Foresight 20/20

Not only should Congress encourage/facilitate the organized bankruptcy of the Big Three, but it should also make it easy for them to be replaced by 500 new car companies.

He goes on to describe that this is what it was like 90 years ago, and suggests what it could be like in the future.  Great idea.

I would build on Seth's idea to suggest an increase in the incentives for companies that are built around consumer needs, rather than new technologies.  Never before have consumers been so available, ready and willing to be part of the process.  As I've said many times before, valuable innovation is not random.  The tools are available for a company to identify a real need (not just a preference), define the market for it, and connect the dots for how their solution will satisfy that need.  Companies who do this should be rewarded with the most incentives, as their value propositions will be able to support multiple types of products and services to satisfy those needs.  They will have a clear roadmap, and will be less likely to get bogged down in the development of a solution in search of a market.

This could also provide a new perspective for the way VC's evaluate potential investments.  But that is a story for another time...

Individuals and organizations have one thing in common.  We all must carefully balance the time and energy we spend attending to the things that are important, and the things that are urgent.

What's important are the activities that keep you true to your mission.  Who you hire or choose to work with, how you contribute your talents, and how you solve the needs of your market are all important things to consider.  Your choices about them have long term effects on whether you will achieve your ultimate goals.

What's urgent are the activities that sustain you in the immediate future.  How you pay the rent, get the funding, or respond to external changes are all urgent issues that must be resolved along the way.  They are like bumps in the road, and your choices about how to manage them can also have long term affects on whether you will achieve your ultimate goals.

We all must attend to important and urgent issues, and how we balance them will determine our ultimate success.  For example, an entrepreneur may tweek a business model to ensure their company will get funded.  If they tweek it to the point that it is a different business altogether, they have gone too far.  It seems that those who go too far are lacking clarity or vision of their ultimate goals.  They end up becoming a product of the external forces that they have allowed to shape them, and their reactions are driven by panic and fear more than vision and mission.

Today we are seeing unprescedented panic and fear that can shatter our ability to achieve our economic and social goals - if we let it.  This current bump in the road should change the way we do business, but we should not let it change our business.  Yes, we need to innovate, and I believe that the innovations that will add the most value will come from those who clearly define what's important - and decide to make it urgent.

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.

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.

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.