Foresight 20/20

There is a good article in Strategy + Business about Consumer Choice Modeling.  Consumer Choice Modeling is a tool to project how well different product options and their attributes will do in the market.  Rather than being a simple preference test, it projects the consumer's likely behavior at the store shelf, given a specific set of choices.  As an example, they said that this tool accurately predicted that Apple's first iPhone was priced too high, which the market subsequently validated.

I think tools like this are great.  However, problems arise when they are used at the wrong point in the process.  These tools are best used after a new product is defined; the benefits, the details of how they will work, and what they will cost are all worked out.  These tools do not help you to develop a breakthrough innovation from scratch.  For that you need to figure out what would motivate a consumer to try a new solution in the first place; what problem really needs to be solved. 

The reason these tools are often misused is that they deliver an answer with a high degree of certainty.  This makes people comfortable.  But it does not take the place of the deep understanding required to figure out what a new offering should be.  What they do is confirm or disprove the decisions that have been made so far, but they will not give you information to come up with the idea in the first place - unless the idea is an improvement on what already exists. 

Once again, it all comes down to clearly understanding the scope of your innovation effort.  If you are already working with an existing offering, and want to improve it, then you can start with tools like Consumer Choice Modeling.  If, however, you want to develop something new, then save the Consumer Choice Modeling tool until you reach a point at which you have developed a set of choices for the consumer to make.

Last week Brandweek had an article about Design Thinking, and I'll have to say it was a bit misleading.  I'm not going to nitpick the article, but I would like to address a few points that I think are valuable to understand about the topic.

I should start by saying that I am a proponent of Design Thinking, just as I am a proponent of Business Thinking, Legal Thinking, Engineering Thinking, and Political Thinking.  All are approaches to solving problems that have evolved to ensure rigor and best practices in their respective professions.  Where it gets interesting is when a problem in one discipline benefits from an approach used by another discipline.  The current buzz about Design Thinking is an answer to the business world's need to innovate.  The current processes used to guide businesses don't lend themselves well to doing something new that can't be measured by current benchmarks.  Designers regularly create new solutions that have no benchmarks, so taking a page from the way they work should be helpful to achieve these goals.  And it is. 

What gets misleading is when the distinction is blurred between an approach that is used in a discipline, and the work, skills, and deliverables expected of professionals in that discipline.  If a business person uses design thinking to develop an innovative business model, the outcome is still a business model and the profession is still that of a business person.  It does not mean they should be called designers, as they do not possess the skills required of a design professional.  If a designer uses business thinking to make their designs more relevant to the business, they are still designers.  The article references people with design backgrounds who are now in marketing roles.  That would be called a career change. 

Finally, it is misleading to narrowly associate tools with disciplines.  The article associates ethnography with the way designers learn about consumers, and suggests that focus groups are more for business goals.  This is just not true.  Ethnography is a research tool, and is used when a deep understanding of consumer values is necessary to solve a problem.  This could be a business problem, a design problem, or a pure science problem.  If we are truly employing design thinking methodology, we are less worried about what tools we are using, and are instead doing whatever is necessary to achieve our goals.

I don't know who first coined the term Design Thinking (I've heard it was either Tim Brown of IDEO or Roger Martin of the Rotman School of Business), but Roger Martin's article is still the best I've seen in terms of defining the value of design thinking to a business.  His article on Reliability and Validity is well worth the read.  Reliability vs Validity.doc (42.00 kb)

Nov. 13 - Update today from Jess to clarify the attribution of who first coined the term Design Thinking:

As far as origins, Peter Rowe wrote a book called "Design Thinking" that came out in 1987. Not sure about earlier usage, but I'm skeptical of either Brown or Martin being the originator.  Here's the Google Book result for Rowe's "Design Thinking"

http://bit.ly/rowe_design_thinking

I talk with a fair number of start-up companies and I'm always able to tell who chose the company name.  Not the specific person who chose the name, but whether or not the name originated from within a marketing function or a technical function. I can also usually tell if it's a second or third generation name.

The technology function tends to love names that are cleverly descriptive of what their underlying technology is or how it functions.  Sometimes the names are difficult to say or remember, but that doesn't matter.  The more descriptive the better, and if it's disguised in some type of word play that's even better.

The marketing function tends to love names that connect the company's product to current popular trends.  They also seem to love names that are enigmatic enough to allow meaning to be built into them through use.

And then there are the names that are descriptive of a company's benefits.  Usually simple, and often indirectly referenced, these names reinforce what I will be buying into when I choose their products.  In my very small sample size, I've noticed that these names are often second or third generation names of these companies.  There are often stories about how someone realizes that what a technology does for people is more interesting than the technology itself.  Or they realize that it's more important to differentiate from the sea of My- or i- products and companies, than to show a connection to them.  The key is that the name becomes relevant to the consumer, rather than relevant to a technology, internal preference, or discipline the consumer may not know exists.

This is the way to enable the consumer to influence your business right down to the name.  It's not about asking them to choose their preference from a set of choices.  It's about understanding what you provide that is relevent to them, and reinforcing that value in the name.

While we're on the topic of publishing, Chuck Frey of Innovation Tools published an article I wrote about guiding innovation with consumer research. 

It's a brief how-to, illustrating how consumer research is applied differently for incremental improvement or developing breakthrough innovation.  The example is from the past, and shows how consumer research on a desktop computer could lead to the improvements we enjoy today, or to the development of the laptop.  I'd love to know if it clarifies the common "one size fits all" perception of consumer research techniques.

Innovation Tools is a weekly newsletter where Chuck shares tools, methods, and ideas he collects through the week.  It's a great place to find all the latest tools and thought leadership to aid in mind-mapping exercises, brainstorming, bringing out creativity, etc.  As with any resource, use it wisely.  Tools can help you to be better and more efficient at what you need to do.  No single tool, however, can give you the answer, or transform your organization on its own.  You still have to do that work. 

You can also download it here, and if it's helpful, feel free to share it - but don't sell it. consumer guided innovation.pdf (66.32 kb)

I recently wrote about how good design embraces constraints.  In the comments, Kelly asked how we should go about focusing a client on the possible design constraints upfront in the process.  This is a good question, and the extent to which you can identify all the constraints upfront depends on the extent to which you are looking to improve the existing offering, or you are looking for a breakthrough.

In my experience, if you are looking to improve on an existing offering, the real constraints typically consist of tangible boundaries that are easy to identify.  These would be things like current manufacturing processes, distribution channels, category definition, and organizational structures.  If the new design needs to fit within these constraints, the designer should be made aware of them in the beginning.  It is then part of the designers job to creatively work within these constraints.  For example, if I am a company that manufactures padlocks, and I am improving my current product, the constraints should be easy to identify.

On the other hand, if you want to develop a breakthrough innovation, it is necessary to understand that one of the most important outcomes of the project will be to indentify the constraints.  In this case the real constraints tend to be less tangible, consisting of things like the consumers' culture, and macroeconomic regulations and conditions.  Any of the constraints listed above would be self-imposed.  Back to the padlock example, if I want to develop a breakthrough innovation, defining my company as a padlock company would be unnecessarily limiting.  I could redefine the company as a security company, and a whole world of options opens up.  The real constraints for how consumers perceive security would need to be indentified as part of the project, before potential solutions are explored.  Once potential solutions are explored and selected, the next set of constraints needs to be defined.  These would be things like where, how they will be made, new organizational processes that will be needed, which categories will now define the offering, etc.

The point is that regardless of the type of project you are undertaking, the constraints should be identified before the designer starts designing anything.  If we are trying to do something truly new, we should be aware that defining constraints is part of the process, and we should be prepared for the reality that current constraints may not need to be imposed on future offerings.

Unless you've been living under a rock, you are aware that the current financial crisis is causing many businesses to rethink what they are doing.  That often entails scaling back or postponing large innovation efforts, or modifying new product releases to better align with consumers' changing priorities.  The intention here is good.  Since we won't realize the benefits of the big innovation project until some point in the future, what harm will a few more months do?  In the meantime, we can make a few quick hits, and shore up the bottom line.  All too often, however, the quick hit becomes an all consuming endeavor for little gain, the big innovation project falls off the rails, and the future arrives with depleted resources and precious little on the horizon.

I happen to be a proponent of quick hits.  When they fail to deliver, it's usually not because of a big, bad decision.  It's usually the result of several small, good-in-the-moment decisions, that collectively take the project off track.  Here are a few things to keep in mind at each small decision point, that should help your quick hit to add value:

Make sure that the quick hit you are undertaking is in fact quick.  Define up front what will be done, and stick to it ruthlessly.  While a bigger project may benefit from the "while you're doing this, you might as well..." syndrome, a quick hit needs relentless focus.

If at all possible, keep the longer term projects moving, even if at a slower rate.  This is hard for tiny companies, but it's crucial.  Longer term projects require that people spend more time thinking about the implications of their decisions.  Being able to tap into this will help the quick hit team to keep the right goals in mind, and not base everything on expediency.

Regarding expediency, just because something can be done quickly, does not mean it should be done.  Putting lipstick on a pig does not change the pig.  All this will do is erode your consumers' confidence in you.  They will feel like you tried to put something over on them, and they won't want to pay for it.  Best to show them that you will only act in their best interest. Everything else is waste.  Seth Godin has an interesting post today about making those tough decisions.

Remember that you exist to serve your customers.  If you know that your consumers will benefit from a certain feature, function, or service, it's better to make a small change in that direction than to implement something totally new that they care less about.  Again, you need to build their confidence that you are there for them, and they will stay with you for the longer haul.

Finally, remember that whatever you do for your quick hit, it will be with you longer than you planned.  Undertaking a quick hit diverts resources from other projects, and you may need to depend on the quick hit for longer than initially estimated while the other projects get back on track.  Make sure it's something you, and your consumers, will value.

Michael Mandel, chief economist at Business Week believes that innovation is "the only game in town."  In this time of financial meltdown and economic crisis, he believes that the only way we can pull out of this mess is for innovation to prevail in our culture.  

I agree with his intention, but most of his suggestions left me scratching my head.  Michael suggests that we need new economic policies (tax incentives, etc) to encourage companies to be more innovative.  He also suggests prizes, and encourages new technology development.  While these policies can't hurt, I find that a lack of incentives or ideas is not the problem.  While his suggestions won't hurt, and may help, I don't think they will have the deep, meaninful impact that is needed. 

In my experience, the problem lies in the fact that most companies don't know what to do to be more innovative.  They know that in order to grow or be more profitable they will need to innovate.  That is a great incentive.  There are also more than enough ideas to go around.  What is lacking is that most companies do not know how to guide innovation efforts in a way that will be valuable in the market.  They also have a difficult time managing innovation efforts within cultures that need to manage predictable processes and outcomes.  To be more innovative, companies need to find ways to reward behaviors that encourage innovation, without discouraging the maintenance of business.  To be more innovative, companies need to be encouraged to take on projects whose outcomes cannot be defined before the project is started.  To be more innovative, companies need to learn to identify problems before they search for technologies.  Otherwise we end up with solutions in search of problems.  These are difficult behaviors for organizations to manage from within organizations who need to reward reliable delivery of products and services.  

We are a community of innovators.  What would you suggest to Michael to answer the question:  What is necessary for America to become more innovative in the future?  How can we help him?

Think about the last focus group you ran or attended.  Be honest with yourself.  Why did you have the focus group?  And what, exactly did you learn from it?

I always tell my clients that focus groups serve a real, and valuable purpose, and that they must be used judiciously to make sure we're using the right tool for the task at hand.  But then I noticed that I'm using them less and less frequently.  They don't seem to be very helpful in learning deeply about consumers' lives.  One-on-one interviews are much more helpful to do that.  They also don't seem to be very helpful in evaluating new product concepts, as group-think often obscures real opinions.  Add to that, the numbers are too small to use them to quantitatively infer the behavior of the larger population with a high degree of confidence.

So why are we using them?  I had one client tell me that she used focus groups because it was an easy way to get others in the company to participate.  They could drop in and out from behind the glass, and at least have some exposure to their consumers.  Another client told me that they are used in her company because they were an "accepted" method of gathering market research, and they could easily obtain the funding to run them.

I can see using focus groups when I have an idea of what I want to learn, and I want to collect some basic information to help me to know which areas I'd like to probe more deeply.  It's a safe, middle of the road tool.  What I'm finding, however, is that as we become more focused on who our consumers are and we become more adept at using online tools to collect this basic learning, the focus group is becoming less relevant for me.

I'm curious to know if others are having similar experiences.  Is there greater value we should be getting from focus groups?  Or are they a tool that will become less relevant in the future?

I talk a lot about consumer insight: how to learn from consumers, how to derive insights, and how to translate them into useful criteria to guide decision-making.  I realized that I don't talk so much about how this connects to the design process, and I'll be mixing in more of that from now on.

I've often heard clients talk about holding back on the constraints because they don't want to hinder the creative process.  While the intention is good, nothing could be further from the truth.  The creative process depends upon constraints.  Figuring out how to manage constraints is what creativity is all about.  Having a blank slate to design whatever inspires you is what fine art is all about.  It may be fun and interesting, but it most likely won't help to achieve your business goals.

Next time you're working with a designer, remember that it's your job to let the designer know about all the constraints to the process ahead of time.  Along the way some of these constraints may be challenged or made irrelevant, and that's part of the creative process at work.  If you don't do this, the designer will create their own constraints, and what gets designed may not be relevant to your business at all.  At that point everyone's time has been wasted. 

Also remember that you don't need to decide what the answer is, and have the designer just draw it up and make it pretty.  Design is about problem solving.  Problem solving needs constraints.  Otherwise it's just decoration, and that's a different task altogether.

I'm on vacation next week, and will return the week of September 8th.  In the meantime I'll leave you with this thought: