I’m travelling through Asia on the way to London at the moment, and so will be posting less regularly until I’m back in the office in early December…
Month / November 2006
Malcom Gladwell on the fringes
Malcom Gladwell comments on the fringes that exist within an organisation in his article for the New Yorker about workplace design.
More precisely, as one study after another has demonstrated ,the best ideas in any workplace arise out of casual contacts among different groups within the same company. If you are designing widgets for Acme.com, for instance, it is unlikely that a breakthrough idea is going to come from someone else on the widget team: after all, the other team members are as blinkered by the day-to-day demands of dealing with the existing product as you are.
Interview with Tony Ulwick – author of “What Customers Want” (final part)
(continued from Part Three…)
8. I think there is a lot written about innovation, but very little about actually how to do it successfully, and in a repeatable fashion. What are your thoughts on this?
I agree, a lot has been written – most of it about over arching innovation theory, not much on the practical science of innovation. That is what makes us different. Uncovering these “truths” about innovation – and writing about them in books such as What Customers Want – has been a difficult and time-consuming process. Not many people have had the laboratory environment we have enjoyed to make these discoveries, nor have they had the desire to reveal what is in the black box.
We have made public our 8-step innovation process and we explain (in a great level of detail) how innovation works and how to execute the process. Our goal is to make outcome-driven innovation the new design for six-sigma standard for innovation. Our programs for innovation provide serious practitioners with the detailed knowledge and tools they need to achieve success within their company.
9. Do you think that as the area of innovation matures, there is a trend for companies to move away from blue-sky type work and into a process led innovation style?
Absolutely – it must become process orientated to ensure predictable results. In fact all types of innovation initiatives – growing core markets, capitalizing on adjacent opportunities, disrupting existing markets and discovering new markets – are becoming process led. Once companies integrate this thinking wholly into their structure, they will experience a dramatic return on their innovation investments.
The transformation has already begun. With the acceptance of the StageGate process to guide product development efforts, companies are placing greater importance on ensuring only winning products enter the development pipeline. Applying outcome-driven thinking to the “discovery phase” (phase 0 in the StageGate process) enables companies to achieve this goal. I believe our thinking will proliferate once this connection point is well understood.
10. What’s the online resource you use the most in your work?
Other than our own Tool Library portal and IMSnet – our web-based data analysis and reporting tool, I use Google to conduct research and CEO Express to help with productivity.
HBS interview on Time Pressure and Creativity
Harvard Business School professor Teresa Amabile is in the midst of a ten-year study looking at, among other things, how time pressure in a corporate setting affects employee creativity. Interviewed here she talks about how her study is the first to empirically study creativity in the wild.
By stripping out assumptions and myths about creativity with solid research, she has uncovered some interesting things about creativity, which, in turn, has serious implications for innovation.
Overall, very high levels of time pressure should be avoided if you want to foster creativity on a consistent basis. However, if a time crunch is absolutely unavoidable, managers can try to preserve creativity by protecting people from fragmentation of their work and distractions; they should also give people a sense of being “on a mission,” doing something difficult but important.
Her study has also uncovered insights into how to encourage creativity. Amabile goes on to say that
…our research suggests that managers should try to avoid or reduce the “obstacles to creativity” (time pressure and organizational impediments like political problems, harsh criticism of new ideas, and emphasis on the status quo) and enhance the “stimulants to creativity” (freedom, positive challenge in the work)
On a slightly different – but still relevant note – she talks about a study she did a while back about creativity and motivations. Amabile found that artists were significantly more creative when intrinsically motivated (e.g. by the interest, enjoyment, satisfaction, and challenge of the work itself) as opposed to when given large sums of cash and being told to produce something creative.
This reminds me of the story about the Motorola team that developed the Razr phone. They were given all sorts of perks based on the success of the design, but in an interview one of the team said that the greatest reward was the most unexpected. Out of the blue, the key members of the team were asked to attend a meeting which they had no knowledge of. One by one they were bought in. They walked in to face the board of Motorola, who then rose as one to give them a sustained standing ovation.
Now that’s what I call a reward.
McKinsey article : Reinventing innovation at consumer goods companies
The latest issue of The McKinsey Quarterly has an article titled “Reinventing innovation at consumer goods companies.” If you’re in this sector, it’s a relevant and insightful read. If you’re in a product design company, it’s old news.
Nevertheless, the highlights are worth digesting :
On predicting the success rate of new products :
“Consumers are notoriously poor at articulating needs or benefits beyond those they have already experienced: when asking them to imagine true innovations, companies get mixed results at best”
On innovation outside the core :
“…a recent analysis across major consumer goods categories demonstrated that the overwhelming majority of US patents arose outside the top seven global consumer goods companies. In the laundry and home care category, for example, 95 percent of the patents filed from 2002 to 2005 did not originate within them. Indeed, the leading companies constitute only a tiny fraction of the world’s consumer goods innovators.”
On sourcing new ideas and the requirement for peripheral vision :
“…our research suggests that few companies look beyond their advertising agencies, to the many alternative external sources of insights: suppliers, venture capital firms, entrepreneurs, and inventors. This oversight may prove costly, since external partners can spot trends, create competition for complacent in-house teams, share technologies and manufacturing processes (in some cases developed for other purposes), and even craft fully developed product concepts. […] Given the power of outside ideas, companies should experiment with various approaches for sourcing, jointly creating, and commercializing intellectual property with external partners.”
The article concludes by saying something that will ring true with many industrial design companies :
Such approaches [to success] might, for example, include iterative rapid prototyping, which uses product concepts to create an ongoing dialogue with consumers whose comments shape the design throughout the development process.
Interview with Tony Ulwick – author of “What Customers Want” (part 3)
5. Since your book came out, what has been the reaction to the idea?
Generally, once people understand the fundamentals of what we are describing here, they love it – it has logical appeal. After all, we are simply saying that companies must uncover and prioritize their customers’ needs and use that knowledge to drive innovation. This has been accepted thinking for decades. Outcome-driven innovation is different in that it incorporates new ideas about just what a “need” is and how they are captured, prioritized and used to drive innovation. It brings needed precision to the process of innovation, transforming it from an art to a rules-based discipline.
6. Is there a particular sector/area where outcome based innovation is best applied?
For a theory to be sound, it must apply in all situations and circumstances. From our experience, outcome-driven innovation theory can be applied in all circumstances and situations as it is focused on the very fundamentals of innovation. We have achieved success in B2B and B2C environments, small medium and larger businesses and in nearly every industry you can image – from heart defibrillators and consumer products to bananas and insurance services – from enterprise software and printers to chemicals and ware washing equipment – the applications are endless. The thinking can be applied to any situation in which a person or a company is trying to figure out the best solution to satisfy a set of customer outcomes.
7. Some people I have talked to about the concept think that it’s Marketing 101
– understanding the customer. How have marketing teams reacted to the process?
Understanding the customer is Marketing 101 – but companies continue to fail to get it right. Why? Because most innovation processes lack standards and precision and instead breed variability – the enemy of predictable innovation. For example, to this day companies unknowingly collect several types of inputs as part of their VOC efforts, e.g., a mix of solutions, product specifications, needs, wants, must haves, exciters, latent needs, delighters, benefit statements, etc. In reality, these are all different types of inputs with different purposes, structure, content and format – and it is this inconsistency in customer inputs that breeds variability and failure throughout the innovation process. As a result, companies are not effectively addressing customer needs as evidenced by the dismal rate of new product successes.
Marketing teams that realize they can get more out of their innovations programs love our model – it addresses many of the challenges they have faced for years. If you look at our client portfolio you will see that it is the more sophisticated companies that realize that the process is broken and precision is the key to success. Many companies, however, still think that any customer input is a good input – this old thinking will change as the more sophisticated companies pull away.
Interview with Tony Ulwick – author of “What Customers Want” (part 2)
3. How would you describe your process?
In my recent book, What Customers Want, (McGraw Hill, 2005), I reinforce the theory that customers buy products and services to get jobs done. [Harvard Business School professor Clayton Christensen introduced this terminology in The Innovator’s Solution. He also cites my work in his book as we have been pushing this thinking for years.] If a company wants to think like a customer, it too must focus on the jobs the customer is trying to get done. This point has far-reaching ramifications.
When the job is accepted as the unit of analysis it means that companies must not capture requirements on a product or service – rather they must capture requirements on the job or jobs that the product or service is intended to perform. This means that instead of asking customers about improving a product, VOC practitioners must be more process focused and
(1) deconstruct the job the customer is trying to get done into process steps, and
(2) determine what metrics customers use to measure the successful execution of the job.
We call these metrics the customers’ desired outcomes. [I first introduced this thinking in the January 2002 HBR article, Turn Customer Input Into Innovation]. We have developed over 40 rules regarding the structure, content and format of these statements. Precision is the key to removing variability from the process.
A customer need, then, is defined as the customer’s fundamental measures of performance associated with getting a job done. This is a critical point, because after these metrics are uncovered, they are prioritized to reveal which are highly important and poorly satisfied (underserved) – thus revealing the best opportunities for growth. This valuable information (which is what I was looking for back in the days of the PCjr) is then used to prioritize the development pipeline, brainstorm new ideas, evaluate product concepts, communicate a products value, etc.
4. What’s an example of an organization that has successfully used the process?
Over 10 years ago Cordis Corporation (now a division of J&J) used it to define a new line of angioplasty balloon products which drove their market share from less than 1% to about 20% in 2 years, placing them in the market leadership position. Bosch Power Tools used this approach to create the award winning CS20 circular saw – giving them a wining entry into a highly competitive and mature North American market. More recently, Microsoft has adopted this thinking and completed dozens of projects aimed at identifying and addressing opportunities for innovation. Other companies that have successfully used the approach include AIG, Kimberly Clark, HP, Chiquita International, Cargil, Allstate, MetLife, United Technologies, Dentsply, Ecolab, Unilever, and the Harvard Kennedy School of Government.
Nicholas Negroponte on the fringes
New ideas do not necessarily live within the borders of existing intellectual domains. In fact they are most often at the edges and in curious intersections.
The history of Innovation Tools
In his latest Ice Update, Eric Mankin of Babson points out that incentives to spur innovation – such as the X Prize – are not new. In fact, they’ve been around for long time. One of Mankins readers – Parker Neal – points out :
In 1919, a gentleman named Raymond Orteig offered a prize of $25,000 to the first person who could fly an airplane non-stop between New York and Paris. The Wright Brothers had left the earth 16 years earlier, but flight hadn’t grown rapidly … Orteig thought it was time for that to change.
Hubert Julian, Rene Fonck, Charles Nungesser, Francois Coli and others tried and failed. Nine teams in total spent around $400,000 to try and win a prize that was 1/16th of that amount (hardly cost effective). But Lindbergh succeeded. He promptly became a national hero. Air flight took off.
Mankin also mentions that other innovation approaches have long precedents. Thomas Edison blazed the path for effective innovation environments when he established the innovation factory in Menlo Park. Edisons approach was team based and used rapid iterations of prototypes.
Sound familiar? Hello Ideo. Hello What If….
Note : Eric Mankins updates are usually email only. Some of the older ones can be found here.
Interview with Tony Ulwick – author of “What Customers Want” (part 1)
Over the next week I’ll be posting an email interview with Tony Ulwick – author of the fascinating book “What Customers Want.” I’ve not read many interviews with Ulwick, which is why I’m posting this. He has developed a thorough and unique framework for innovation which brings incredible clarity to an otherwise mis-understood process. In this interview he talks about why innovation can be a repeatable process, and what led Clayton Christensen to heap praise on his methodology.
It’s a multi-part posting as Tony has written full and thought-provoking replies to my questions.
Here’s the first part :
1. How long did it take to develop the idea of outcome-driven innovation?
It took about 15 years to turn outcome-driven innovation theory into a rules-based discipline. We have developed this unique approach to innovation to the point where companies can now uncover and prioritize hidden growth opportunities in any market with near 100% precision.
2. Where did the concept originate?
The initial concept came to me when I was working at IBM on the PCjr. The day after the product was introduced, the Wall Street Journal declared the product a flop. After overcoming the initial disappointment, I thought, “if we knew what criteria people were going to use to judge the value of a product in advance, we could design the product to meet the criteria and ensure its success”. Trying to figure out how customers judge value and how to capture that information from customers in advance became my top priority.
I first discovered how a customer “need” should be defined from the customer’s perspective when engaged in core market growth initiatives and how that definition changes in when working in the area of new market creation. Through the experience of hundreds of customer interviews, I then figured out what the standard structure, content and format of a customer “need” should be. Finally, I went on to create the best methods for capturing these unique inputs into innovation and new quantitative research methods to prioritize them. Most importantly, my team and I have, over the past 7 years or so, discovered how this unique information can be used to more effectively segment markets, position a product, communicate a products value, prioritize the development pipeline, brainstorm new ideas, conduct competitive analysis and perform many other tasks associated with innovation.