Customer Experience Crossroads

Can innovation be predictable and reliable or not?

I really enjoy James Gardner's posts on Bankervision. He recently posted about receiving a clever bit of marketing from Adobe, and threw out this remark at the end of the post:

"Here is a demonstration of the real power of innovation: it generates something unique that causes potential customers to change their behaviour.

The holy grail of innovation teams, of course, is to find a way of doing so reliably and predictably."

This remark created quite a stir among the readers and commenters. The commenters seemed to be of the view that "if it's innovative, it's not predictable."

It's a Myth!

I would argue that a good innovation process in an organization takes you to a place where the process and culture produces innovation in a predictable and replicable way. Any given concept or idea may or may not work, but the process over time does indeed work.

It's one of the myths of innovation that it has to rely on creative and unpredictable bursts from exceptional individuals, and that this is the price to be paid for innovation. 

I have tried to capture what I mean in the scribbles above. An innovation process needs to identify the challenge. And there are good processes to do that, even if your problem starts off poorly defined.

Your process then should generate ideas against that target. You don't expect every idea to hit the bulls eye. But you can quickly eliminate the stuff that is way off target.

As you move forward through a process of generating ideas and testing ideas, you bring in the body of knowledge from the organization and any experts you have found to help you. This might be operational information, risk analysis, or -- my personal favorite -- insights into your customers.

Drucker on innovation: it's hard work, not genius

Peter Drucker, who seems to have said it all first, said that most successful innovations arise from "a conscious, purposeful search for innovation opportunities, which are found only in a few situations."

Drucker identified seven situations that are ripe with opportunities for innovation:

[1] Unexpected occurrences

[2] Incongruity

[3] Process needs

[4] Industry and market changes

[5] Demographic changes

[6] Changes in perception

[7] New knowledge

Drucker takes the position that innovation based on new knowledge has the longest lead time and is the least predictable. The article cites numerous examples of innovation that are a refreshing change because they are older, but wonderful examples. He discusses the creation of the first commercial banks as an innovation, as well as the creation of the first computer.

"Above all, innovation is work rather than genius. It requires knowledge. It often requires ingenuity. And it requires focus. ... If diligence, persistence and commitment are lacking, talent, ingenuity and knowledge are of no avail."

I'm not that crazy about his seven categories, because they don't evoke the examples very well for me. But I don't have better ones.

Once we take this disciplined approach, certainly there will be failures. But they should not be random like shotgun blasts. If we take a disciplined approach to creativity and innovation, we stand a chance of managing the risks of failure. And in this way, I think there is replicability and predictability. But it's a statistical kind of thing, not a sure bet.

What do you think?

Resources:

The Discipline of Innovation, by Peter Drucker, Harvard Business Review 1985. Republished August 2002 with the compilation, The Innovative Enterprise.

Where a little insight can take you: the M Coat

I happened upon this on a shopping-oriented blog today, and was struck by the simple yet brilliant design. This is where insight into your customer can take you -- a unique product.

Insight converted into thoughtful products, good design, quality delivery is what drives business success.

The thing is with a great insight: once you see it, it was perfectly obvious. The M coat is made by Canadian Spirit.

Idea Marketplace wins awards for Lloyd's TSB

A fascinating story is told on the Bankervision site by Lloyd's TSB head of Innovation, James Gardner, pictured above. The firm just won an innovation award for the work on an ideas marketplace. I've heard of these before, but not in financial services. Very leading edge.

In particular, I was interested in Gardner's comments about the emergence of marketplace behaviors like inflation and insider trading.

He's coming out with a book in the new year from Wiley, FutureProofing, which sounds quite promising.

In another post, Gardner reports on his experiment in social networking, whereby he tries to make his status updates as banal as possible:

"Over the past few days, I've been conducting an experiment: using my Facebook status, I've been trying to see just how ridiculously uninteresting I can get before people dump me. "

Instead of dumping him, he is getting more response than ever. From this he draws some interesting conclusions about the role of social networking, and why banks aren't flocking to it in droves.

Service innovation at the ski hill

I'm headed to Mt.Tremblant for some downhill skiing over Christmas.

Quite a while back, we decided to forgo humping equipment all over the continent and just rent good stuff wherever we happen to be. Quite apart from the cost savings, it's so convenient.

Usually, you still have to hump the stuff to your on-hill accommodation. But not anymore!

Here are a couple of the new service innovations Tremblant has introduced:

[1] you can book your equipment online in advance. Yay! No more standing in line filling out a form!

[2] for a mere $10 they will put the stuff in your hotel's ski locker, ready and waiting for you. At the end of your stay, you leave it in the same place.WOW, I say! Fantastic idea!

If you want to look for some little innovations like this, the place to start is by creating a process map of a given experience. Identify every single step, no matter how small, that your customer or prospect goes through. Write these down. Mix them up. Look for patterns. Look for emotional highs and lows. Figure out how to save time, reduce hassle, move some of the work to another place or time.

And voila! You have a service innovation.

Service innovation in the driveway

People are always telling me they want to find breakthrough innovations. This is fine. But you can accomplish a lot with something smaller. I have a couple of nice examples of this for you this week.

Today, it happened in my driveway.

My beloved had taken our car to Canadian Tire to get a battery replacement, in preparation for the three months of cold that lie ahead. Big line-up. BIG lineup. Head guy comes out and tells people they should plan on leaving their cars there all day, maybe overnight. [I guess a lot of people are winterizing right now].

Plan B was a call to CAA. [I had no idea this was possible, because house elves look after the car and everything related to it. Lucky me!] It turns out that you don't have to have a dead battery to get them to come and replace it in your driveway. You can just ask them to do this, and they do it. [For a fee, of course].

No sooner had I tucked into my second coffee of the day than this truck pulls up outside and Bob's-your-uncle, we have a new battery in the car. And they took away the toxic waste of the old one too.

Service innovation: Save your customers time. Save them hassle. Take the service to them.
Result: Induce loyalty. Provide a new service that makes money. Earn unpaid media.

Next up, something at the ski hill that really made us delighted.

Innovation breakthroughs: now really IS the time or why recycling does not work for insights.

 

People are cutting back. [Oh, you heard that, too?]

I've had a couple of projects cancelled or postponed indefinitely in the last short while. One of them was to help an organization identify new markets so they could escape the commodity price-cycle trap of their current markets.

This is exactly the kind of project you definitely should not cancel -- projects that will help you crack new revenue sources. So what will this company do instead? I'm guessing, they will just push harder at existing markets, and find themselves in the same place a year or two down the road.

While having these thoughts, I bumped into a nice article in Marketing Profs. [Now that the economy is tanking, maybe we can catch up on our reading.] The quote from Jeffrey Immelt leapt off the page.

General Electric CEO Jeffrey R. Immelt has established a class of projects now well-known as "imagination breakthroughs," consisting of ideas that are "really hard or really important" and might generate significant revenues over a three-year period, the time that GE usually takes to implement a new idea. "Imagination breakthroughs are a protected class of ideas — safe from the budget slashers because I've blessed each one."

If it takes you a couple of years or more to really get an idea off the ground, then the fuzzy front end you cut now will leave you in even more serious glue in two to three years time. And if you kill the stuff already in the pipeline, you're not going to have anything new to launch in 2009 either.

I really wish clients would say instead: "Can you get me something substantive with less money?" That's a better challenge than dropping the idea creation process.

Caveat

The article this came from is filled with good ideas from the Zaltmans. But like many of their ilk, they firmly believe that no approach other than their technique (individual metaphorical interviews) can get to the good stuff. Not true, in my experience.

"These deeper ideas are not available from survey responses to statements such as "financial planning is difficult" or in focus groups where each participant has on average about 10 minutes of air time." 

OK, you are definitely not going to get these deep meanings from a survey. I agree. But individual interviews are not the gold standard either.

There may still be people running focus groups with 12 bodies in them. However, most of the kids I hang with have shifted to small groups when they are using a group discussion method. Small being five or six. And researchers frequently add advance activities such as blogging / electronic diaries / collage assignments / videos / you name it. And there's no rule about 90 minutes or two hours either -- you can keep people humming along for three hours quite easily. And yes, you can uncover metaphorical meanings in focus groups, in online research methods, and in many other ways.

In truth, the generation of insight has a lot more to do with the skill, knowledge and art inside the researcher's head than the method employed. There's no method going that guarantees insight.

As anthropologist Grant McCracken has said, the proof is in the pudding. If you got insight, you got insight. If you didn't, you didn't.

I have friends in the marketing world who have used Gerry's Zmet technique to great effect. And I believe all of methodological infighting and territory claiming must defer to this. If the method works, the method is good. The proof of the pudding has nothing to do with the theory of the pudding or the method of the pudding. The proof of the pudding is a client who says: "This was illuminating. I understand my consumer and my market in ways that I did not, could not before."

Back to the main point

This is no time to be cutting your future revenue streams by shutting down the insight machine. In fact, if you plan to be standing when things turn around, you should be cranking up the insight machine. Certainly, your customers and consumers brains are grinding away on many things right now. Not a good time to recycle some old insights.

Resources:

How to Foster "Workable Wondering", by Gerald Zaltman and Linday Zaltman. In marketing profs, reprinted from HBS.

The Zaltman Method, by Grant McCracken in his blog, 2006.

Smart pens usher in an era of paper computing

I was at the QRCA conference last week, and in a discussion heard about something called a smart pen. Being a gadget loving girl generally, I went straight online to find out the scoop.

My new pen arrived two days ago, and is already proving itself useful. If you click on this link, you'll see a "pencast" on the Livescribe site. A pencast I wrote just a few minutes ago. There are many other pencasts that users are sharing.

This fantastic device is clearly the product of very thoughtful examination of users needs and creating something that is materially better than what they are using now. Way to go Livescribe!

 

Remember the fun of playing in the sandbox: Innovation in business

I mentioned Walter Derzko's master class in idea generation and opportunity spotting in an earlier post.  It was well worth the time to attend. I want to share with you a couple of the ideas he covered.

Idea generation
I've been reading everything I can get my hands on about this topic lately, as I'm getting more and more requests to help on challenges involving innovation. [This may be a side-effect of writing a book. No one reads the book, but they think you know something about the topic. This is totally the best job in the world.]

So my office is a sea of books and papers, to the point where I can no longer see my comfy reading chair, and all flat surfaces are long gone. Some of this stuff feels only marginally useful, I am sorry to say. So when you hear something that really rocks, it's like the heavens opened.

I got to try out a really useful technique in Friday's session. Ironically, I had read about it earlier this week when another smart innovation guy, Philip Coppard, sent me an article from HBR on the identical topic. Enough preamble, here it is.

Think of some things you had as a kid. Spend three or four minutes, make a good list.

My list included: book-bags and haversacks, rubber boots, adventure play with my friends, using art supplies, riding my bike, collecting cards.

Now think of an adult version of that activity. Try to come up with one or two ideas for each thing you thought of, by extracting a key element, by taking it to the extreme, or by creating exceptional quality / adult flavors.

I thought of several businesses/products already in existence including the luxury motorcycle market, messenger bags and briefcase backpacks, scrapbooking, high-end rubber boots, and adventure travel.

But I also thought of a few that don't exist yet. When you're a kid, you get to play fireman. But no one is offering this as a fun adult experience.

I hope you can already see the power of this activity, because several existing businesses have come from just this sort of thing. Haagen-Dazs ice-cream, Rollerblade, and fancy Wellington's are a few examples. In the case of the scrapbooking supplies, new life was given to a product that had been killed by desktop publishing -- rub-on text (remember Letraset?).

As a group, we were able to think of several ideas for potential businesses that do not yet exist, that have some initial appeal. This is a fast, easy method to generate a starting point of ideas that can be worked and built upon.

Innovation models and toolboxes

According to Mr. Derzko, the linear and sequential approach to innovation as captured by models such as CPS are useful, but force the brain into a sequence of linearity that is not natural to our thinking. He believes the toolbox approach works better: use the tools that fit the situation, and don't get too fussed about moving back and forth, up and down, on the linear sequence.

I was delighted to hear this, because I've found these linear sequences frustrating at times, even as one of the creatives whose only job is to brainstorm well. [We always value another's viewpoint when it agrees with our own.]

He is also of the view -- as are many others in this field -- that we generally spend too much time on idea generation instead of problem definition.

This certainly fits with my own experience. Quite often, the problem that is presented to a consultant or researcher is not the actual problem at all. Or not foundational enough. By settling on a definition of the problem too early, even world-class idea generation will yield mostly yawners for ideas.

Myths debunked

In the research conducted for The Innovative Organization, we learned that successful business innovation is rarely about the big breakthrough from a single creative person. There's a whole chapter about myths that we debunked.

In the workshop, Walter took a strong stand in this direction as well. It's much better to look for templates and methods to find solid new ideas than to stare at a blank page waiting for blinding insight to strike.

Let me give you a concrete example. I have several friends who are artists and designers. They find it amusing that people assume they 'just pick up a paintbrush and the images just flow onto the canvas', as one put it. The real process is much more thought intensive, much more one of using or practicing known approaches and deliberately reaching for a compelling assemblage of existing templates. There is also exploration of things, usually leading to messy or ugly mistakes. Often called 'pushing it over the edge.' If you have ever studied the life work of a great artist, this pattern is very evident. To see an artist do a demonstration, speaking aloud all the while, is to see that same thought process made visible.

Bringing it home

Isn't it encouraging to think that business innovation is a lot like building a deck? You need tools, you need plans, you need to doodle and draw, you need to define your challenge. But we can all build a deck. We can find templates and adapt them to our needs. It is not the purview of only great architects, it is available to anyone who is prepared to make an effort.

Resources

Breakthrough Thinking from Inside the Box, by Kevin P.Coyne, Patricia Gorman Clifford, Renee Dye. Harvard Business Review, December 2007.

Opportunity Spotting

If you are in the Toronto area, Walter Derzko is offering an amazing deal for a half-day seminar on opportunity spotting, to be held on the 30th of May at Rotman School of Business.

Walter has been involved in a lot of interesting and innovative work over the years, including work with the Design Exchange, and he currently teaches innovation and entrepreneurship at University of Toronto.
 

I was talking to Walter recently, and we agreed that most of the formal training in business strategy that people get in business school is really most useful when looking at the very largest organizations. Sadly, few of us are CEO of GE and its cousins. Much more often, we are working with strategy farther down the food chain, and the models are not all that helpful.

Entrepreneurs do things quite differently, according to Mr. Derzko. If you want a crash course and some good tools to spur innovation, this might be the place to get you started.

he describes the Idea Clinic as a "systematic rigorous process for anticipating, spotting or designing Opportunity Scenarios before your competition does."

1. The most common types of unknowns that most businesses face  (ie, ambiguity, uncertainty, complexity etc) and how to effectively deal with each one
2. Which innovation and creativity methods work best, why and under which circumstances 
3. The six types of change in the business environment that all businesses face and how to turn “change” into opportunity scenarios
4. The most effective opportunity windows for startups, that they don’t talk about in business schools
5. Strategies to kickstart innovation efforts in businesses that don’t feel they need to be innovative  or in copycat businesses that  in the past have been content to be quick followers.

Email walter.derzko@utoronto.ca to register. If you can't make tomorrow's session (great price at $250), let him know you want to be in on the next one.

 

More on Toyota innovation: relentless, relentless

"If Toyota doesn’t look like an innovative company it’s only because our definition of innovation — cool new products and technological breakthroughs, by Steve Jobs-like visionaries — is far too narrow. Toyota’s innovations, by contrast, have focused on process rather than on product, on the factory floor rather than on the showroom. That has made those innovations hard to see. But it hasn’t made them any less powerful."

- James Surowiecki

I like thinking about Toyota and innovation, because they have many characteristics that are challenging for companies, such as:

• a large workforce
• huge, embedded infrastructure costs
• subject to the vagaries of commodity price swings
• highly regulated industry at national and international levels
• highly competitive market, and getting worse every year
• mature industry
• well-known, well-established product category
• not a digital product, and unlikely to be part of the free-conomy any time soon

These are structural challenges that most of my clients have to deal with. They are not Apple, and not Google. This is a company that has all the problems above, and yet has brought their ability to manage steady progress to an art form.

In fact, at senior levels, the real work is on the meta-task of improving their improving.

Any of us can learn from this discipline. We can challenge ourselves to make daily small improvements to systems and practices. We can stop settling. Stop settling on small stuff today, and you'll be surprised at the energy this gives you to push at bigger problems.

Don't settle

In managing customer experience, a lot of settling goes on. Small things are assumed to be too small to matter to customers, and so they are allowed to go on. Here's a few that immediately come to mind:

• We only open one side of the double doors in the morning, leaving customers to push into a locked door for the rest of the day
• We don't worry that there aren't enough places to hang all the clothes in the change-room
• We excuse the fact that the print is too small to read
• We post signs telling people if they park there for more than 15 minutes, we can tow their car
• We leave people on hold with a steady stream of advertising in their ear, while reminding them that we really care

In a number of years of consulting on customer experience, I have been involved in presenting recommendations to clients. There are usually some that are easy to implement. I mean REALLY easy.  Like making your parking signs friendlier. And there are some that are much more difficult, like reorganizing work roles. Clients almost never implement the easy stuff, even when they agree it's a good idea. And they often make a pretty half-hearted effort on the difficult stuff, expecting great results in a month or two.

For example -- pets are important to people. So make your premises pet friendly. Put a water bowl out in the good weather. Have a tie-up zone outside the front door. You could even put out a colorful mat that says something like, "for our favorite customers". But many organizations don't bother with these small things. They want the great leap forward. After which they plan to coast again.

Many organizations can't even be bothered to copy obviously good ideas that the competition generated.

With customer experience, however, there are rarely great leaps. It's a game of inches, not Hail Mary passes. Oddly enough, you complete more long passes when you are really good at the inches. And Toyota is a good example of that, too.

Resources:

A great short article in The New Yorker about how Toyota stays on top and keeps relentlessly pushing ahead: The Open Secret of Success, by James Surowiecki (May 12, 2008 edition). Brought to my attention by one of my favorite daily scans, Marketing Daily, from MediaPost.

Interactive content targeting teens: stupid.ca is a big improvement in the anti-smoking lexicon

For a few years I was pretty hooked on some interactive games like Myst and Riven, and their successors. In particular, I loved the design aesthetic -- kind of steam punk'd (before I'd ever heard that word!)

When I went to look at stupid.ca today, it immediately reminded me of the world of computer games. I don't know how successful this campaign was, but it's pretty innovative work. Definitely worth browsing around on your own. I captured a few screen shots to whet your appetite.

[I'm still learning to use my new Bamboo Fun, so please excuse the sloppy handwriting]

There are things to interact with in every room. It's not neat, it's messy. There are teens hanging around doing not much.

The briefing room below was the closest thing to familiar propaganda. I didn't stay long to see the movies. But the tone might have appealed to someone in their teens -- hard to say.

I loved that I could start or stop the movies, or anything else, at any time, and it was all under my own control. I never felt trapped. [Skip intro anyone?]

I wish more of the nutrition and green-living information we are getting crammed at us every day had this much fun-factor built into it.

More on fitness and personality: Ed Bernacki tells me about Les Mills

Ed Bernacki noticed the previous post on how personality affects consumer behavior, and sent me a very interesting note about Les Mills, the New Zealand fitness phenomenon.

"I find this fascinating as I have been a gym guy since I first worked in New Zealand and walked into Les Mills World of Fitness. (www.lesmills.com ) I saw a totally new type of aerobic program with classes of up to 300. The energy felt more like a nightclub. The instructors get that it is about entertainment. Most of these participants rarely touch a machine or weight (outside of the Body PUMP class which weight lifting to music). These are the play people as there is just enough structure to know that it is a safe and hard workout yet you have lots of flexibility. Some instructor tells you what to do and does so in a motivating way.

"Then you have the weight lifters …..who tend to be far more structured. These are the people who tend to carry a clipboard to record what they lift, how often and when.

"Everything about this gym was cool – the music, the funky architectural design, the parties, the clothing lines, etc. I often talk about Les Mills in my innovation stories. What I did not know as a member is that Les Mills (the actual person) noticed that no other gyms had such aerobic programs. They found a Kiwi way to license programs to other gyms.

"Fast forward 20 years…..11,000 gyms around the world use one of six branded and packaged programs. It is a brilliant idea. If you visit any GoodLife Fitness all its aerobic programs are licensed from Les Mills. Every GoodLife member sends my Kiwi gym money.

"From my perspective, GoodLife is a model of Canadian mediocrity in action. There is nothing innovative about it other than its sales model. Service is bland by design. Even the classes to do not live up to the potential I saw overseas. Unfortunately I am one of the few that knows the innovator and the imitator. Virtually all people only know the imitator.

"What I do find odd is that many of the promotional brochures and videos used by GoodLife actually use Kiwi models and shots of the NZ gym – it is not even GoodLife! Go figure."

This was news to me, I had no idea all of these programs were coming from New Zealand. Clearly, the success of these programs has a lot to do with keeping people entertained. Just think how much more could be done, beyond putting televisions in the gym. Where's that party atmosphere?

[Distracting aside:Too bad we don't have a clearly Canadian approach to compete with. I'd love to see the Second City fitness tape series. This winter, we could have had the shovel-your-way-to-a-great-body fitness series.]

Resources

Ed Bernacki's web site, The Idea Factory, has a lot of stuff about innovation. Ed's thoughts on innovation in the Ottawa Citizen, here.

Les Mills corporate site is here. Their clothing site (free shipping from New Zealand anyone?) is here.

Finance on the web: automated budgeting tools for the less affluent among us

The web just seems to be made for managing money. From the beginning, things like stock trackers and portfolio trackers were present, and they keep getting more sophisticated. Direct trading online forever changed the investment industry. Payments were next, but quickly moved outside the control of the banking sector.

PayPal and its rivals
PayPal, of course is one of the gorillas, and shows signs that it may someday try to do more than facilitate payments. Initially, it was about buying online, but it rapidly expanded the options for both payers and payees. Some time ago they added a personal payments function, so you can send money somewhere.

It seems so easy, but it wasn't that many years ago that people had to do things like wire money to do this sort of thing. You can already keep funds on your account there, and go across currencies with ease. It would be a short jump for PayPal to add other features that would make them look a lot more like a bank.

While PayPal has buried most of its direct competitors, there are still lots of P2P payment systems around. And eventually the banking industry caught up, and said 'OK, you can e-mail a payment. But only if you aren't a business.' 

There are many other direct P2P payment systems around. iKobo is still in business, using fulfillment of the transfer via a VISA prepaid card at any of one million ATMs worldwide, and anywhere else that VISA is accepted. Senvia is another. There may actually be hundreds of these, targeted at specific ethnic and geographic niches. At one time, Western Union and your country's Post Office virtually owned this game. Not anymore.

Budgeting systems, the new battleground
The new battleground appears to be budgeting tools that help the average person manage their money more effectively, linking directly to the transactions.

CIBC has budgeting and expense management tools attached to its credit cards through a service called CreditSmart.

Manulife One launched a service to permit you to integrate all your balances and offset borrowing costs. In addition to this, the statement classifies spending. It seemed like a really smart idea, but seems to have lacked serious uptake due to the lack of retail distribution power such as the banks have.

There are more online budgeting tools than ever. Many of the most recent entries have nothing to do with a bank, and they are definitely going to force the financial industry to raise the bar if they want to stay in the game. Here's a few that have come to my attention -- and I'm guessing there are many others.

The Automatic Money Manager promises to help you "take control of your money."

"The system retrieves all your transactions from your financial institutions, automates your bills, manages your spending & savings, and gives you access whether you are at home, work or on your mobile phone."

The system works using the "envelope" system of budgeting, with direct linkages of your accounts to the tracking system. For things like credit card spending, every transaction on a credit card is automatically linked to the "pay credit card" envelope, to encourage full balance payment each month.

Pretty slick for only $129 per year, or $189 if you sign up for two years.

MVelopes promises "complete control of your finances" for the same prices as above, and also has mobile phone access. A really informative site, it even lists the banks you can link into. And it's a HUGE list.

Banzai promises similar benefits for only five minutes a day and $4.95 a month, and calls their envelopes Jars. They have the added benefit of bonuses for signing up others. They've brought their fake-Zen-speak to the site, which makes me think they won't make it over the long term.

Mint offers the same automated account linkages and some budgeting features, and it's free. [It's not entirely clear to me what their business model is, but I'm guessing it's targeted advertising for financial products.] In addition, Mint lets you compare yourself to others on spending and saving.

If you want to set goals and track more than your budget numbers, there are starting to be services for that, too. Goalmigo and 43Things are social communities where you can set and monitor goals and get group support.

MyProgress promises to track how you are doing relative to everyone else on practically everything, from net worth to fitness. [Looks like a lot of data entry, however, so I didn't have the patience today.But dang, the possibilities are enticing, aren't they?]

Conclusion

All that stuff that used require hard work with a ledger book looks like it might finally become automated. And if, like me, you hate repetitive detail, this could be a really good thing.

Acknowledgements and stuff

Thanks to TechCrunch for some interesting comments on MyProgress, and the lead to Goalmigo

If you want to see how this trend translates to business, check out Bizner.

The innovation research is finally in print!

For more than two years, I've been involved in a major research project on innovation. This wasn't the kind of research that academics do, it was the kind that practicing business people do.

My colleagues and I conducted round-table discussions with more than 150 executives and managers from 121 organizations. Most of these events were held in person, but a few were online discussion forums.

The net result was published as a book by the main research sponsor, the executive education arm of Schulich School of Business.

We had the book launch this week, in connection with the ribbon cutting for the Centre of Excellence in Innovation that the school launched in concert with this research. There was air kissing, hand-shaking, and even book autographing, along with fancy things on crackers and suitable adult beverages.

We learned a lot of really interesting things about innovation. We exploded a few myths. And we got the stories and experiences of working managers in all kinds of industries who have lived the emotional roller-coaster on innovation. Here's a one page graphic that summarizes some of the key learning, and the interesting paradoxes we found.

Download summit_framework_v6.pdf

We weren't talking to the research participants about "new product" or "new technology", although that certainly came up. We went looking for innovation in every form and every functional area, from finance to marketing. The book is about the themes that emerged from this research.

There is only one place to get this book, if you'd like to read it. You can order it from Schulich online. All proceeds of the book go to the school. [And they include shipping, you've gotta love that!]

Resources
PS. If you happen to be a blogger or a national columnist, and you'd like a review copy, shoot me an e-mail, I'll see what I can do.

Keep your thinking up to date: or how we will look like idiots in the future

We all hold certain truths to be self-evident. Unfortunately, we are often wrong. This is one of the things that culture can blind us to.

Here's a good example, that I assumed was an urban legend, but according to Snopes it isn't.

It's a guide to making women more efficient at work from a 1943 trade magazine called Mass Transportation. It contains a fair bit of idiocy, and a lot of ideas that we have discarded today, at least as far as hiring women is concerned. [I daresay the transportation industry is not noted for its liberal thinking even today, so they may have been a bit outside the norm in 1943.]

Here's the thing: If you want to be innovative about your products, your services, your brand, you may have to rethink some conventional wisdom. The trick is actually recognizing the conventional wisdom when you see it. Because the conventional wisdom is so well understood, it often isn't spoken about. And some of it is still true, like the bit in this article about having uniforms that fit people. [d'oh]

Acknowledgements
Thanks to Jean [aka my Mom] for sending this along.

Images from www.Snopes.com, a great source for checking out things that just look wrong, and often are. But not always

New in credit cards -- the iCache

A brilliant concept here -- it'll be interesting to see how this performs in the marketplace. The device you are looking at is called icache. It's a thin wallet that contains a 'credit-card' that can mimic any of your cards. You select the card you want to use, and the mag-stripe is programmed with the needed information.
The data on the 'dynamic mag stripe' is overwritten by the next transaction, or expires.

Biometric security reduces the risk of having all your plastic in one place.
It isn't a hosted solution -- the biometrics and card data is stored with the consumer.
It requires no modifications at the merchant level -- one of the major barriers to a consolidated solution.
It works on contact-less units as well, such as RFID (which we'll be seeing a lot more of).

Icache wisely plans their initial roll-out via financial institutions, and will give them the opportunity to brand the device.  I would assume the reason for this is to try to forestall some kind of defensive or competitive manoeuvre on the part of the banking community.

The company plans to migrate the technology to cell phones when cell-payment becomes more widely available.   

This all seems really great, for a device that might sell for less than $100. It even has the cool-factor potentially going for it.
One major bit of fallout will be card branding.

Resources:
Thanks to Business 2.0 for bringing this to my attention. "One card to rule them all", Sept 2007

Changing customer behavior and expectations: wine industry

Way back in January 2005 I posted about buying a quality wine with a screw-top: an RH Phillips. I wondered how long it would take for new packaging to take hold. Wine, after all, has long been a product that is a badge for social class, education and purchasing power. 

As their affluence rises, learning about wine, and drinking more wine, has been one of the things upwardly mobile families aspired to. If nothing else, it signifies the availability of greater disposable income. It also flags a more sophisticated palate than that required for a rum and Coke, and very likely the food to go with that sophisticated palate. Wine just works on so many levels as a badge of social status. And the cork, of course, was a signal of quality wine. Winemakers wanted to use screw-tops as a quality control device, to eliminate 'corking', which ruins the taste of eight to 10 per cent of wines.

Since then, a lot of change has happened.

Screw tops take off

The San Francisco Business Times reported in June (Wine.com toasts higher screw-top sales) that screw-top wines now account for 17.5% of wine sales of Wine.com, a large online wine dealer. Not only that, but some very good wines are being sold in screw-top bottles, according to the article.

"The Wine.com web site features a section devoted to wines with screw caps, nearly one third of which are rated 90 points or higher by wine critics and publications such as Wine Spectator, Wine Enthusiast, Robert Parker and Stephen Tanzer, the company said."

"Two Buck Chuck", as Charles Shaw wine is nicknamed, won big against some heavy competition recently. Their 2005 California Chardonnay received 98 points (a good thing) and a gold medal at the commercial wine competition at the California State Fair, as reported in the Napa Valley Register.  Not only is it a screw top, it's just about the cheapest wine around.

Wine breaks out of the bottle

French Rabbitt, a quaffable and inexpensive wine, introduced the Tetra-Prisma container for wine. It's unbreakable, lightweight, and easy to open. Perfect for casual dining situations, according to the French Rabbit web site:

"The French Rabbit Tetra Pak container is portable and lightweight so the wine is great to enjoy on the patio, camping, at a picnic, poolside or dockside! They are easy to open (no need for a corkscrew), shatterproof (no broken glass!), cool rapidly and are resealable (squeeze the rabbit!). With its convenient design, French Rabbit wines are the ultimate takeout for your next social gathering."

The company also says the lower overall weight of packaging makes for reduced environmental impact through shipping. It's not just convenient, it's also green.

Pret a Boire has provided an even more convenient package. This one reminds me of a wine-skin. The website has advice about how to keep wine cold in your backpack, and how to use a stream to chill your bottle of wine when out hiking. And it reminds us of the lower shipping costs and hence lower environmental impact of the package.

Lots of others are now on the bus, as you can see from the variety of Tetra Paks shown below.

I did rather feel sorry for the Yellow Jersey people when the Tour de France started having drug problems again this year. On the other hand, perhaps that's OK if you're selling wine. This wine, sourced in France, is apparently only available in Ontario, and comes in a PET plastic bottle ... with a screw top, of course. The makers are Boisset, the same people behind the French Rabbit wine shown above.

So the traditional bottle of wine and cork experience is under assault from many directions. Oddly enough, the challenge for those who actually understand wine, is that these wines may look cheap and unacceptable as gifts, even when they are good wines. As for example, the RH Phillips wines, which are high quality for their price. (IMHO)

It may be that these wines are only for those confident in their own taste, and those who have preconceived notions of wine. However, I suggest that the joy of uncorking may well be something that your grandchildren will not experience.

Behind the scenes

A number of these packaging initiatives are actually part of an LCBO initiative to reduce packaging waste from single-use glass wine bottles. For those not resident here, LCBO (Liquor Control Board of Ontario) is likely the largest single purchaser of wine anywhere, since they have exclusive control over the wine and liquor trade throughout Ontario. Not everyone thinks this approach is actually very environmentally friendly -- Usman Valiante, writing in the Solid Waste and Recycling blog believes that the green agenda is actually being used to hide the real commercial agenda, and that LCBO is actually trying to build house brands and thereby increase margins and ultimately their profits. Interesting reading, although a little outside our beat.

More about the PET bottle is here. (Links spawns a PDF window -- scroll through to page 6)

Original palm-sized device from ancient Rome: the more things change...

This device is a wax tablet dating from ancient Roman times, and found underneath the city of Barcelona. Just about palm sized. Easy to tuck into a purse or pocket, folds of your toga, or whatever. When folded, it would be just about the same size as the original Palm Pilot.

Seeing this on a recent trip to Barcelona reminded me that many of our needs are old and unchanging. We've wanted ways to record information and take it with us. The difference now is that we have found more and better ways to do that. The wax tablet was an improvement over papyrus because it was small and reusable. Papyrus was probably invented to be an improvement over stone carving. The fundamental need to record things has clearly been with us for thousands of years.

Vendor Relationship Management -- what the heck is it?

Vendor relationship management -- VRM of course -- is something new on the technology horizon.

"VRM provides customers with tools for engaging with vendors in ways that work for both parties."

As a definition, this is a bit vague, but a look at some of the ideas this group is bandying about is helpful. The idea is to create tools that help empower individual customers / consumers / viewers etc. to manage out from ourselves our needs and wants, thereby giving us better tools to support our recent empowerment in the information age. So instead of just feeling empowered and overwhelmed, we feel empowered and in control.

There's a very good diagram here that helps to understand how a VRM system might work.

Examples of VRM

• Instead of having to deal with telemarketing and mail efforts to support public broadcasting, perhaps having provide us with a way to donate directly on our own, revealing only what we want to reveal. This one is a project of the VRM Project at Harvard (see resources below)

• Being able to generate offers -- sort of like consumer RFPs, but less cumbersome -- instead of lead generation. So perhaps I could put out an offer for a bookkeeper, or a house painter, for example, and be able to effectively manage the responses to that. I would identify myself as a lead, and vendors would respond to my offer

• You want to buy a server, so you use Technorati tags to identify your needs and the stage of your purchase, and monitor the incoming expressions of interest using an RSS reader

Essentially, VRM feels like it could be like a want-ad on steroids, a combination of Craigslist and virtual agent. We never really got CMR (Customer Managed Relationships), we got stuck with somebody else's CRM. So we can't really tell them what our needs are, what segment we are in, or anything else that might help both parties. We have to engage on the terms of the vendors only.

VRM is a concept about creating the tools to turn this CRM/lead generation formula upside down.

It reminds me a bit of the electronic invoicing and payment systems introduced first in the 1980s by companies like GM, and embraced on a much wider scale in the early 2000s. Companies were faced with miscellaneous invoicing formats from their thousands of suppliers, and were forced into a very inefficient process. Technology changed that, ultimately for the benefit of the suppliers and the buyers, although it was the large buyers who drove the development and adoption of the process. Just-in-time inventory really only became possible because of the infrastructure established around invoicing and payment, which could then be extended to ordering.

Zopa and Prosper -- the non-bank intermediaries in personal lending -- clearly share some genetic material with the VRM meme.

All rather exciting. And just when you thought the information age was starting to look mature and predictable. Surprise!

Resources:

Thanks to the Computer Assisted Management for Performance list at GoogleGroups for the heads up on this.

The Harvard VRM wiki portal is here, hosted by Harvard's Berkman Center for Internet & Society, and led by Doc Searls. The public broadcasting VRM initiative is here.

The RFP idea came from Phil Windley, here.

The server purchase example came from Don Marti, here.

More examples of other people writing on this idea are here on the wiki.

New media measurement tools: Xuuk

Eye-tracking technology is cool, but it's always been a kind of headset-and-wires operation, not something you could use in a real advertising setting.

Xuuk has launched a gizmo that can track eyeballs for posters, billboards and displays. It's a low-end disruptor -- and although it is unlikely to have all the functionality of laboratory units -- it's extremely cheap at $999. And it potentially brings a whole new group of customers into the market.

Xuuk claims to be able to detect eye-balls looking at it from up to 10 meters away. It plugs into your USB port, so you can look at statistics.

Like many technology crossovers born in academia, Xuuk could use a little marketing support to make their message clearer. But don't let that stop you. This baby could be great tool to refine your merchandising and visuals for those times when you don't have a big budget available.