces emphasising touch, gesture, search, voice and video. Applications themselves are likely to shift to more focused and simple apps that can be assembled into more complex solutions. These changes will drive the need for new user interface design skills.
Building application user interfaces that span a variety of device types, potentially from many vendors, requires an understanding of fragmented building blocks and an adaptable programming structure that assembles them into optimised content for each device. Mobile consumer application platform tools and mobile enterprise platform tools are emerging to make it easier to develop in this cross-platform environment. HTML5 will also provide a long term model to address some of the cross-platform issues.
By 2015, mobile web technologies will have advanced sufficiently, so that half the applications that would be written as native apps in 2011 will instead be delivered as web apps.
3. Contextual and Social User Experience. Context-aware computing uses information about an end-user or objects environment, activities, connections and preferences to improve the quality of interaction with that end-user or object. A contextually aware system anticipates the user’s needs and proactively serves up the most appropriate and customised content, product or service. Context can be used to link mobile, social, location, payment and commerce. It can help build skills in augmented reality, model-driven security and ensemble applications. Through 2013, context aware applications will appear in targeted areas such as location-based services, augmented reality on mobile devices, and mobile commerce.
On the social front, the interfaces for applications are taking on the characteristics of social networks. Social information is also becoming a key source of contextual information to enhance delivery of search results or the operation of applications.
4. Internet of Things. The internet of things (IoT) is a concept that describes how the internet will expand as sensors and intelligence are added to physical items such as consumer devices or physical assets and these objects are connected to the internet.
The vision and concept have existed for years, however, there has been an acceleration in the number and types of things that are being connected and in the technologies for identifying, sensing and communicating. These technologies are reaching critical mass and an economic tipping point over the next few years. Key elements of the IoT include:
 Embedded sensors: Sensors that detect and communicate changes are being embedded, not just in mobile devices, but in an increasing number of places and objects.
 Image Recognition: Image recognition technologies strive to identify objects, people, buildings, places logos, and anything else that has value to consumers and organisations. Smartphones and tablets equipped with cameras have pushed this technology from mainly industrial applications to broad consumer and enterprise applications.
 Near Field Communication (NFC) payment: NFC allows users to make payments by waving their mobile phone in front of a compatible reader. Once NFC is embedded in a critical mass of phones for payment, industries such as public transportation, airlines, retail and healthcare can explore other areas in which NFC technology can improve efficiency and customer service.
5. App Stores and Marketplaces. Application stores by Apple and Android provide marketplaces where hundreds of thousands of applications are available to mobile users. Gartner forecasts that by 2014, there will be more than 70- billion mobile application downloads from app stores every year.
This will grow from a consumer-only phenomenon to an enterprise focus. With enterprise app stores, the role of IT shifts from that of a centralised planner to a market manager providing governance and brokerage services to users and potentially an ecosystem to support entrepreneurs. Organisations should use a managed diversity approach to focus on app store efforts and segment apps by risk and value.
6. Next-Generation Analytics. Analytics is growing along three key dimensions:
1.From traditional offline analytics to in-line embedded analytics. This has been the focus for many efforts in the past and will continue to be an important focus for analytics.
2.From analysing historical data to explain what happened to analysing historical and real-time data from multiple systems to simulate and predict the future.
3.Over the next three years, analytics will mature along a third dimension, from structured and simple data analysed by individuals to analysis of complex information of many types (text, video, etc…) from many systems supporting a collaborative decision process that brings multiple people together to analyse, brainstorm and make decisions.
Analytics is also beginning to shift to the cloud and exploit cloud resources for high performance and grid computing.
In 2011 and 2012, analytics will increasingly focus on decisions and collaboration. The new step is to provide simulation, prediction, optimisation and other analytics, not simply information, to empower even more decision flexibility at the time and place of every business process action.
7. Big Data. The size, complexity of formats and speed of delivery exceeds the capabilities of traditional data management technologies; it requires the use of new or exotic technologies simply to manage the volume alone. Many new technologies are emerging, with the potential to be disruptive (e.g., in-memory DBMS).
Analytics has become a major driving application for data warehousing. One major implication of big data is that in the future users will not be able to put all useful information into a single data warehouse. Logical data warehouses bringing together information from multiple sources as needed will replace the single data warehouse model.
8. In-Memory Computing. The use of flash memory in consumer devices, entertainment equipment and other embedded IT systems is huge. In addition, it offers a new layer of the memory hierarchy in servers that has key advantages — space, heat, performance and ruggedness among them.
Besides delivering a new storage tier, the availability of large amounts of memory is driving new application models. In-memory applications platforms include in-memory analytics, event processing platforms, in-memory application servers, in-memory data management and in-memory messaging.
As cost and availability of memory intensive hardware platforms reach tipping points in 2012 and 2013, the in-memory approach will enter the mainstream.
9. Extreme Low-Energy Servers. The radical new systems being proposed, announced and marketed by mostly new entrants to the server business will take the buyer on a trip backward in time. These systems are built on low-power processors typically used in mobile devices.
The potential advantage is delivering 30 times or more processors in a particular server unit with lower power consumption vs. current server approaches. The new approach is well suited for certain non-compute intensive tasks such as map/reduce workloads or delivery of static objects to a website. Most applications will, however, require more processing power, and the low-energy server model potentially increases management costs, undercutting broader use of the approach.
10. Cloud Computing. Cloud is a disruptive force and has the potential for broad long-term impact in most industries. While the market remains in its early stages in 2011 and 2012, it will see the full range of large enterprise providers fully engaged in delivering a range of offerings to build cloud environments and deliver cloud services.
Oracle, IBM and SAP all have major initiatives to deliver a broader range of cloud services over the next two years. As Microsoft continues to expand its cloud offering, and these traditional enterprise players expand offerings, users will see competition heat up and enterprise-level cloud services increase.
Organisations are moving from trying to understand the cloud to making decisions on selected workloads to implement on cloud services and where they need to build out private clouds. On the private cloud front, IT will be challenged to bring operations and development groups closer together using “DevOps” concepts in order to approach the speed and efficiencies of public cloud service providers

Tuesday, October 18, 2011

Trends Shaping Future Innovation

Trends Shaping Future Innovation
Posted on October 17, 2011 by Paul Hobcraft


In the last week or so I took a step back to look at the emerging trends around innovation. It certainly seems to have a bright future but its management is growing in complexity. It now needs a deeper understanding than ever. Are we achieving that?

My viewpoint on observing different innovation dilemmas:

•Innovation used to be about product, technology and R&D but it is far more now about value and anything that carries value. It is about creativity and entrepreneurship and it is even more tied to a clear vision today than ever, so it does become a vital part of the culture of the company. Innovation and its potential value generation have certainly broadened out in options and needs even more to be tightly integrated with the strategy- how different types of innovation are aligned is really critical. I think many organizations are failing badly on this alignment recognition.
•The growing appreciation that richer opportunities are to be found across the entire value chain by how we manage and view this. Making the strategic choice of what should remain in house as a contributor to the core and which can be outsourced to specialists better equipped and more focused on that part. This is making innovation far more complex and will challenge everyone but it can be very liberating and more rewarding providing the vale can be recognized and leveraged effectively …in faster and more relevant innovations that deliver from the core or adjacencies or through others better equipped to add their value. The key to outsourcing is resolving the questions of can this be effectively coordinated on who manages what, and who owns what, and how it is exploited, for the added value and impact this can offer each party.
•There is a clear recognition that defining real value lies more at the customer point and not within an organization in the R&D lab, as has been the past practice. Getting the customer involved as early as you can from discovery to delivery- the end to end of innovation- extracts greater potential value. There has been a growing shift for innovations to meet exact customer needs and also discover their unmet needs and then working back to developing the solutions. This increased customer focus will continue by making them more central in any web of co-creators and co-creation activities that needs to be undertaken around innovation discovery and its final delivery.
•External parties are seeking more involvement in a ‘joint’ innovation processes and the development process as early as they can. Partners are becoming increasingly reliant on each other to become a critical contributor or component provider to resolve more complex problems. Understanding these mutual dependencies is important to be recognized and actively managed in new collaborative ways.
•We have seen some really dramatic shifts in research techniques to know more of what ‘pulls’ and ‘connects’ with consumers. Customers are also looking to become more engaged and involved in their products and services, in what they expect and wish to be associated with. Managing these dynamics and often the emotional mix is hard and often frustratingly complex, to decipher and interpret. The new work is to be positioned as the ‘orchestrator’ of these dialogues across the organization and in drawing in through collaboration with the partners, by constructing the conduits and business platforms where the flow of exchanges takes place where new concepts evolve.
•The shift in emphasis to the customer makes a really compelling case for increased emphasis to be made on trend spotting, scouting, aligning and recognizing behavioural changes so as to make insights a real core of your business, more the source of those ideas than leaving ideas simply emerging from within an organization. Stringing together an often diverse set of signals calls for higher capability in pattern recognition and appreciating more about complex adaptive systems and the part they play. These are where dynamic networks of interactions and relationships merge and adapt differently, so individual and collective behaviour changes as a result of the experience, leading to emerging new opportunities to explore.There is an increasing need to manage a diverse group of collaborators across a common process. Often these parties might not want or need the same end-result but do need each other to ‘combine’ for a given result. This will benefit their individual businesses and add new dimensions in this collaboration space, to then deliver different outcomes than the existing solutions in place today fail to do. There is and real value of combining and working through a common business platform to achieve individual and collective aims and equally enhance the total delivery experience (Delivering Applications around Android are a good example here or Apples developer platform). Platforms bring together developers, providers and customers that can scale or contract accordingly and if well managed can drive business strategy in dramatically new ways.
•Building a more robust ‘activity system’ into managing innovation, beyond just simply pipelines and portfolio’s needs thinking through. It requires a more open logic model to be articulated and built around so as to allow for more early ‘open’ thinking, exploring and investigating multiple options. Far too often an idea is screened out to early and not explored in a wider context of ‘seeing things differently’. Equally the lack of flexibility of concepts simply moving through the innovation system with a one dimensional end result of ‘just’ product without exploring the value of services, or even combining them, can miss huge growth opportunities .
•The value and growing appreciation about exploring different Business Models has increasing value. Providing the necessary space to explore emerging opportunities with new business models is becoming a must for accelerating growth through innovation and experimentation. Showing that increased willingness to separate and develop more ‘spin offs to encourage the concepts to flourish is more frequent from larger organizations that will increasingly challenge the young upstarts. By showing more commitment to separating off exciting new concepts to bear fruit quickly and to be allowed to more highly focused, so as to deliver the ‘seen’ result will allow larger organizations to be more nimble and responsive than in the past. This growing willingness is altering the competitive landscape even more.
•The constant ’quest for growth’ will need an even deeper connection between Marketing and Innovation as they will continue to be two ‘twins’ as the strongest drivers of margin and revenue growth. What is required is to re-equip marketing executives with new skills in design appreciation, research expertise, deeper customer engagements and an even stronger voice at the C-level to drive innovation through its different avenues of opportunity (service, product, social, business model generation). Innovation needs to be a core capability within Marketing, not just given a cursory understanding or working through a narrow view, it needs deep appreciation of what and where it can provide this growth.
•The recognition that adopting someone else’s best practice is not the ideal way to go, it has been the ‘lazy man’s’ solution for far too long and really does need even more rigorously challenging. Defining your specific emergent or good practices that fit your culture and context are clearly better, adopting blindly others is not, yet still far too many do this. Your context, your culture, your resources are uniquely different and other peoples ‘best practice’ is not the right starting point. Somehow best practice needs a radical overhaul in what it provides and what it can inhibit. Far too often adopting best practice can be a disaster. Emergent practice should be the watch world.
•The art of spending wisely today is even more vital. The choices between experimentation, trial and error internally and learning from external expertise for understanding innovation needs to be worked upon. There needs to be a better appreciate of each other’s contribution. It still seems not be well managed, far to ad hoc and not well thought through. Admittedly external expertise has often failed to provide innovation leadership and the deeper thinking that internal expertise on its own simply cannot deliver. External advisors simply took over and then left at the end of their consulting engagements, leaving much simply not embedded within the organization.
•Contracting hands-on consultants should be seen differently from using external knowledge providers-they offer a distinctly different service and for me, the difference between consulting and advising. With growing complexity innovation specialization has increasing value, often this is not sitting on the teams bench, it needs bringing in and being valued for what this can give in greater appreciation. Greater external expertise needs to be injected into the innovation equation of many organizations for deepening individuals, teams and organizational understanding of what innovation can provide in its different potential. There is today even more of a business case for a deep innovation dive with external facilitation to graps new understanding and latest developments from a party that is 100% focused on the subject. The internal executive is often left badly equipped to recognise innovation’s complexities as it seemingly doesn’t fit their lens of the world and due to this organizations can discount much to their peril in the longer term.
There is a lot evolving in the name of innovation, all very healthy but all very challenging. Innovation needs to be treated as a critical discipline, to be built up, to be called upon where necessary. It is often not as well understood as it should be, on how it often works but it needs establishing far more within the fabric of each organization. It should be treated no different than the IT specialist, the accounting specialist, the strategic advisor, PhD researcher or sales specialist, innovation has a critical place and needs clear representation at the top table.

Place more trust in the specialists that have innovation as their expertise, internally and externally but give this the necessary ‘head room’ to be understood. It is time innovation as a recognized discipline should be fully embraced, ambiguities and all! There is a new wave of emerging innovation practice going on.

How to Stifle Creativity

Sunday, October 16, 2011

How To Innovate in spite of Innovation

How To Innovate in spite of Innovation
by David Armano on 14 October, 2011 - 19:49


I recently gave a talk, or more like a "therapy" session with Mullen's Chief Innovation Officer Edward Boches at the MIMA Summit in Minneapolis. A fantastic event populated by some of the most innovative companies in the world including Target, 3M and Best Buy. I have a bias when it comes to "innovation" that people tend to hyperfocus on what Google's Avinash Kaushik called "transformational" innovation.



Ironically, a great example of transformational innovation would be Facebook which is transforming the Web from information to social interactions. But I focused my portion of the conversation on where I spend most of my time which is "incremental innovation" or smaller innovations which are not designed to dramatically transform, but can be effective ways of moving an organization in the right direction. Here are a few tips on how to innovate in spite of innovation.

Think Small: Fireflies vs. Lightbulb

Innovation doesn't always occur as the result of a single big idea (lightbulb) but can often times be the result of many little ideas. If we think about ideas, concepts or thoughts as fireflies vs. a giant lightbulb, you realize that fireflies need to be "caught" and placed in a jar. When collected, lots of fireflies can generate just as much light as a light bulb, but the trick is pulling out the right firefly or idea at the right time. Many good ideas were ahead of their time.

Prototype

Coming from a design background, I stress the value of prototypes and define them broadly. Prototypes don't always need to be built out of code or material. A prototype needs to go beyond spoken or written word. It can be a visual, or process design or even a concept video. But it should be tangible, and it should communicate the value of the innovation.

Culture Matters More Than Technology

Edward busted my chops a bit because I was using index cards to gather my thoughts vs. an iPad. I took that opportunity to stress that culture is more important than technology when it comes to innovation. I've seen companies with state of the art working spaces and those with just the basics in place and innovation happening at the latter. When it comes to pushing things even just a little, you don't need the latest and greatest tech but you do need a fire in the belly which is shared by your peers.

Create A Coalition of the Willing

Related to the last point I referenced specific examples where I had seen better ideas come out of hallway conversations vs. "brainstorming sessions" where the most "creative" people are invited to the table. When trying to innovate, as a manager the most effective thing you can do is find, harness, and conspire with those who are willing to take up the cause with you. Innovation is a cause. It makes people uncomfortable and challenges them to stretch their own abilities.

Speak The Language of Business

During our session, several individuals expressed the frustration of not being able to get "innovation funded". There are creative ways around the obstacle. On the professional services side, one way is to make a business case to a client which funds the initiative for you and gives them first dibs on an idea. On the corporate side, it can entail working up a business case and showing how much can be made or saved. Or there can be business cases built around things like visibility, marketing, press etc. Speaking the language of business means speaking in terms of business outcomes and not just the brilliance of the potential innovation. Do this and you'll be one step closer to finding a sponsor.

Meet A Need

One of the things that I like about Kickstarter is that it meets a need that has previously been unmet. There are lots of people with projects in need of funding, and as it turns out there are also a great deal of people who feel good about supporting a project they believe in. The results is a marketplace where "buyer" and "seller" both benefit and exchange value. But prior to the platform, neither group likely knew that needed to work this way.

These are a few personal "values" that I try my best to consider when I work and hopefully push things forward. What are yours?

Original Post: http://darmano.typepad.com/logic_emotion/2011/10/innovate-1.html

The Technical Innovation Debt

The Technical Innovation Debt
Posted on October 14, 2011 by James Gardner


The other day I noticed something which is pretty obvious in retrospect: there seems to be some kind of relationship between the degree of innovation and technical debt in products and services.

Technical debt is a term which was coined by Ward Cunningam, who explained it thus:

Shipping first time code is like going into debt. A little debt speeds development so long as it is paid back promptly with a rewrite… The danger occurs when the debt is not repaid. Every minute spent on not-quite-right code counts as interest on that debt. Entire engineering organizations can be brought to a stand-still under the debt load of an unconsolidated implementation, object-oriented or otherwise

My observation is that the more unprecedented something is the greater the technical debt that’s inherently taken on.

This has nothing to do with speed to market, technical incompetence, or all the other things that make technical debts occur in more traditional scenarios.

For innovators, technical debt is inherent because nobody has a detailed understanding of the problem space in the first place.

In other words, if you are an innovator, and you go after a first-mover advantage in the market, there’s this huge tax you’ll have to pay from then on.

I have personal experience of this.

At the turn of the century, I was involved in a start-up that made internet banking software. We deployed the first systems in the southern hemisphere, and rode pretty high for a while.

We had to build everything. And there was nobody we could hire who knew the space. So we just made stuff up as we went along.

The very definition of a startup in an innovative field, I suppose.

The thing is, other companies came along soon after who had learned from our experience. Their products had much less technical debt than ours as a result.

Two years later, and all our customers were eyeing these new entrants with some envy. Their operating costs, after all would be much less if they switched.

They all did, over the next few years after.

The lesson I learned then is one I am relearning every day since: the economics of doing something genuinely new are very challenging indeed.

Firstly, you have to pay to discover new stuff.

Then, you have to pay to commercialize it.

Then, you have to pay to support a technical debt forever.

Or, you have to pay to take out all the technical debt. And the longer you leave that, the worse the expense.

All very expensive, and probably only worth it if there’s something you can do to stop competitors coming along.

I’m increasingly of the view that genuine, breakthrough innovation is really not something that most companies should pursue strategically if they want to maximize shareholder returns.

This is a theme which I explore in detail in my new book Sidestep and Twist, which went to the publisher last week

Thursday, October 13, 2011

Nexvu Finds Mobilization and Improved Placement of In-Store Devices Can Save Top 10 U.S. Retailers $500 Million in 2012 - pymnts.com

Nexvu Finds Mobilization and Improved Placement of In-Store Devices Can Save Top 10 U.S. Retailers $500 Million in 2012 - pymnts.com

How to Manage Different Types of Innovation

There Are Three Types Of Innovation. Here's How To Manage Them

By tailoring the product development process for different kinds of innovations, a firm can give itself the opportunity to generate immediate new product revenues while cultivating future opportunities.
Whether they’re dealing in cars or cookies or computers, companies typically struggle with how to effectively and reliably create innovative products and services. Often, they discover that the greatest challenges aren’t in coming up with big ideas but in the organizational and management issues that these new ideas present.
Clayton Christensen at Harvard Business School has done some phenomenal work on disruptive innovations and how they differ from sustaining offerings. At Jump, we have built on this foundation, developing a framework to help folks figure out how to bring new ideas to market, create more realistic testing and growth expectations, and better manage their innovation pipelines. This requires identifying what types of innovations you have, what you need, and how to nurture and grow them all.
The Three Types of Innovations
Sustaining products and services are the kinds of innovations companies often need to develop just to stay in the game. These incremental innovations can be thought of as variations on a theme. For example, in the category of household cleansers, a sustaining innovation might involve making the cleaning agent 10% stronger or pairing it with a new scent.
Breakout offerings are those that significantly up the level of play within an existing category. The sleek Motorola Razr, with its boundary-pushing design, was a runaway success for Motorola. Seeing it, customers couldn’t help but want it--over time making it the best-selling line of clamshell phones ever. That said, it was still a clamshell phone, sold and used in much the same way as previous cell phones.
Disruptive innovations are the sort of big ideas that many of us have in mind when we think about an innovation. They are called disruptive because they disrupt the current market behavior, rendering existing solutions obsolete, transforming value propositions, and bringing previously marginal customers and companies into the center of attention. The iPod, which radically changed the way we listen to and buy music, is one such innovation.
To help explain the difference between these three types of innovations, let’s look at the coffee industry. When Maxwell House came out with a dark roast version, it introduced a sustaining innovation. While a new flavor, it was only a variation on their existing products that customers could instantly understand. A breakout innovation was General Foods’ line of International Coffees, which added gourmet flavors to the instant coffee category and elevated the at-home coffee experience. And Starbucks has obviously been a disruptive innovation, turning coffee into a destination experience worth paying a lot more for.
Note that in a given category, disruptive innovations often come first and are then followed by a series of incremental innovations, with sporadic breakout hits interspersed. Eventually, the market is disrupted once again, starting the cycle anew.
Not All Innovations Perform the Same.
Because disruptive innovations have the potential to yield the greatest benefit to a company, firms often make the mistake of thinking that disruptive products should lead to immediate market success. Even worse, some firms unwittingly begin to classify their products purely on the basis of their immediate market forecast, calling likely big hits “disruptive.” In fact, the opposite is true. Because disruptive offerings differ significantly from the status quo, they often test poorly and require time to gain market acceptance. Indeed, one should actually be suspicious of so-called disruptive innovations that show immediate widespread success.
The typical profile of revenue performance is:
• Sustaining: Immediately moderate, then tapering off.
• Breakout: Rapidly strong, then quickly dropping to a lower level.
• Disruptive: Longer gestation period leading to exponential growth.
Managing Different Forms of Innovation

Too often, work on a disruptive innovation gets bogged down in a system that is optimized for the creation of sustaining offerings. The success of the project comes to depend less on the quality of the innovation and more on the quality of the deals the team can cut. Such projects demonstrate the importance of establishing different metrics and procedures in advance of each project so that teams know the goalposts they’re aiming for and can tailor their approaches accordingly.
For disruptive endeavors, success typically requires different development processes, different approval and funding mechanisms, and different performance expectations.
Diversifying Your Portfolio: Managing Risk and Reward

By tailoring the product development process for different types of innovations, a firm can give itself the opportunity to generate immediate new product revenues while still nurturing future opportunities. To support that goal, companies should classify each of its new product concepts within the framework of sustaining, breakout, or disruptive. This allows a company to manage risk and reward at a portfolio level.
For instance, some companies seek to develop a healthy balance of all three in order to meet the needs of today and tomorrow. In other cases, companies are able to focus their innovation efforts by clearly stating that they are prioritizing the development of breakout products and consciously minimizing the exploration of disruptive opportunities.
Categorizing innovations using this framework is an effective way to help ensure that target outcomes are in line with early expectations, and that any firm seeking to innovate has an effective system for doing so.