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.

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

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)

For the last few months, I've been fortunate enough to be a participant in Seth Godin's online experiment - Triiibes.  This is a learning community, (currently, membership is by invitation only) and participants are actively exploring questions about the future of markets and marketing, and the forces that are changing the competitive landscape.  It has been a companion experiment to his latest book:  Tribes - We Need You To Lead Us.  I have learned enormously from the experiment, and offer thanks to Seth for starting it, and to the fellow community members for their participation and enlightened perspectives.

This week, Seth launches the book at an event in New York City.  It offers a new perspective that the future of successful marketing lies in the ability to create, connect and lead tribes.  Why is this important?  Because as innovators we need to learn to rally support from within our companies, our clients, and our peers.  Without the support we need from others we cannot succeed. Without strength in numbers, what we are doing is too scary for most people to support us.  We need to acknowledge their need to belong and believe in something greater than they can imagine today.  We do this for a living, and it's our responsibility to show the way.

In addition to the book, Triiibes - the online community, has collaborated on an ebook of tribal case studies.  Each one discusses elements that get to the heart of what makes tribes successful.  It's available to download for free, and I feel fortunate to have had two case studies selected for inclusion. Download, enjoy, and share!

updatedtribescasebook.pdf (2.97 mb)

The mantra that good ideas can come from anywhere is true.  It is also true that some of the best innovations are inspired by solutions found in nature or other unrelated categories, such as George de Mestral's idea for velcro coming from burdock thistles.

What is not entirely true is that innovation happens by chance.  While the solutions themselves were inspired by seemingly random occurrences, the fact that they were recognized as viable solutions is not random at all.  Defining the conditions that would constitute a viable solution is hard work, and it is this work that separates successful innovation from fads or irrelevant inventions.

Companies are realizing that it is more important than ever to be able to innovate in meaningful ways.  Many are scrambling to figure out how to solicit new ideas, or to figure out which new technologies will propel them into the future.  I have seen very few who are developing new processes that will enable them to recognize viable ideas when they see them.  And yet, it will be this skill that will enable long-term success from innovation efforts.

I wrote a post not long ago about how good design embraces constraints.  Consistent with that idea, I would say that good innovation processes create the right constraints.  When you think about your company's innovation processes, how much attention is given to developing the right constraints vs generating random ideas? 

I was thinking about a class I taught last month.  It was a section on innovation for an MBA product development course.  I teach this class every year and, in the beginning of the class, I ask the students to define what innovation is to them.  I am struck by how much better the answers get each year. 

A few years ago, innovation was more likely to mean inventing things that no one had ever seen before.  The students seemed to have very sci-fi ideas and definitions.  This has evolved, and this year they referred to things that included process improvements, and coming up with new ways to compete. 

Here is my definition of innovation:  Doing something new that adds value to your business.  It could be a product, a service, a new process, organizational structure or business model.  The point is that the organization does something new, and even more important, it adds value to the business.

This means that organizations who want to be more innovative need to be able to recognize and support innovation from every part of the company.  The good thing is that people generally seem more open to the fact that innovation is more than a sci-fi invention, and that they could probably contribute to it.  While this also means that there is no single way to reward it or measure it, there is one thing that remains constant.  In order to be able to do something different that will be valuable, there must be an understanding of the organizational goals. 

Does everyone in your company know what will make your organization successful?  Do they know how their day to day jobs influence that success?  If they don't, then they won't know whether doing something different will add any value.  And then they won't change a thing. 

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.