Customer Crossroads

A three-part framework for creating breakthrough innovation

People talk about the high rate of new product failures (about 85%) as if there is no way to change it, and no way to understand the market. Like innovation is some kind of hit and miss affair, or magic. It's not.

Nielsen, a well known quant-focused research group, has been deconstructing and quantifying innovation successes for a few years now with the Breakthrough Innovation studies. I recently heard Lauren Galletta present at a professional meeting on this topic, and it was terrific stuff.

They have studied tens of thousands of product launches, and have strict criteria for being a winner -- there has to be something new happening (distinctiveness) not just a reformulation. The sales of the new thing need to be big enough to be relevant. And the sales have to continue at close to the launch levels for at least a second year.

Their framework for how to create these kinds of wins is this: Demand driven insight, demand driven development, and demand driven activation. Let's look at what they mean by this.

Where can you look for customer innovation opportunities? The hack

One of my favorite places to look for innovation opportunities are the "hacker" sites.

No, I don't mean nasty people spreading computer viruses.

I mean people who have found a way to work around a problem. Or customize a thing to their own liking.

Places like Lifehacker are rife with this, but there are many other sites that have similar clever consumers showing you how they do [something] with a gizmo designed for [something else].

Here's a great example from Lifehacker of people using coffee pots to cook light meals.

Surely this is an opportunity for a simple cooking device -- something the size and power draw of a coffee pot, but with a bit more flexibility.

Cooking breakfast with a coffee maker and an iron

Oatmeal in a coffee maker

Poach chicken in a coffee maker

An entire meal! using a coffee maker and an iron

So ... maybe you aren't in the small appliance business. Nevertheless, looking for hack solutions is a good way to figure out what people need that they don't have.

Sequencing, another way to innovate the experience

Innovation in a single dimension of experience can be a great way to turn a challenge (aka problem) around and see it from a fresh angle.

Out of home dining is a great place to look at examples of this.

Traditional restaurant dining works along these lines: see a master server (maitre d'hotel), get seated, see menu, order food, food is delivered, eaten, bill presented, bill paid, exit restaurant

Quick service, like a McDonald's, tends to look like this: see menu, order, pay, get food, find a table, eat, leave

Then there are a range of other variants, where servers might bring things to your table after you order at a central station. Nando's chicken is one of these. You order at a central window, then pay, then find a table, then get your food.

There are also places that let you order remotely (hello pizza delivery!), or order remotely for pick up.

Another industry that did this was general insurance. It used to be that you had to have the adjuster deal with your claim before you got any money. Then some innovators decided to give you at least some of the money right away, before the adjudication process.

A lot of process innovation comes from adjusting the sequence of events.

Takeaway tip

Consider the sequence of delivery of the elements in your consumption chain. Write them on a piece of paper. Mix up the papers. Describe a sequence for each random mix you come up with. Try not to reject it out of hand ... see if you can think of a way to make it work.

 

 

Real facts on innovation

There is so much talk about innovation that it can be hard to separate the facts from the bs.

Booz and Company's global innovation 1000 study has some fascinating actual data to report.

The actual graphic is interactive.

One thing that stands out for me here is that these firms are getting feedback at EVERY STAGE of the innovation process. I believe this is a key to success, and am happy to see that the leaders are proving that.

"We are seeing the first signs of a digital revolution that will transform how innovation is done" - Booz + Co

Social media analytics

Customer sentiment analysis (using automated tools to analyze social media sentiment) is ranked among the least effective on the customer insight grouping (see lower left in the graphic).

There are now a couple of hundred social media analytics tools, ranging from the expensive enterprise quality stuff (e.g. Radian 6, Conversition) to the free ones (searching on Google, Facebook, Twitter), and a bunch you have probably never heard of.

The challenge is going from sentiment (I like Pizza Hut better than Pizza Pizza) to something that will help you with customer insight and innovation.

The thing is -- you CAN get a lot of good insights from social media IMHO. But automated tools are not yet at the place where they can replace the insights of a human brain. The tools are great for tracking (Are more people talking about Toyota or about Ford?) and they are great for ensuring a firm can respond quickly to problems on social media (think Yelp reviews, for example).

But you still need a person to actually dip into those samples and try to understand what is actually going on beyond "mentions".

On a more philosophical level, is it really a good thing to have managers so far removed from customer concerns that an analytics engine does their thinking for them? Not in my view.

R+D spending, and staying out in front

I also loved the charts that looked at R+D spending over a period of several years.

The companies on this list are fascinating -- most should make excellent investments over the long term, and all are known for innovation.

Booz + Co highlights the use of digital tools, such as Caterpillar's use of digital immersion labs, where users can interact with products not yet built. This makes a lot of sense for Caterpillar (who makes BIG stuff). But might not be as necessary if your product is a little more prosaic. You can certainly use the old fashioned face to face immersion labs for many categories with tremendous success.

The point, I think, is not so much the "digital", it is the "immersion" in the customer's world.

However, the study also highlights the use of digital tools to improve productivity. Using 3D printing, for example, makes a great deal of sense as a prototyping approach. 

Fascinating data.

 

A modest proposal about procurement: let's turn the RFP process on it's head

The procurement process, and it's main product, the Request for Proposal or RFP, was once useful, but has become a barrier to innovaton and productivity.

Let's look first at the reasons why:

There is a desire for fairness and consistency.

While fairness is admirable when it is reducing corruption and patronage, it also suppresses merit. It favors the familiar. It favors the formulaic.

The investment of time is all on the side of the supplier.

The decision-makers sometimes decline to meet or talk to the suppliers being asked to bid. Usually. The rationale - hey, they're busy people, they don't have time for a bunch of conversations. This is a major suppression of collaboration and idea exchange, which again results in a suppression of innovation. Buyers who had to invest the time to actually talk to all suppliers would reduce their short list. They might stop focusing on price, and instead focus on judgement. Like who they are motivated to work with. Who they think is triggering useful thinking. Who has better ideas.

There is frequently no clear definition of the challenge, but there is sometimes a specification of solutions.

This is so upside down it would be laughable if it weren't so common. The best consultants are those that help redefine the essence of the problem, then engineer elegant ways to address it. Sometimes much less expensive ways.

Systematic extraction of collaborative effort. Lack of trust

It is through collaboration, especially in the discovery phase, that considerable value is added. If there is any hope of collaboration throughout the project, it should start at the beginning, when the work is being designed.

One of the worst parts of the whole procurement process as it exists today is that new relationships begin with a lack of trust and a lack of disclosure. Not a great way to start a working relationship where trust and disclosure are going to be absolutely essential for success.

When you are awarded a project under these conditions, you are often starting over when you actually sit down with the client.

The traditional RFP starts with the notion of specifying the process or "work product", and asking for pricing.

While this may make sense for road-building (road builders may disagree!), it rarely makes sense for the kind of squishy and amorphous situation that most business executives are facing today.

No budget disclosure

The underlying belief here seems to be that if you tell the supplier your budget, they will spend all of it. Or perhaps they will not fine tune their proposal enough, not be as aggressive as they could have been on pricing.

This lack of budget disclosure also leads to a frequently encountered situation. The client suggests they are prepared to invest in a BMW. So you propose a few options. BMW, high-end BMW, and perhaps a very nice Toyota, in case they didnt know what BMWs actually cost.

Client then discloses that in fact they were thinking in terms of a BMW motorcycle. Yikes. I just spent three days wasting my time and a bunch of other people's time designing the wrong thing.

Plus, there almost always is a budget. On a recent situation, a team I was on was asked to trim a very specific amount of money from a large quote, in order to fit a budget window that we had not been given. Where is the logic in this?

Let's turn this upside-down

Start with the investment

An improved RFP process would start with the investment -- what the client is prepared to pay for a solution -- and invite proposers to say how much they can offer within this budget (or perhaps less).

This approach would solve a problem that we often face as suppliers -- an unwillingness to state even a range of value. It means that the suppliers, without the benefit of looking at your financial information, have to determine what the value of a good solution is to this specific challenge.

But inside the firm, you do understand if it's worth $10,000 or $100,000 to get a grip on this issue.

This virtually guarantees you will receive a template solution. Or your bidders have to take some wild guesses about what might be going on and design to that.

Disclosure

Make me sign the non-disclosure, then give me some real disclosure to work with.

Focus on capabilities and fit, not pricing

You don't want to wear the cheapest shoes, do you? Did you choose your employees based on getting the cheapest people you could get?  Or were you looking for a combination of skills and fit? When you go for a haircut, are you going for the $10 standard bowl, or are you paying a fat premium for skill with scissors?

A focus on price can only be based on an underlying assumption that every haircut is the same. Of course they are not the same.

Knowledge-based services are not as fungible as they might appear on the outside.There are tiers of value. If you want the top tier, you have to pay for that.

It's time for a change

Managers regularly try to circumvent the purchasing process. I do not think they do this because they are lazy, corrupt or incompetent. I think this is solid evidence that the process is not serving them well.

All processes must evolve. It's time for purchasing to evolve to fit the needs of a knowledge-based economy and the need for innovation to drive competitive success.

Today's article was triggered by seeing a post on LinkedIn from Solution Focused Alan Kay, which instantly combusted with a pile of simmering frustration to produce this article. And therein is the virtue of collaboration -- the best stuff comes from human interaction, not isolation. Something to consider the next time you want to issue and RFP.

Related articles

Death by RFP: 7 Reasons Not To Respond

We have questions about your website RFP

Why you need to use all your plugs: innovating with your current capabilities

Do you have a tangle of cables and cords piled all over your desk? I sure do. My desktop now has two screens, but no built-in webcam, so there's a webcam velcro'd to the top of the screen. Which is used mostly for the mic for Skype calls, so is occupying a USB port.

My current desktop does not have a memory card reader, so I have one of those plugged in much of the time, for camera photos, digital audio, and digital video cards. But I frequently use a Flipcam, which also needs a USB slot.

My three iPad/pod/nano devices use two different cables, both needing a USB port.

But the key one is my beloved Plantronics ear-piece, which is in daily use. And of course needs a USB port! I usually have to unplug something else to charge it.

[I'm coming to the innovation thing... hang on a sec.]

So here's the crazy thing. My monitors have four USB ports, but only two of them are conveniently located on the side. So I never use the ones on the bottom. I had capabilities I could have been using, but wasn't.

A behaviorist might say this is due to the availability heuristic -- we are more likely to notice/use things that are easily accessible in memory. In other words, out of sight, out of mind.

My solution: plug the cable in to the inaccessible port, and leave it plugged in. So I notice the end of the cable. [Ed.: Gawd, Susan, that is so simple, surely you are not sharing this with us as an example of innovation?? Feeble indeed.]

Actually we all have -- either personally, or in our organization -- underutilized resources and capabilities. It might be people, or it might be an empty parking lot, or it might be USB ports. 

What resources and capabilities are lying fallow in your organization? How can you solve your problems by using things that are just out of sight?

Engaging your customers in charitable projects: ishareworks

I heard about an interesting business idea, where a promotional products business decided to let customers give away 10% of their revenue to registered charities. Kind of a nifty idea, and I had a chance to ask the business owner, Esbert Cardenas Jr., a few questions in an e-mail interview.

Esbert, I understand you have a program called iShare where you donate a portion of your profits to charities that customers choose. Can you give me a quick overview – how does it work?

iShare is a way for the customers of my business, Image Outfitters, to support charities that they care about with the money they already pay us. Without changing the cost of their order for custom promotional products, I give all customers the option of donating 10% of the revenue to the nonprofit organization of their choosing. This model allows for funding of hyper-local organizations in my customers’ communities, or donations to larger national charities—it’s not up to me, though. My customers can choose any 501 (c)(3) nonprofit.

I’m really interested in innovation, and this seems like kind of an innovative idea. What made you think of it?

Back in 2008 my wife Kirsten and I noticed that many of the nonprofit organizations that we supported personally were suffering from underfunding tied to the economic recession. The recession also hit small businesses like mine, so we thought of iShare as a way to attract new business while supporting a diverse group of charitable organizations. Our mantra is “Learn, earn, and return.” We spent 14 years learning and earning.  Now it is our turn to return to those in need.  This innovation has helped our business grow in a way that we feel good about, because our customers are helping so many nonprofits along the way. 

I’m curious about the reaction from your customers. Did you ask any of them first, or just launch the program? And how did that work?

We did talk with a few existing customers about the idea and kicked off the iShare program by offering the donation option to them. We wanted to make sure the program ran smoothly before launching on a larger scale.  Before we could make an official announcement, over $7,000 had been donated to charity.

Our customers love that they can give to charity with money they were

already planning to spend, and that they can choose any nonprofit. This option puts their money back into their communities, and that’s very important to a lot of our customers.  

Were there any speedbumps along the way – anything you had to change or rethink?

If I could go back, I think I would have kicked off iShare with a big formal announcement of the program rather than a soft launch. We weren’t entirely sure how our customers would react but with hindsight we would definitely launch iShare nationally from Day 1 if we could go back. 

What tips would you have for another business owner who wanted to do something similar?

I would say to go for it! Our customers love iShare because funding is restored to their charity without altering their budgets, and we feel satisfied knowing we can give back as well. iShare has attracted many new customers to Image Outfitters and the nonprofits at the center of the program are receiving new funding to support their mission. It’s a win-win any way you slice it.

Whether you’re a frugal business owner trying to balance corporate costs with charitable giving or a nonprofit executive director seeking innovative ways to fundraise, iShare can meet that need.

Thanks, Esbert, for a nice story to take into the Christmas season.

 

Innovation Strategies: Take what you do well into another environment

The JOI light is a lovely object, and a very cool piece of design and engineering. I saw the light in action recently and had a chance to speak to the company president, Tony Solecki. 

First let me show you the light. It is a set of LED lights powered by the heat of one tea light candle. The heat from the candle is converted to a current that powers the lights, and makes a brighter light than the candle makes. 

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You can see more photos on their web site, list of retailers, etc.

What fascinates me here, beyond the lovely design of course, is the core innovation strategy. This company has been making a product for some years now that converts heat from wood stoves into electrical current that powers a fan that sits on top of the stove. They were looking for more applications for this technology, and the net result is this cool lantern.

If you are looking for innovation in your organization, taking a strong capability from one place and utilizing it in another environment can be a very useful strategy.

There are challenges to doing this, of course -- one is that you may be entering new markets that have different requirements. But you are using something you know how to do.

In this case, the company already had good retail distribution partners for the fans, so adding a new product wasn't as much of a stretch to their marketing as it might have been.

Humans love to compare: People Like U makes it even easier

In my little neighborhood in a big city, the local talk generally follows the same few topics, which we all love.

A perennial favorite relates to house prices. How much did they get for (or pay for) the house? Did you get your new tax assessment yet and what was the value?

We ask about roof replacements, new driveways and air conditioning units. We'd love to ask about the cost of the addition to your house, but that feels personal, so we mostly try to guess.

There's a feature in my weekend newspaper called Financial Facelift that let's us all look at the financial snapshot of someone else -- while they get advice from a pro about how to save for retirement, or solve their financial problems. I'm sure it's one of the best read columns in the business section.

We all love to peek and compare.

A new service from an Australian bank lets people peek in a more organized way. People Like U let's you compare your spending habits with other Australians.

I particularly loved the easy-peasy 6 questions you use to categorize yourself in thedatabase.

Don't you totally wish you had one of these for your own region?

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My take

This interest in comparing applies to pretty much any human endeavor from sports to hobbies. If you are seeking a way to engage people more in your product, service or category, consider the possibilities of letting your consumers compare themselves to others.

Reverse innovation: a story that's just getting started

We may finally solve our productivity issues by looking to emerging markets for ideas. [The government and any number of think tanks keep telling me I need to get my productivity up. Pretty much the pot calling the kettle black, but whatever, right?]

I read a marvellous article about this recently, that describes a phenomenon called Reverse Innovation. Here's the definition:

A reverse innovation is any innovation that is adopted first in the developing world.

The innovators could be anywhere, it's where the customers are that is crucial to the distinction. 

Author Chris Trimble, a professor at Dartmouth College's Tuck School of Business, provides some interesting examples that challenge the common assumption that the Third World will "gradually catch up" by adopting products. Kind of a trickle-down approach to development.

The implicit assumption is that their problems and aspirations are the same. Except they aren't.

Logitech mouse example

Prof. Trimble relates the example of Logitech finding itself being outpaced in China by Rapoo. Logitech had a product line that offered increasingly powerful wireless chips only in their high-priced models, because that matches the North American market structure. 

But Chinese consumers are often using a mouse to control a monitor that is being used like a television (or actually hooking the computer up to the tv monitor). Cable is too pricey, so internet video is used for entertainment. A mouse used in this way needs to have a much longer range, only available with the better chip. The other high-end features are not needed for this purpose.

Rapoo, with their better understanding of the customers' needs, provided a stripped down mouse with great range at a low price point.

Change your thinking in five ways

Prof. Trimble suggests five key differences in LDC markets that you need to get your head around if you want to innovate your way to success:

1. The performance gap. Emerging markets do not need your low-end product stripped down and reduced in price. They need a radically redesigned product that delivers good-enough functionality at a radically lower price, matching the disparity in incomes.

2. The infrastructure gap. You can't assume the presence of the same kinds of infrastructure that we enjoy in the First World, whether it's land lines, power, roads, or anything else. Everything from battery life to how to recharge to durability has to be considered from a fresh perspective.

3. The sustainability gap. Environmental concerns will play out differently in these markets.

4. The regulatory gap. Like infrastructure, the systems of regulatory approvals and consumer safety laws are still forming. This can work in your favor or against you.

5. The preferences gap. History, culture, ritual and access to different raw materials has generated different preferences in everything from food to decor to social rituals.

Clean slate product design is the prescription Prof. Trimble offers, and he describes the approach John Deere took to making a tractor for India as an example.He also suggests that teams working in this way cannot also work on First World innovation efforts, because the mindset is so different.

My take

Emerging markets offer tremendous potential for growth, but it isn't a simple export opportunity. Immersion in the customer experience is essential for success, and the kind of innovation needed is more radical than the sustaining innovations that often work in the home market.

Scary yes. But also exciting! Perhaps even fun.

Resources

Reverse innovation and the emerging market growth imperative, by Chris Trimble. Ivey Business Journal, March-April 2012

Webcast on Creativity: Finding Aha moments

I'm headed to the annual QRCA conference in October, and am particularly looking forward to hearing a presentation on creativity from Dr. Joanne Brunn, who studies this sort of thing, and also has a lot of practical, real-world experience.

Fortunately for you, this particular presentation will be webcast (free). Here's the topic description:

Why is it so hard to get to that Aha moment? Creativity is often misunderstood and may seem overwhelming to put into practical use. However, we all naturally follow the creative stages of preparation, incubation, illumination, and verification. Through understanding these research-based stages of creativity, you will learn how to identify and manage the stages to encourage creativity. The stage that often gets neglected or outright prohibited is incubation – yet that is the major factor in getting to that Aha moment of illumination. Come and learn practical and fun ways to best take advantage of everyone’s natural creative flow.

To find out more and register for this Q-Cast, click here. These sessions are archived and can be viewed later if you miss the live session.

This event is unusual in that we don't allow a lot of veiled "pitching" -- presentations are usually excellent. So if you can't be in Vegas at the conference having a great time, you can take in some of the cool learning, and it's even free.

I'll be speaking as well, so will have to contain my partying. [I have a 9 am slot on a Friday, so wish me luck!]

Innovation in Government: Calgary raises the bar

On a recent visit to Calgary, I was impressed to learn about their parking meters. [Okay, I'm weird, but hear me out.]

Excited about parking. Really.

My business colleague input his license plate, then paid, but didn't have to march over to put a piece of paper in his car. This definitely got my attention. Then he told me he could add more money using his cell-phone!  I asked how the system was controlled, and he told me that cars with automated cameras drive around checking the lots. [So even that part is pretty automated!]

This was cool enough, but here are a few more things I learned about ParkPlus later:

• You can find out real time availability of parking spaces in city lots, and even get an RSS feed if you need it.
• You get a discount for a small car, because it takes up less room in places that are flexible, like on-street parking. Now that is seriously cool.
• Because the system is ticketless, they can collect parking fees from scooters and motorcycles. [As a scooterist myself, i kind of like the free parking I get in my home city Toronto, but governments need the bucks, so this is still a cool idea.]
• You can actually set up an account with them, and fund it, which you can then use your cell-phone to access

It's a pretty cool web-site, with well organized information, very clear, and looks pretty user-friendly.

Then I found out about their main web site.

It's not just their parking meters -- they are doing things with their web site that are even cooler. Here's the City of Calgary home page. Pretty, isn't it? So clean, so simple looking.

The image background revolves through a series, but the Bing-like search page, powered by Google, has the one search box.  It's not stuffed up in the corner, saying, in effect, "if you can't find what you need, you can try this". It says "how can i help you?" A bold step for a government institution.

There's an interactive map, a news feed streaming at the top of the main page, a calendar, and numerous other cool things. Every search I tried loaded with blinding speed. Who would suspect a municipal government showing leadership in web site design?

As Ivor Tossel said in a recent Globe + Mail article (how I learned of the web site),

"In the age of Google, most government sites still work like Yahoo did a decade ago."

To find anything in most city web sites, you need to know how the city is organized, so you know what department to look in.

My own city's site tries, but doesn't make it. See the screenshot below:

 

I did three searches on the site, and each one took me to a different landing page with different navigation structures. It would be much easier to just use Google, and not even try navigating through the city's structure.

I loved Ivor Tossell's conclusing remarks:

"The solution that Calgary adopted may be most remarkable as an act of institutional humility. Governments are big, complicated machines, and their instinct will always be to make a show of all the things they do. But Calgary’s site advertises nothing except its interest in what the citizen is looking for. Usefulness is the best municipal service of all."

My take

It's nice to see innovation that benefits taxpayers, isn't it. Have you seen any lately?  I love to have your comments, and publish anything that isn't outright spam.

 

Sugru - cool stuff to modify your own stuff

I stumbled across this interesting new product call Sugru.

It's sort of like plasticine with a purpose -- it hardens at room temperature into a soft, pliable, silicone rubber. It adheres to lots of materials, and you can form it by hand. (Don't you just want some already??)

Quite apart from the cool factor here, and the general usefulness of such a product, I think it could be awesomely good for design purposes.

Here's how we could use Sugru to support our own innovations:

• Watch the web to see what people are doing to modify products, especially YOUR product
• What new features are people making to standard products, such as bicycle pedals?
• How about giving people some Sugru in a customer innovation lab or workshop, and asking them to modify your product?
• Send people home with some Sugru, and visit their house a week later to see what they've done with it

The photo at top shows a great example of what I'm talking about, from one of my favorite innovative web sites, Instructables.

It's a camera that has been modified so it's easy to hold by a child, and won't easily break when dropped. The fun colors are just a bonus.

Here's the lovely video from the creator that tells you all about it.

 

 

The post-consumption era: this is the real end of the world you need to prepare for

There was lots of collective fun-making when the recently predicted end of days did not come to pass. "Rapture photos" were posted (empty clothes in amusing places), and there was a frenzy of Facebook status updates monitoring the fun.

The real Armageddon for most of us will creep up more slowly -- it's the shift many are predicting to a post-consumer culture.

Consumer Culture is the water we swim in daily

If you live in the affluent societies of the first world, the dominant culture is a consumer culture. A nice definition is available on the AQR website:

A culture may be understood as a pattern of beliefs, values, meanings and customs shared by a group of people, often existing at an implicit or taken-for-granted level. Consumer culture suggests that consumption - the act of buying goods or services - is a cultural activity, one imbued with meaning and driven not just by practical or economic factors. Mapping and exploring the business implications of these cultural meanings is one of the principal functions of qualitative market research.

Consumer culture is not the only thing going on, but it's a big part of our individual and collective mission to make meaning.

If you doubt this, here's a simple self-test for you -- name the first 10 brands that come to mind.

For most people, this exercise quickly becomes complex, especially if done in a group. Are you a Tide person? Are you defined by Crest? By Apple? By Mercedes? By Prada? By Black + Decker?

Global Alarming -- the forces driving change

There are signs that things are changing. Terrorism and the uncertainties it has brought to all of the first world (we now get to share the terror with the rest of the world, who never stopped experiencing it), is thought by many to be an important driver of cultural change.

Our increasing awareness that the planet cannot indefinitely support this level of abuse is another important driver.  It's not just air pollution now, or the holes in the ozone layer -- we have an abundance of environmental issues that are concerning: overfishing, extinctions, climate change, water shortages, melting glaciers, and peak oil, to name a few.

The global recession is another key driver here, adding an immediate need for many to look at their individual lifestyle and decide what is important.

What it all means for business and marketing

A nice piece of work from David Carlson called "Closed Wallets, Closed Minds" looks at this phenomenon from the designer's perspective. "We are increasingly suffering from consumption fatigue", says Mr. Carlson. Companies that want to be part of this change, rather than a victim of it, will need to "listen to what the consumer wants, rather than tell them".

Mr. Carlson posits that a relationship economy is forming, but admits none of us can really see the future.

Only the future will tell if the climate of anti-consumerism is genuine, or if we are only on a pause between mad bouts of bag filling.

It's a beautifully constructed report, as always, and will get you thinking -- as it did me.

What's your take?

What signs of change are you seeing? I love to hear your comments, thoughts and observations.

The virtues of simplicity, clarity, obviousness and elegance

This is an interesting analysis of the Steve Jobs phenomenon -- and speculation about whether Apple is actually his greatest product.

However, the thing that most stuck with me was actually how John Gruber captured the essence of the product philosophy: "Simplicity. Clarity. Obviousness. Elegance."

If we all made those four words our mantra for a week, our work would surely benefit, and so would the lives of our customers, clients, consumers. Thanks for those four words, John!

http://www.bnet.com/videos/the-steve-jobs-effect/395402?promo=664&tag=nl.e664

Trendwatching: Software as a service goes big: Bell launches business apps

Most of the stuff I get from Bell can safely be ignored, but this letter announcing "business apps" caught my attention.

 

So much is moving to the cloud, and this offering is quite interesting -- a set of curated applications that cover a wide range of business needs.

Possible Benefits:

• Instead of looking all over the web for an application that might be what i need I get a pre-sorted list
• Reasonable assurance about the stability of the underlying company -- compared to usually none if I am just buying software online
• Simplified billing potentially? One bill with supporting documentation that doesn't have to be downloaded from separate suppliers (one of my current irritants)
• Looks like quality stuff from what I can see

Possible Concerns:

• Like any SAS (software as a service), it feels fairly costly over the long run unless there is a collaborative element which would require me to have a server, instead of just networked PCs
• Long term worries about stuffing critical business applications into the cloud

The service I highlighted in the picture, for example, is something I would potentially use -- a service that converts digital audio into typed notes. I have seen services like this before, but without much assurance of quality, I have stayed with my trusty independent supplier.

I also noticed a mobile service scheduling application -- something I wish more delivery and maintenance services used. It might seem expensive as a service, but I'd guess that buying a license and keeping it updated is likely an expensive option too.

If I think about it, I'm buying quite a few SAS solutions already, and keep thinking about buying more. Some help to choose the right solution might be welcome to many smaller businesses.

My take

With the constant growth in new offerings trying to get our attention, a curated approach offers some potential real value to businesses. 

Is this really a utility trying to turn itself into a value added provider?? I'm amazed that they could launch something so potentially awesome and innovative.

What's your take?

Are you happy to move to the cloud and the SAS model? Or do you worry that it will be just one more chance to be on hold with a call centre for support? What other companies could do this credibly -- your bank, for example? What about someone like Staples or Yellow Pages?

Creativity exercises really do work to generate better ideas: new research into construal theory

Approaches to creativity and innovation have mostly come from individual hypothesis and craft -- people studying what they think works based on personal observation. Now, scientific research is starting to validate many of these approaches.

When working with a team trying to come up with new ideas, one very useful method involves taking the problem into another framework. (There are many ways to do this -- one example: ask people to imagine Steve Jobs or Bill Gates solving the problem instead of themselves.)

Scientists Evan Polman and Kyle Emich found students who were asked to solve problems requiring creative thinking did better when they were solving the problem for someone else, instead of themselves. One example: they were more likely to solve a "tower escape" puzzle, and created better aliens for a story when they were solving these challenges for another person, not for themselves.

The practical implications of our findings are striking in the extent of their reach...That decisions for others are more creative than decisions for the self is not only valuable information for researchers in social psychology, decision making, marketing, and management but also should prove of considerable interest to negotiators, managers, product designers, marketers, and advertisers, among many others.

The theory, called construal theory, is still being developed.

Resources:

Polman E, and Emich KJ (2011). Decisions for Others Are More Creative Than Decisions for the Self. Personality and social psychology bulletin PMID: 21317316

Via the British Psychological Society Newsletter: http://www.researchdigest.org.uk/blog 

Construal theory on Psycholopedia: http://www.psych-it.com.au/Psychlopedia/article.asp?id=79

 

Focus groups are a waste of time: or are they?

Researcher Chris Kann, (pictured left) and I spoke a while back about the reasons that people bash focus groups. The result of that discussion was an article that was published in Greenbook, called Don't Blame the Focus Group.

One of the most frequent negative examples trotted out about focus groups is the Herman Miller Aeron Chair story, a story of a very innovative product that was so foreign to consumers when introduced, that initial reactions were not all that positive. This story is often told as a cautionary tale about research -- it shouldn't be.

"That Herman Miller management chose to go ahead with a launch of the chair despite these findings and generated a massively successful product, is taken to mean the focus group did not do its job.

But perhaps this is a story of a focus group doing its job well, and management doing its job well too. Management knew what initial reactions to the new product would be and could plan accordingly. The history of the Aeron chair on the Herman Miller website in fact makes it clear that extensive consumer research, including focus groups, informed the development of the product."

We think it is pretty ironic that companies are invited to listen to consumers more, but only in certain ways.

I'm pretty sympathetic to the challenges of management in client organizations. So is Chris. The truth is, we've both been on the other side. Managers have to make a lot of tough calls, and they hope the research will help. And it often does help. But no research, regardless of method, can save leaders from the pain of making actual decisions, and some decisions will inevitably be wrong.

Bad research won't help your decisions much. But good research will save your hide over and over -- save you from making expensive mistakes, help you see the potholes in the road to success, and point to new opportunities.

Focus groups are not the be-all and end-all. But there's a reason they have stayed around, and it's because they are a good tool in the hands of a skilled researcher.

I'd love to hear your thoughts and experiences.

 

Resources:

Don't blame the focus group for leaders' shortcomings, by Susan Abbott and Chris Shields Kann, Greenbook, 2011.

About Bill Stumpf and Don Chadwick, designers of the Aeron Chair

Company history of the Aeron chair, including video with the designers.

Data visualization as a path to insight

I write a lot of large-ish reports for clients to capture the work I do for them. And I work hard to make them interesting, but at the end of it all, there's still A LOT of reading to do. And the clients are already swamped. Panic ... what if they never glean the amazing insights???

Solution: In the last few years, I've been trying to condense more and more of the insights into compelling graphics that condense and distill the key ideas into something memorable.

I was truly delighted to find a fellow traveller in this regard, Barbara Egel, a quallie based in Illinois. I attended a really great conference presentation with Barbara about a year ago, and she has recently written an excellent article on the same topic -- what she calls "the one page debrief."

Here's the link to the article: Meanings, Metaphors and Maps, the Power of the Visual Summary.

The challenge with this kind of thing is that you need a really great metaphor to link together your ideas. For example, I'm into a report right now where I'm using an iceberg as a metaphor.

 

I've used hills and valleys. I've created giant pipeline diagrams with whirring things at their centre. When unable to find a fabulous metaphor, I've used simple timelines or arrows between bits of stock art.

Finding a good graphics tool is of course tremendously helpful. I often use SmartDraw, which is not perfect, but it does simplify the process. You can do a lot with PowerPoint, but my advice is to stay away from the canned diagrams and figure out your own thing with boxes and arrows. Stock art can be helpful, too.

But I kneel at the feet of the graphic brilliance you can find here, the

50 most stunning examples of data visualization and infographics

A few of these are incredible, either for the information (like #22 about PETA), or for the graphic brilliance (like #6, the human subway map), or the great metaphor (#32, The Periodic Table of typefaces)

Kulula Airlines (#9) takes infogrpahics to the outsides of their planes. Makes me wonder what other businesses could do with murals, for example.

Need an edge in a competitive job market? You could try showing your stuff as an infographic, which is, let's face it, a lot more fun than reading a conventional resume (#13).

Thanks to @CBWhittemore on Twitter for pointing to the data visualization and infographics link

By the way, if you are interested in qualitative stuff, you can get our magazine Views free. Yes, free. Sign up here, or just read it online.

A bank introduces Woops feature: ING Direct New Free Chequing

I never expected ING Direct to launch a chequing account. Why enter the ugly and expensive transaction part of the business? Well, they have proved me wrong, and good for them.

Their new Thrive chequing promises to give back the average $185 a year Canadians pay in bank fees.The pitch: unlimited free chequing, and access to deposits and withdrawals at ATM machines. (ING has no branches, only a few ING Cafes in major markets).

The splashy launch included women in orange bathing suits jumping in fountains, billboards that reveal themselves when passersby remove coins, and fun contests.

The marketing message at launch: "Today we bring you Freedom." Nice insight behind that one -- speaks to deeply felt wishes, especially in a tough economy.

Where the Woops comes in

The Woops feature offers to cover your mistakes up to $250. A much better name than "Overdraft Protection" and again, speaks to the reality for most people, that an unintended overdraft is a mistake, not a moral failure.

There are also e-mail alert features included, to give people quick updates about their account balances. Another nice touch that acknowledges the reality that few people maintain detailed banking records now. And also leverages mobile without having mobile transaction capability.

How to reach people -- send the President to a shopping mall

Imagine a bank president speaking at a shopping mall -- that's what happened here. Of course ING Direct is a consumer bank, but even so, this is a big departure from the staid and stodgy approach we usually see.  And of course, what a great way to reach people from coast-to-coast, in a major tourist destination.

They've also added scarcity to the mix -- the account is only available initially to 10,000 of their million plus customers.

Yup, there's a social media strategy.

Finally, clever leverage of social media, with Flikr, YouTube videos, a Facebook site, and Twitter. With some content worth following, at least for a while.

Full disclosure

I didn't do the qualitative on this project. I just wish I had, because I think they have nailed it.

My take

So there's some new disruption in the marketplace. It should make for some interesting times.

What do you think?

More info: Finextra story, ING Thrive Microsite

Brilliant bank expansion strategy from TD: innovative thinking

Innovative thinking can touch any area of your enterprise, not just new products or creative marketing. Here's a great example of innovative thinking at work in a retail expansion strategy.

TD Bank wants to expand in the eastern US, and has decided to snap up old burger and chicken outlets and convert them to bank branches.

Great idea both for customers and for the bank. These kinds of locations are usually ideally situated on major streets and intersections, and almost always have abundant parking. Fast food places often have a lot of windows above table-top level, which is exactly what you need in a bank --  a bright location that doesn't show below the desktop level.

An added bonus will be that many locations will be set up for drive-through access, something that can take a lot of time to get through zoning.

For the neighborhoods involved, a bank branch is usually considered an upgrade from whatever commercial enterprise was there before. In some cases, I suspect that these conversions will support the local micro-economy, because the food places may be sitting empty now because of the recession.

So it looks like a win-win all around both for the shareholders and the communities. Nice innovative thinking.

Resources:

TD cooks up burger joint plan for new U.S. outlets, by Grant Robertson. Globe and Mail June 17, 2010

Full disclosure: I own shares in the parent company.But this isn't investment advice, so who really cares?

Talking e-mail: An interview with Adam Piandes of Goldmail

I wrote about an interesting product called GoldMail a while back, which triggered some correspondence with Adam Piandes there. He kindly agreed to be interviewed for the blog, and here's the result.

Adam, can you remind me what GoldMail is again – it’s kind of an audio e-mail with a slide-show, right?

GoldMail is a publishing tool that lets you quickly and easily create an audio-visual message. As an example, we say that GoldMail allows you to put your voice over Powerpoint because it resonates with the business user. But you can put you voice over any content – or combination of content - jpegs, PDF’s, screen shots, etc.

Once the slideshow is arranged in a compelling manner, it’s time to record your voice over the slides and then share the message, which you can do by posting it on your blog, sending it by e-mail or putting it on Facebook and other social media sites. It’s about conveying emotion, connecting with the viewer.

Combining audio (voice) with visuals touches upon two different learning styles and retention rates skyrocket versus just sending an e-mail or leaving a voicemail … it’s a simple process: Create, Record, Share.

You can view a quick two minute GoldMail I created for this interview here

Wow, I love that you were brave enough to put yourself out there for us like that. Thank you!

Can you give me a snapshot of the company’s history? Who started this thing and why?

The idea of GoldMail was “birthed” by Tom Hakel, our CEO and David Simpson, our president in 2006 as an audio-visual messaging platform. They were investors in a “more complicated” collaboration software project and discovered two things:

1) People are “over contacting and under connecting,” as live meetings were getting harder and harder to get; general business communications (i.e. email and phones) were not nearly as effective as in the past.

2) Most people don’t have much time to learn new software and they are not technically oriented – they just wanted simple tools that have an immediate impact. 

From the on-set, GoldMail has been affiliated with a non-profit organization that runs summer school programs for middle school youth called Aim High. This organization is a shareholder of GoldMail, and this relationship is a big piece of who we are and what we represent. Also, the founders – at the outset -- wanted to create a tool that would help all non-profits spread their message. It’s cool for me because I feel connected to a great organization and because I’m a huge believer that we will have a long-term impact on fundraising efforts by non-profits everywhere, as we’ve already proven so in several instances.

I had no idea of the not-for-profit connection!

Adam, I know you see this as a product that anyone can use. Which may be true. But every product has a sweet-spot, a natural market of people who really appreciate the benefits and drive usage. What or who is the sweet spot for GoldMail?  I’m guessing sales people working in B2B sales, but who is it really?

Yes, it’s true, GoldMail can be used by anyone who is looking to humanize their on-line communication and wants to easily send messages that people remember. B2B sales is a key area, and this has been one of the early sweet spots for us.

Sales people use GoldMail to get their value proposition across in a personal manner; it enables them to inject their personality and to connect with a prospect or client. It’s nice because a sales person can send out a GoldMail message and the recipient can listen to it as many times as they choose and then can share it with others.

Most of our conversations, at GoldMail, with partners/clients get started with a GoldMail message. I can send a GoldMail message to the recipient as a way to introduce myself and the partnership opportunity or to follow up from a previous conversation. The end goal is to get a meeting or to take a conversation another step further. The response has been great, as we’ve formed some great partnerships using this approach.

One of our partnerships is with Constant Contact. GoldMail now enables their customers to better connect with their recipients, whether it’s to drive sales, to send out a marketing campaign, for fundraising, send a celebratory message or advocacy. Regardless of the intent of the message, GoldMail adds the human element that is so important in establishing relationships and is missing in today’s on-line communication.

I use Constant Contact (as do many), and noticed that they had announced this feature. It seems like a natural fit. Anything else?

We also see a lot of people using GoldMail for internal communications. I create a two to three minute GoldMail message for my CEO at the end of the every week to give him an update on all of my happenings on the business development side. He receives a GoldMail message from all of our departments and in 15 to 20 minutes, he has a great understanding of what’s happening in the company.

Of course, he is involved in the company on a more intimate level, but these GoldMail updates save him a ton of time. On the flip side, he sends the company internal updates on GoldMail’s progress and provides our investors with updates as well.

I love getting a GoldMail message for company updates because it makes me feel included and I always have a general sense of “who’s doing what” but more importantly, “why” they’re doing it. I know that our investors love getting these messages as well.

I hadn't really thought about the internal communication angle, but it makes sense. I think we're all hungering for some human touch, and corporate communications can certainly use humanizing.

What about your raving fans -- what can you tell me about them? Any compelling anecdotes you can share? 

We have fans from all walks of life. From the CMO at Accenture who uses GoldMail to add impact to his most important messages going to their broad management community and senior leaders to an area manager, working out of her home, for a well respected direct-selling company, who uses GoldMail to “increase sales by $2,000 in two days without picking up the phone.”

We’ve had so many incredible stories of how GoldMail has helped people communicate and improve their business; there’s one that sticks out for me.

One of our customers sent out a GoldMail message to notify their customers of some changes to their website. They received a bunch of requests for more information and one of these requests led to a conversation with a project manager that landed the company a $200mm project. They claimed that this never would have happened if they had not been using GoldMail to stay in touch with their longtime and new clients. Not bad for a $10/month investment.

A $200 million project, and they leveraged Goldmail. That's a pretty amazing story! I may have to rethink this ....

You and I chatted about a freemium model. And I see you have now launched this.  Dare I say "What took you so long?"  What kind of impact is this having on usage right now? What do people get for going from free to paid levels?

Ha! Yes, it has taken us a while to realize that people want things for free, hasn’t it! We sort of went about things in an atypical order to how you see things unfold these days. For a few years, we charged people for GoldMail by either a monthly or annual rate and in doing so, it forced us to learn more about our customers. We’ve been able to refine the product and get it to the point of where we are today. We have thousands of paying customers and recently launched our free version; we know that people will pay for our business version and for our enterprise version, which we’ll officially be launching in the coming weeks, so the upgrade path has been proven.

With the launch of the free version, the doors have opened for more partnership opportunities and the downloads have gone up significantly. As the word starts to get out on GoldMail and more and more people receive and see GoldMail messages, I believe the downloads will go up exponentially. GoldMail is unique in that it has proven to be an extremely useful business tool and also has a viral feel to it, as more often than not our customers come to us as a result of receiving and/or seeing a GoldMail message. 

That makes sense to me -- that people would experience it, then be interested in trying it.

The upgrade from the free (personal) version to the business version gives the end user longer recording time, unlimited active messages, full branding capabilities, reporting and tracking on the back end, the ability to administer multiple accounts and 24/7 phone support. For our enterprise version (GoldMail Synergy), a company has the ability to preload templates into multiple GoldMail accounts. For example, a marketing team can create the images and scripts for their sales team and then upload and edit these templates into each sales person’s individual GoldMail account. This way, the sales person can login to GoldMail, select a template for their message, record their voice and send it off to a prospect or client.

Well, I can't say that I'm a big fan of scripts... but I know organizations often are. No doubt many sales people do not have your skill or finesse, Adam.

To wrap up, what do you think the future of this market looks like? What will GoldMail be offering in a few years, and what will we all be doing with e-mail (or whatever replaces it)?

Our goal when we started GoldMail was that “one day, everyone who communicates across the internet will use GoldMail.” Our focus is to provide people with a tool that is easy and non-threatening and enables the creation of a personal and powerful message in minutes. GoldMail gives people a wonderful publishing platform to express themselves and to stay connected to others.

I think we’re going to see a lot more GoldMail messages being created by people who have “something to say,” an idea to share and will use the tool as a means for creating interesting content.

I’ve always believed that GoldMail is the perfect tool for the blogging community. Firstly, when used selectively, a good blogger can insert a GoldMail to connect with their readers and to add a voice to the person behind the blog. 

More and more bloggers are using video these days and video can be cool and a very useful tool, but I often find it difficult and not very appealing or engaging to watch a person talk into a camera. GoldMail differs in that it doesn’t “force” someone to get in front of a camera and it allows the recipient’s mind to effectively be stimulated and to retain information with the voice and visual combination. It also allows the creator of a GoldMail message to speak over graphs, pictures, data and other content that isn’t easy to share using a video camera. And, most of all, it’s very cost effective and very easy to use.

Getting in front of a camera is indeed a whole bigger level of commitment than just recording to slides.

We anticipate launching both a mobile version within the next few months, and GoldMail will add other requested features, but will always maintain the product’s simplicity and ease of use.

There are so many different means of collaborating with people these days; it will be very interesting to see what we’ll all be doing with e-mail. We’re excited because regardless of the platform people use to share information i.e. e-mails and social media, GoldMail will always enable people to communicate and “connect” with others with a personal touch.

Adam, this was great. Thank you for your time, and for telling us about the business. Personally, I'm getting so much sales-oriented e-mail that asks me to do all the work, that this could be a relief. I and the readers here will be interested to see how this evolves. Good luck with the business!

I’m not a regular blogger but thought it would be fun to demonstrate how GoldMail can be used in a blog. Thank you!

Adam provided a link to his blog, where he has embedded a Goldmail message. Click the image to see/hear it.

Legal agreements: how simple systems evolve into nightmares

When I'm not blogging, I actually run a research + consulting enterprise. One time some years ago we bid on -- and landed -- a contract for a large municipality. They required us to have insurance. And so it began.

Somewhere in the distant past, insurance had its origins as a way of pooling risk. Everyone pays a little, and then if your ship sinks or your house burns down, you have that major loss covered. Absolutely brilliant idea.

I like to imagine that these early contracts were pretty straightforward. Then some fool or crook set fire to their own house, and the first exclusion clause was created. 

You can see how these things work, really. First, a few simple exclusions. Then some contracts are disputed in court, so the language becomes more precise. Then other things happen and more exclusions are needed.

After a few hundred years of this dance, we now have insurance agreements no-one can understand. My commercial policy has a printout of dozens of pages, and this is the short form! Even the summary document is mystifying.

It might as well be Latin

We pretty much have to take it on faith that there's something there for us if disaster strikes.  And it's not just insurance contracts. I feel the same way when I click the "Agree" button with every application or online service. Not to forget the waiver you sign whenever you go skiing or rent a canoe. Then there are the multi-page confidentiality agreements that large clients insist we sign. 

Like parishioners before the reformation, we know there's some important message in the service, but we never learned to speak Latin.

And it's just as well. Because when you do know what it means, it can scare the heck out of you. I've seen a few of these that are pretty onerous. I told one client something like this: "If you don't like what I do, you don't have to pay me. But you can't take my house." Thank goodness they agreed to remove the offending clause, because we wanted the work.

There's an opportunity here

This year, another massive policy increase has us shopping around.

All of the forms and questionnaires seem to have been created for people that drive dozers around, build bridges, and otherwise do concrete STUFF.  When you work in the airy-fairy world of ideas, which is pretty much our stock-in-trade, it's hard to connect.

I think there is a huge opportunity here for some innovative organization to clean up in this industry. Hire us, and we'll help you figure it out. And I'll be first in line to sign up for the policy.

Innovation, failure, and how to manage both

I saw a couple of things online about innovation management that got me thinking about managing innovation and managing the cost of things that don't work.
First, James Gardner's post on how to select an innovation consultant. And then a discussion in LinkedIn about benchmarks for tolerable levels of failure in innovation.

Even venture capitalists don't like to fail

If we looked at the world of venture capital, the ratio of invested-to-success is quite low - perhaps one in 20 to 25 becomes a real commercial success -- another five are "living dead" operations that have little potential for high returns, and the rest do not return the capital invested. This is one reason VCs seek opportunities that have potential for massive returns -- because the winners have to make it big to make the whole portfolio successful.

Key idea: Only VCs are in the venture capital business. The real risk tolerance of executives in operating companies is much lower than this. And the returns possible from successful innovations in many businesses can't cover this level of loss.

Even poker players don't go all-in right away

However, even Venture Capitalists and poker players phase their investments.
In innovation, this is often done using a stage gate model. (Here's a nice overview of stage gate)

As James and others advocate, it's better to manage innovation as a portfolio of ideas at various stages of development. I have found Rita Gunther McGrath's ideas about real options reasoning very helpful in this respect -- even as a guiding principle. 

Even without all the academic language, it just makes sense to say you have ideas at various stages of development, and you limit your investment accordingly. 

Key idea: Good managers naturally limit their exposure to risky undertakings. A good innovation process puts some structure around this idea.

Goals and scope are crucial

No organization wants innovation in every area of their business all the time. No one has the people and resources to sustain this, for one thing. For another, you may have just launched a business model, and want to give it time to run in the marketplace, not be changing it every quarter.

The organizations that are the best innovators are clear about where they want innovation: they don't just say "go forth and innovate."

For example: advertising agencies want innovative thinking in the work, but not necessarily in the process that produces the work. Investment banks want innovative thinking in the creation of deals, but not necessarily in how the deals are documented.

Key idea: Leaders need to be clear about where they want innovation, and what kind of innovation they are looking for. Do you want innovation in internal processes, such as expense handling? Or in customer-focused areas, such as new products or creative marketing?

Process is also pretty important

An innovation process doesn't have to be a bureaucracy. It just means people know what to do with an idea, and that is some method for determining how good it is, and how to go forward with it.

Without some kind of process, you will lose many of the ideas created. And all the cross-functional teams that gave up time to help in the creation will wonder what the point was.

Key idea: Organizations have processes for everything: hiring, firing, payroll, capital expenses, marketing campaigns. If you have no process for innovation, you either have no innovation, or it's chaotic.

What's your alternative?

The alternative to having a managed innovation process is to just hope for the best. If an organization does not have some approach to becoming better, it has decided that the status quo is acceptable. When you put it that way, you realize that every organization DOES have an innovation philosophy, whether it's explicit or not. 

In business school, I learned to call this option, and evaluate this option, as the "do nothing" option.

Key idea: A non-choice is always a choice, and this is true of innovation,too.

Rome wasn't built in a day, and neither is your innovation process

• Develop a process for capturing and managing ideas 
• Develop some guiding principles for evaluating ideas that are in your idea pipeline 
• Use risk and cost-containment measures for testing new ideas, including marketing research, prototyping, pilot tests, and good project management practices
• Keep the scope within the grasp of the resources you can devote to managing it

Resources:

I found this book very useful, and the ideas don't quickly date. Meatier than most business books.

McGrath, R. G. & MacMillan, I. C. The entrepreneurial mindset : strategies for continuously creating opportunity in an age of uncertainty. Harvard Business School Press, 2000.

I see there is a new one out that looks interesting and covers similar ground, although I have not read it yet.

McGrath, R.G. & MacMillan, I.C. Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity . Harvard Business School Press, 2009.

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 [email protected] 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.

What's YOUR opinion about innovation

I've been involved in an extended project on innovation, sponsored by Schulich Executive Education Centre, part of the Schulich School of Business at York University. The reports -- which are free -- are summaries of conversations of people like you on topics related to innovation, and include a large number of very cool quotes that I think you'll relate to. Keep reading to download the reports, learn more about the upcoming book, and add your point of view on innovation.

Is it time for Air Laws? Or just more thoughtful design?

I discovered the Zeitgeist blog when Bill Geist linked to my piece on yield management in travel, and what it's done to the experience.  And discovered his excellent list of Air Laws -- the new rules designed to restore civilized behavior to air travel, ensure that space hogs don't take up all the storage, and that big guys get the emergency exit row seats. [I confess I don't totally support that one, unless we could reduce the height restriction to 5'8" ...]

Law #8 about crowding around baggage carousels particularly resonated because the baggage thing seems so unnecessarily badly designed.

All it takes is for a few people to crowd in, and then no one can see. You can't enforce polite behavior, but you can design things in such a way that they signal what is expected. I've spent countless hours waiting for my bag and observing this phenomenon in detail, and have a couple of ideas.

• Signal a no-crowding zone with different floor markings, perhaps even vertical elements like short pillars that show people where they are supposed to stand. These seem to do the trick nicely to prevent people crowding the exits in airports -- those waiting for arriving passengers to leave the secure baggage area.

[I learned via Bill that a guy named Chris Maland has built a web site dedicated to this idea.  I prefer my  no-crowding zone name to his proposal.]

• Build angled mirrors over the carousel, just like the cooking shows have. So we can see if our bag has arrived even if the front is crowded

• Put a video camera on the business end of the chute with several large screens, so you can monitor without crowding.

Of course, none of these measures will help those who obsessively check every black bag tag to be sure it's not theirs. [Buddy, see those red plaid ribbons? Keep your paws off.]

Bill also pointed to this wonderful destination marketing campaign about aliens that love New Mexico, 'the best place in the universe". Very innovative marketing that carves out a unique position.

Two events you need to know about: Ideas and Innovation

I'm delighted to be attending two cool events in June that you should consider adding to your calendar. Both these events have the potential to refresh your thinking, and recharge the spirit. Plus, they are both highly participative, so you'll get a chance to really engage with the ideas.

Business Pulse '07 -- Innovation Summit

Where: York University Executive Learning Centre, Toronto

When: June 5, 7:30 am - 5 pm with reception following

A one day event that will wrap an 18 month research project on best practices in innovation. Good speakers, and an interactive program will make this a memorable event. Hosted by Schulich Executive Education, York University.

The conference web site is here, or you can go directly to the brochure by clicking here.

[Full disclosure: I'm part of the facilitation team.]

Idea City

Where:Toronto

When: June 20, 21, 22

Three days of stimulating speakers and engaging with others around ideas. What could be more fun?

I've been hearing about this event for years, and this year I shifted my continuing education budget around in order to attend. [People tell me it's life changing. In a good way.]

The event site is here.

I'll probably blog about the event while I'm there, but wouldn't you rather be there than just read about it? Tickets are now getting expensive, but there are still one or two early-bird tickets around. If you want to snag one, please e-mail me.

Innovation Watch: Moo Cards

When I heard about MOO cards, I was so tickled I had to have them.  And now my blog has its own business cards, with graphics used in the blog.

MOO cards are smaller than a business card, and printed on very nice stock. They arrived in a little white plastic box with a colorful label, and a card that says "Yay! You're our new best friend."  Another MOO card, of course.

What's the beginning of the experience like?

What a delightful thing when it arrived, looking more like a new i-Pod than a box of business cards. It made me realize how deficient and un-exciting the arrival of a regular box of business cards has been in the past.

If you want to re-think customer experience, you might consider what the 'unpacking' or 'entry' point looks like. Is there anything to delight the senses? Do people enter your premises with anticipation?

Personalization and Co-Creation

Moo lets you create your own card using a simple online interface. If you want, you can upload your own photos, and slide a little editing window around on each one to pick exactly what will go on your card.  Up to 100 different images. [At last, another use for all those graphics created for the blog!!!]  Or you can use MOO's images.

These are cards I would hoard if I didn't want so much to share them.

And they arrived faster and more painlessly than any business card I've ever ordered. Okay, they don't have custom print colors, but so what. They are uniquely mine. Something MOO and I created together. And of course the unit cost is much higher than a regular business card, but the value is so high, it feels like a bargain.

So now my blog has its own business card. It won't be original for much longer, now that I've told you. So don't tell too many people okay? Only the cool kids.

Creativity Week Workshops

Ontario College of Art & Design (OCAD) is a great place to kickstart creative thinking. I knew little about International Creativity Week or Day but the workshops sounded interesting, and the price ($20) was totally awesome. Plus they were promising free sandwiches and cookies. What did I have to lose?

How can you not be energized by this amazing building on stilts? I actually got to ride up the elevator to the top of the box on stilts, and stroll through the industrial design studio space on my way to the workshop. Bonus!

First workshop was "Admit it. You're a Designer!", led by Jules Goss, chair of the Industrial Design Program at OCAD. [And Graham Hufton of the Toronto Rehabilitation Institute]

The workgroup I was in generated a wonderful list of possible design problems to solve using design thinking, which kind of represents a zeitgeist of this moment in time for this group:

1. Replace the styrofoam meat tray
2. Pollution
3. Commuting
4. Information overload
5. Enjoying your digital photos
6. Real sizes for real people
7. Green food supply
8. Paint that changes it's own color, or other solutions to avoid needing to paint
9. Guns in schools
10. Workplaces designed for moms
11. Understanding new technology
12. Security process at airports
13. Baggage pickup process at airports
14. Size of print on all packaged products
15. Better label for the segment currently called 'seniors'

And the one we decided to work on: A cell-phone designed around the needs of 70-somethings who don't currently use cell-phones, but might like the benefits they offer.  There's our team of wanna-be designers.

So what did I learn? That design thinking is really a pretty natural structured process of defining a problem, and the parameters of a good solution before creating a lot of ideas and possibilities:

1. Problem Definition
2. Research / Context
3. Ideation
4. Evaluation
5. Development
6. Output / Resolution

followed by validation of the solution in the market, testing, iteration, and cycling back to Step 1.

On to the next event, where the very high-energy coach Warren Coughlin helped us tap into our inner entrepreneur in Create The Entrepreneur.   

Warren's main message: "If you want to HAVE more, you have to BE more and DO more," expressed as the formula, BE x DO = HAVE.  Warren says: "What you have right now is a function of who you are right now, and what you do right now."

Perhaps familiar to you if you have ever tapped into the well of motivational literature, but I liked it. What's more, I left the room feeling re-energized, and with a renewed sense of determination to follow through on things I want to make happen.

Life Lesson
I left the evening speculating about how wonderful my city would be if everyone was involved in something like this on a regular basis.

April 21 is Worldwide Creativity & Innovation Day

It's not too late to plan your own little local event to celebrate worldwide creativity and innovation day, on April 21. If you want to kick-start some innovation in your organization, large or small, even if you're a company-of-one, I encourage you to check out this site for some ideas.

Last night I attended one of their workshops. Three hours of great value, good ideas, and general inspiration for a mere $20. More on that in the next post.

Resources:
Creativity Day organization main site with global contact information: http://www.creativityday.org/index.htm

Greater Toronto Area (GTA) committee site with events listings: www.creativityday.ca

Tips for getting started: here and  here

Reference list of methods: here

Leonardo DaVinci Awards video: here Presented to organizations in various categories in connection with Creativity and Innovation Day.