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Bring customers into the idea review process

Say you’ve got some internal ideas at your company. Who takes a look at them? Assesses them to determine next steps for each idea? Figures out the value and difference the ideas can make?

How about your own customers?

I talk a lot about jobs-to-be-done here, and getting a firm grip on those to understand where innovation and product enhancement opportunities lie. But sometimes that’s not realistic. Ideas come from many sources, and more likely than not, fail to reflect hard analysis of jobs-to-be-done. But customer feedback is valuable. Any idea which can touch on customers’ experience – products, services, support, pricing, deliver, knowledge – can benefit from their perspectives.

The concept sounds right, yes? But it’s also something that’s somewhat scary. I know this because I asked innovation executives for a number of large companies what they thought of it. There was hesitancy to the concept of bringing customers into what is generally an internal – and often murky at best – process of evaluating ideas.

In my post, What if customers evaluated your company’s ideas?, five areas are examined to de-scarify this idea:

  • Differentiating from focus groups
  • Profile of right customers to involve
  • Type of ideas
  • Ways to engage customers in the evaluation process
  • What criteria make sense?

Give it a read, and see if this is something you’d consider.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

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Enterprise gamification…yes or no? Twitter #innochat Thursday May 22

What do you think about gamification for the enterprise? Smart innovation that helps deliver results? Or horrible idea that treats people as Pavlovian animals? Well, this week’s #innochat will examine that question.

#innochat? What’s that, you ask?

#innochat is a weekly conversation that takes place on Twitter, covering topics related to innovation. It’s open to anyone and is a great chance to add your perspective, learn how others view the topic, engage in a debate, and make connections. The general format:

  • Use the #innochat hashtag in your tweets
  • Follow the moderator, usually Drew Marshall or John Lewis, who will post the questions for the discussion
  • 4 or 5 questions are used to structure the conversation

#innochat runs for one hour every Thursday at the same time:

Innochat clocks

It’s my pleasure to be the guest for this week’s #innochat. For our topic, I’ve chosen: Applying gamification to enhance innovation outcomes. Click that link to read the framing post, and here are the four questions that will structure the discussion.

  1. What is your definition of gamification?
  2. True or false: Gamification is fundamentally about points, badges and leaderboards. Why?
  3. Given a magic wand, how would you use gamification to enhance innovation outcomes?
  4. What are the potential negative outcomes from gamification?

Share what you think about gamification. See you Thursday May 22, 2014.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

 

Positive Deviance vs. Best Practices

Over time, I’ve seen people write disparagingly about the use of best practices in innovation. A recent example of this comes from Paul Martin in Say ‘Best Practice’ again, I dare you. As Paul notes:

For me the term ‘Best Practice’ conjures up images of a race toward uniform mediocrity, led by those who follow the crowd.

I understand his position. It’s a version of fast-following in a way, where people do not take a fresh look at an activity. They just follow what others are doing. You may share his passion for banishing ‘best practices’. Although be careful there. Some things really don’t need innovation if they’re not critical to a company’s differentiation and growth. For instance, if there are best practices for closing the accounting books on a quarterly basis, what issue of mediocrity is there?

The issue with best practices appears to be:

  • It’s done by an organization with which you compete
  • It propagates the status quo rather than break new ground
  • It doesn’t differentiate you, so why would you do just do what everyone else does?

There is a form of “best practices” that doesn’t violate the above. It’s called positive deviance.  Positive deviants are people who deviate from the norm and achieve superior results for an activity. They don’t have access to different resources than others. They just do things differently. A great example comes from Vietnam. The Save the Children organization wanted to address the pervasive malnourishment of children. In conducting field research, they came across families that had very healthy children. What were they doing differently? They fed their children the crabs and shrimp that were around their village. These protein-rich animals were available everywhere, but were disdained as trash, not worthy of consumption. Yet, these same disdainers had children who were malnourished.

Best practices indeed!

The point here is that positive deviance is a form of best practice that is:

  • Emergent
  • Based on experimentation
  • Consistent with internal community norms and context

While best practices may come from consultants and media coverage, positive deviance is more localized. And it’s often hidden. People aren’t openly talking about what they’re doing different. I liken this to William Gibson’s famous observation:

The future is already here. It’s just not evenly distributed.

Why not change that? In my post, Beyond Ideation: Four Fresh Ways to Generate Innovation, I talk about running campaigns for four different types of insight:

  1. Challenge orthodoxy
  2. What’s working (i.e. positive deviance)
  3. Problem-sourcing
  4. Trendscouting

These are different ways to use crowdsourcing beyond the normal ideation use case. Including finding your positive deviants.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

 

Consultant-Led Innovation

Finally, remember Innovation won’t come from plans or people outside your company – it will be found in the people you already have inside who understand your company’s strengths and its vulnerabilities.

Steve Blank, Esade Business School Commencement Speech

I think Steve Blank – well-respected thinker on innovation and entrepreneurship – has hit a key point in his speech. A company’s employees are exactly the right people to enlist in innovation efforts. Here are the qualities that make employees uniquely qualified:

  • Deep knowledge about customers
  • Understanding why customers leave
  • Strong interest in the company’s future
  • Internal informal networks to move things forward
  • Vast reservoir of existing ideas and insight about future possibilities

Organizations are starting to take these amazing attributes seriously as they think about innovation. I’ve seen some forward-thinking organizations involving employees in the process of moving forward. But not all, certainly not a majority yet. For many senior executives, consultants are still the preferred means to think about and design the future.

Consulting’s impact on employees

In my history, I’ve seen how consulting has been used in organizations, as an employee, a consultant and an observer. I sort the types of consulting into three levels of a pyramid:

Consulting stack

 

The bottom level is consulting around specific functions.  Towers Watson, for instance, focuses on HR and financial issues. This consulting is helpful in bringing new information to the employees in these functions. Consultants here see a lot of what works, and what doesn’t. With both their expertise and experience, they make people smarter in the core supporting functions of organizations.

The middle level is more about enablement across different groups. This consulting brings new philosophies and frameworks to employees. It enhances people’s ability to think about addressing the key strategic factors that impact the business. My own work consulting on crowdsourced innovation is one such example. Consulting firm Deloitte offers Lean Six Sigma consulting. This level of the consulting pyramid works in concert with what motivates employees and helps them be better in their jobs.

The top level is best characterized as strategy consulting. These firms (e.g. McKinsey) look at a company, its assets and its markets, and design a future path for the organization. This can include new markets to go after, expanding in existing markets, new products to offer and new business models. This is what I call Consultant-Led Innovation. It is actually really valuable, but can also result in demoralizing employees.

Do outsiders really know better?

I’ll relate my own experience here, see if it resonates with you. When I was at Pay By Touch, the CEO decided to bring in a well-known consulting firm. Their mandate was to examine the payments market and determine how Pay By Touch should tackle it. After doing their research and executive interviews, they came up with a strategy for pricing, and new products for a biometric wallet. I remember attending their presentation to a packed room of employees. The room was packed because it felt like the CEO was going to go with their recommendations, and people wanted to know what the consultants were thinking.

After seeing the presentation, the collective employee reaction? Meh. It suffered from two issues. First, it wasn’t anything that hadn’t been part of the discussion internally. Second, it had some fundamental flaws that people who’d been working on the edge of the evolving payment industry would have known. Unsurprisingly, their recommendations went to the shelf without further action.

But that experience always left me with a bad taste. Why didn’t the CEO call on his own people to do this strategic thinking? He’d hired smart people who knew credit cards, ACH, point-of-sale systems, etc. People who joined the company to change the way we pay. But instead of leveraging that, he brought in the consultants.

Outside consultants aren’t going to know your business – customers, markets, competitors, products – better than your employees.

Diverse perspectives and who is motivated most

I’ve written previously about how valuable cognitive diversity is. And the strategy consultants do add to that cognitive diversity. They have smart people who bring strong analytic perspectives to your business. The problem arises when their perspectives, their voices are the dominant basis of thinking for the C-Suite.

It’s an in-your-face dismissal of your “most valuable asset”, your employees.

Dilbert - employees are our most important asset

Via Dilbert.com

As I’ve described previously, the key to successfully engaging employees and having them help lead the company’s innovation is for senior executives to set a course forward and ensure that innovation obstacles don’t stifle progress. Strategy consultants actually can be useful here, in that they can help an executive crystallize thinking about the future. After that, enlightened organizations know their employees have the smarts, knowledge and motivation to work out the future. And better than some strategy inserted from outside, when employees help determine the organization’s future, their enthusiasm and energy will be critical to achieving the outcomes expected.

Don’t rely on consultant-led innovation. Make sure you’re building through the amazing cognitive diversity and energy of your employees.

I’m @bhc3 on Twitter, and yes, I’m a Senior Consultant with HYPE Innovation.

 

How to determine what rewards matter to employees

In the field of enterprise innovation, rewards programs are a relatively common component. This is a response to the fact that participating in innovation often comes on top of an employee’s existing duties. Organizations want the cognitive diversity, they want novel ways of addressing needs, but they also need to satisfy customers and keep the lights on. Rewards programs are put in place to provide additional value from participating in the innovation efforts (on top of the intrinsic motivation to help solve a challenge).

Rewards programs have a well-earned bad reputation for being de-motivators. Simplistic approaches – cash, gift cards, merchandise – can inadvertently wreck employees’ motivations to participate. When done poorly, they become what Daniel Pink described as de-motivators. Which then opens the question…how to do rewards “right”?

I think what matters is the type of work. Even Pink talks about how his research about motivation relates to what he terms “creative tasks”. I want to pick that up and propose the following matrix as a way to think about what rewards matter to what types of employees:

In this matrix, two attributes are keys to understanding what types of rewards would appeal to employees. Ambition level speaks to how much responsibility the person desires to have. And how much impact on the organization’s outcomes the want wants. Cognitive complexity includes what Pink calls “creative tasks”. Work that is more cognitively complex will have a high level of uncertainty, and require learning, trial-and-error and an iterative flow. To help make these characterizations of work more tangible, I’ve added some example occupations for each square in the matrix.

Together, cognitive complexity and level of ambition determine what rewards would hold appeal. If you like tasks that follow well-known rules, rewards that allow you to gain new knowledge are less interesting. If your objective is a paycheck and a great life outside of work, opportunities to meet with the CEO hold little appeal. If one’s interests run toward ways to increase career options and take on greater responsibilities, a $25 Amazon gift card offers little motivation.

I just wrote more about this in my post, Keys to success with an innovation reward program. There, I’ve described a spectrum of rewards that run from cash/merchandise through innovation program options. I map the matrix to those, and provide specific examples where rewards were done wrongly. Learn from those mistakes.

I’m @bhc3 on Twitter and I’m a Senior Consultant with HYPE Innovation.

Four categories of enterprise gamification

When you think of gamification, what are the common things that come to mind? Points, badges, leaderboards. These items are in the cognitive toolkit. But looking at the sheer variety of game mechanics, you can see that’s it’s a much broader field than that:

Game mechanics list

These 48 different mechanics (via SCVNGR and Badgeville) aren’t the complete list, but they provide a sense for the possibilities. However, the quantity of game mechanics makes its difficult to coherently analyze what, if any, means are relevant for an initiative. I found myself facing that in some work I was preparing for a client. My job-to-be-done? Provide an accessible way to understand the different gamification techniques relevant to crowdsourced innovation.

Having done some gamification work previously as a product manager, I called on that experience and various research on the topic. The following are the categories that made sense to me in the context of the enterprise environment:

Gamification categories

You might notice that I’ve couched the descriptive statement of each in the first person. That fits the approach to gamification, which is about motivations of individuals, what matters to each of us. Here’s a bit more about each.

Achievement: I work to attain an objective. This category calls on the desire many of us for mastery. To be well-versed and proficient in something. There is a sort of competition, but it’s against a standard, a benchmark. Not others.

Recognition: My contribution is acknowledged. Recognition is a form of feedback, an affirmation of one’s capabilities or position and a manifestation of status among peers. Recognition strikes me as the most powerful form of motivation.

Competition:  I compete for a limited number of awards. These gamification techniques appeal to the desire to compete. They can elevate people to moments of excellence in their participation (think of sports you’ve participated in previously). Powerful when used in an appropriate context.  But it’s a category that needs to be treated with care. Clumsy implementation of competition gamification can poison an initiative.

Valuables: I want to secure something of value. Valuables can address avoiding the loss of something or gaining something new. Valuables include the things you might expect: points-based rewards systems. But they can include countdowns to do something (I need to do something before I lose the opportunity), or competition to win funding for an idea, for example. Very useful, but Valuables need to be handled with care to avoid unintended consequences (e.g. high volumes of low value contributions; mindset that participation only happens when there’s a reward).

I’ve applied these different gamification categories to different innovation scenarios in my new post: The gamification framework for business innovation. I also look at the purpose of gamification there, some common misperceptions about it, and five key design principles.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

Gmail offers surprising innovation lessons for the Fortune 500

If you’re familiar with the story of Gmail, you know – for a fact – that it was a 20% time employee project by Paul Buchheit. A little bottom-up experimentation that grew into something big.

Surprise! That story is wrong.

It was a desire by Google, the company, to offer its own email. From Harry McCracken’s great piece How Gmail Happened: The Inside Story of its Launch 10 Years Ago:

Gmail is often given as a shining example of the fruits of Google’s 20 percent time, its legendary policy of allowing engineers to divvy off part of their work hours for personal projects. Paul Buchheit, Gmail’s creator, disabused me of this notion. From the very beginning, “it was an official charge,” he says. “I was supposed to build an email thing.”

Gmail’s creation has more in common with innovation inside large enterprises than it does with the start-up world. Read on if you recognize these:

  1. Job-to-be-done thinking
  2. Reports of the death of company innovation are greatly exaggerated
  3. Corporate antibodies are everywhere
  4. Senior executive support
  5. Big Innovation takes time

Job-to-be-done thinking

Yahoo email screenshot

Image via Variable GHZ, “Why Yahoo Mail is Still an Epic Catastrophe

Anyone remember life before Gmail? We had low storage limits. ‘OK’ search. Poor spam control. Yahoo, one of the dominant players at the time, pursued the freemium strategy that required paying for more storage and better controls. Which isn’t unheard of, mind you.

It’s just…

Think of the core job-to-be-done: When I want to update others, I want to send and receive communications. Some key job tasks that define that job include:

  • Easily send pictures to others
  • Read emails from real people and organizations that I care about
  • Find old emails when I need them
  • Expand my usage of email economically

Yahoo, Hotmail, AOL were fine as far as they went, but they each were challenged on these key job tasks. Back when I had a Yahoo email, I remember the spam being awful and it seemed impossible to control.

Google looked at the offerings in the market, and recognized an opportunity to better satisfy people’s expectations for these important job tasks. Larger size limits, stellar spam control, excellent search and ongoing improvements through Gmail Labs.

Lesson: ABI (Always Be Improving) on the customers’ jobs-to-be-done. Think of the entire job flow and determine which areas are ripe for a better service and experience. Big companies can too easily focus on executing what they have rather than thinking about customers need. 

Reports of the death of company innovation are greatly exaggerated

Image via Family Life Resources

Somewhere along the line, a narrative has emerged that pretty much every big company cannot innovate its way out of a bag. Admittedly, the increasingly rapid turnover of the S&P 500 and the fast rise and decline of companies fuels this narrative. But it’s glib to say companies just don’t do it.

Google’s 20% time is espoused as the antidote to this issue. Middle management stifling innovation? Let everyone experiment on their own. But Gmail wasn’t a 20% time project. It was actually something planned and resourced for development for the organization at large.

This is an important point. If companies set their mind to innovate in an area, people will contribute and provide fantastic ways to get there. Tony Vengrove advised on a key element for success here:  “A compelling vision statement describes what the company wants to become in the future. It not only needs to inspire but ideally it should inform the innovation agenda.”

Lesson: Innovation is not dead inside companies. It does require leadership to set a vision that employees can focus on.  

Corporate antibodies are everywhere

Google is rightly perceived as one of the most innovative companies on the planet. Given that, one might assume that the innovation wheels are well greased there. But I was struck by these quotes from McCracken’s story about the birth of Gmail:

“A lot of people thought it was a very bad idea, from both a product and a strategic standpoint,” says Buchheit of his email project. “The concern was this didn’t have anything to do with web search. Some were also concerned that this would cause other companies such as Microsoft to kill us.”

Within Google, Gmail was also regarded as a huge, improbable deal. It was in the works for nearly three years before it reached consumers; during that time, skeptical Googlers ripped into the concept on multiple grounds, from the technical to the philosophical. It’s not hard to envision an alternate universe in which the effort fell apart along the way, or at least resulted in something a whole lot less interesting.

Inquisitor vs. Corporate AntibodyIn those two quotes, you see critiques that aren’t really about specific elements of Gmail, the concept.

In Four Personality Types that Determine Innovation Success or Failure, a distinction is drawn between Inquisitors, who reflect thoughtfully on issues facing an idea, and Corporate Antibodies, who just want the idea dead. Here are hypothetical responses to Gmail by the two different personality types:

Inquisitor: “Won’t we spook people when they see ads related to the email they’re reading?”

Corporate Antibody: “Email has become a commodity. There are other products we should be building.”

Lesson: Corporate antibodies will always be with us. Recognize legitimate probing for faults versus efforts to undermine the idea in total. Spend time figuring out how to get around Corporate Antibodies, not appeasing them.

Senior Executive Support

Senior executives matter in innovation

In a land of radical transparency and holacracy, the traditional top-level support needed for initiatives is a thing of the past. Alas, we are not in that land. For the 99.9% of people who live with today’s reality, top-down support continues to be the effective way things get done.

It does put pressure on top executives then. They are held accountable by the C-suite, the Board and shareholders. Already in this post, senior executives are called on to ensure innovation moves forward in two different ways.

Set the innovation course: Leadership – be it in business, community, military – has a role in establishing the objectives for people. Indeed, set objectives and get out of the way. In Gmail’s case, Larry Page and Sergey Brin saw a future that extended beyond just search. Paul Buchheit was charged to figure out what a Google email app would look like.

Remove obstacles to innovation: We saw previously that Corporate Antibodies are alive and well. But they didn’t stop Gmail’s progress. From McCracken’s article: “Fortunately, the doubters didn’t include Google’s founders. ‘Larry [Page] and Sergey [Brin] were always supportive,’ Buchheit says. ‘A lot of other people were much less supportive.’ “

Lesson: If senior management isn’t paying attention to innovation, it’s a safe bet no one in the company is either. Employees respond to the agenda set by executives. Organic growth comes from a clear focus that involves executives and employees.

Big Innovation takes time

One of my favorite perspectives on innovation comes from Jeff Bezos. In an interview on Harvard Business Review:

ADI IGNATIUS: Jeff, you’ve said that you like to plant seeds that may take seven years to bear fruit. Doesn’t that mean you’ll lose some battles along the way to companies that have a more conventional two or three-year outlook?

JEFF BEZOS: Well, maybe so, but I think some of the things that we have undertaken I think could not be done in two to three years. And so, basically if we needed to see meaningful financial results in two to three years, some of the most meaningful things we’ve done we would never have even started. Things like Kindle, things like Amazon Web Services, Amazon Prime. The list of such things is long at Amazon.

2014 2019Note that he’s referencing Big Innovation. Concepts that are market changers. There are plenty of opportunities for small-ball innovation (or improvements). But for the really big stuff, executives need to back away from the notion that it can be done in one year.

This was seen with Gmail as well. It was in the works for three years before it was launched to consumers. Continual effort was applied to the product features, the user experience, the business model and the infrastructure to support it. During this time, the project was assailed internally, but as noted previously, senior management supported its ongoing development. Similar to the way Bezos sticks with groundbreaking projects for the long term.

Lesson: Senior management must recognize the magnitude of the innovation it seeks and commit the right time horizon, resources and support to it. This applies for small ball innovation and Big Innovation.

Google, of course is now a HUGE company, on par with the biggest in the world. Its Gmail experience provides valuable lessons for Fortune 500 firms seeking to innovate.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

Is it innovation or just an improvement? Does it matter?

On the LinkedIn Front End of Innovation group, I saw this post:

Interesting (and heated) discussions @ Unleashing Innovation Summit in Amsterdam earlier in the month: Incremental innovation is NOT innovation – it’s just marketing. REAL innovation is breakthrough/transformational… Agree or not?

I’ve seen this debate before. Attempts to finally, once-and-for-all establish just where improvement ends and innovation begins. People end up with a Maginot Line that fails to defend the sanctity of innovation. Quick: Amazon 1-click purchasing…improvement or innovation?

Does it matter that we define innovation? I once collected a bunch of people’s definitions of innovation to celebrate the multiple ways people think about it. That was a nod to the different ways people think about it. It was divergence, not convergence.

But there are times people want a clearer line between innovation and improvement. Let’s see how some smart folks have articulated the difference.

Perspectives on defining innovation

Scott Berkun: Innovation is significant positive change. This is a high bar, and it should be. What does significant mean? I’d start with the invention of the light bulb, constitutional governments, wireless radio and maybe web browsers. Perhaps you could say significant is a 30% or more improvement in something, like the speed of an engine or the power of a battery. If you know the history of your profession you know the big positive changes people made over the last 50 years, giving you perspective on the scale of brilliance you need to have to be worthy of that word. (#)

Alan Lepofsky: Both innovation and improvement are important concepts, but unfortunately the two terms are often used interchangeably. Innovation reimagines an existing process or market, or creates a brand new one. Improvement enhances an existing process or market, but does not create disruption.  (#)

Chris AndrewsI think your point highlights something important: there’s a pretty fine line between business-as-usual product improvements and real innovation, and it’s important not to confuse the two. (#)

Jon Van Volkinburg: I don’t see innovation as something that merely creates value for a customer and/or for the provider. Expanding or adding a service, feature, or function is not innovation, and these things create value. These things are growth, novelty, and invention. They are great, necessary, and can lead to innovation if the environment and timing is right. If you want, I guess you can call it incremental innovation… but I wouldn’t, to me the term “incremental innovation” is an oxymoron. (#)

What if we actually settled this debate once and for all?

Assume for a moment that we, as a society, agree on what constitutes Innovation. Then what? What is the logical flow of events and decisions that follow such a conclusion?

The reality it that doesn’t matter what something is called ex post facto. It only matters what impact it has on the consumers of the improvation.

Innovation or improvement comic

Before seeking improvation:

  • Understand the problem you’re addressing (no easy task itself)
  • Develop a sense of the magnitude of what’s required (shave a few $1,000? develop a $1 billion market?)
  • Be prepared to follow through on the ideas generated at a level commensurate with their scale

Here, it is important to understand how you define what you’re seeking. And it doesn’t matter whether you call it an improvement or an innovation. Afterwards, after the idea has become real? Again, it doesn’t matter what anyone calls it. It’s about how well it addresses the job-to-be-done. Call it what you want.

You like to-may-to,
And I like to-mah-to…

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

 

How deep does crowdsourced problem-solving go?

On the recent post, Why crowdsourcing works, Michael Fruhling of BFS Innovations asked:

A couple of related questions: for most current crowd sourced problem solving endeavors, how “deep” does the problem solving routinely go? And do the results meaningfully change if incentives are introduced?

It was a good, thoughtful question. I answered it in the comments there, and wanted to make the answer into its own blog post, below.


Tim O'Reilly tweet on crowdsourcingThe depth of the problem-solving in a crowdsourcing endeavor is wholly dependent on:

  • The question that is asked
  • The engagement of the question sponsor
  • Who is asked to participate
  • Why people would want to participate

A few points on each of those factors.

Question that is asked

As you can imagine, the question impacts the depth of problem-solving. In-depth question = in-depth problem-solving. The more specific the question, the better the quality of people’s contributions. “Specific” here doesn’t mean asking a tactical, low-level question. Rather, it means clearly delineating what is sought in a way that people can relate to .

Engagement of the question sponsor

Crowdsourcing works best (obviously?) when solving a specific problem that someone has. People will respond to the question with different concepts and questions. The feedback of the question asker (aka “sponsor”) provides the back-n-forth that breaks through initial responses to build a deeper response.

Who is asked to participate

Getting cognitive diversity is the key, as described in the post. But also, you want people who have some connection and interest in the question. Think holistically about that. Upstream, downstream, adjacent fields. Problem-solving depth requires matching a question with people who will give a damn.

Why people would want to participate

The question of “why” is closely related to the preceding question of “who”. If a question’s answer potentially affects a person, there is built-in motivation to participate: steer things in a way that makes sense to you. This works well for internal employee-based crowdsourcing. However, there are certainly questions where the personal impact may be less acute. Other incentives come in to play. Engagement with a sponsor – with attendant acknowledgments, thank you’s, feedback – are great incentives. Opportunities to see an idea through is a powerful stimulant. And prizes have great power. Prizes work best when they establish an opportunity to see an idea one is passionate about become real (e.g. investment funds). Or when the question is not one that directly impacts you. In such a case, they are compensation for putting your brainpower to work problem-solving.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

The Journey of an Idea

I’d bet most of us understand an the initially proposed idea and its ultimate implementation are going to differ. Ideas are cheap, as they say. It’s what happens after the idea is proposed where success or failure is determined. Typically, the “after proposal”  focus is on the execution of the idea. But there’s a phase between the idea proposal and the execution of it. It’s a phase where the idea is molded and sharpened.

An idea essentially goes through a journey prior to its implementation:

The probability of an idea becoming reality is affected by different types of participation. Four different personalities act of the idea during its journey:

  1. Creator
  2. Inquisitor
  3. Helper
  4. Doer

On the HYPE Innovation blog, I’ve written about them in: Four personalities that determine innovation success or failure.

I’m @bhc3 on Twitter.

Will customers adopt your innovation? Hope, fear and jobs-to-be-done

When will a customer decide your innovative product or service is worth adopting? It’s a question that marketers, strategists and others spend plenty of time thinking about. The factors are myriad and diverse. In this post, let’s examine two primary elements that influence both if an innovation will be adopted, and when it would happen:

  1. Decision weights assigned to probabilities
  2. Probability of job-to-be-done improvement

A quick primer on both factors follows. These factors are then mapped to the innovation adoption curve. Finally, they are used to analyze the adoption of smartwatches and DVRS.

Decision weights assigned to probabilities

Let’s start with decision weights, as that’s probably new for many of us. In his excellent book, Thinking, Fast and Slow, Nobel laureate Daniel Kahneman describes research he and a colleague did that examined the way people think about probabilities. Specifically, given different probabilities for a gain, how do people weight those probabilities?

Why?

Classic economics indicates that an outcome has a 25% probability, then 25% is the weight a rational person should assign to that outcome. If you’ve taken economics or statistics, you may recall being taught something along these lines. However, Kahneman and his colleague had anecdotally seen evidence that people didn’t act that way. So they conducted field experiments to determine how people actually incorporated probabilities into their decision making. The table below summarizes their findings:

Decision weights vs probability

The left side of the table shows that people assign greater weight to low probabilities than they should. Kahneman calls this the possibility effect. The mere fact that something could potentially happen has a disproportionate weight in decision-making. Maybe we should call this the “hope multiplier”. It’s strongest at the low end, with the effect eroding as probabilities increase. When the probability of a given outcome increases to 50% and beyond, we see the emergence of the uncertainty effect. In this case, the fact that something might not happen starts to loom larger in our psyche. This is because we are loss averse. We prefer avoiding losses to acquiring gains.

Because of loss aversion, an outcome that has an 80% probability isn’t weighted that way by people. We look at that 20% possibility that something will not happen (essentially a “loss”), and fear of that looms large. We thus discount the 80% probability to a too-low decision weight of 60.1.

Probability of job-to-be-done improvement

A job-to-be-done is something we want to accomplish. It consists of individual tasks and our expectation for each of those tasks. You rate the fulfillment of the expectations to determine how satisfied you are with a given job-to-be-done. This assessment is a cornerstone of the “job-to-be-done improvement” function:

Job-to-be-done improvement function

Dissatisfaction: How far away from customers’ expectations is the incumbent way that they fulfill a job-to-be-done? The further away, the greater the dissatisfaction. This analysis is really dependent on the relative importance of the individual job tasks.  More important tasks have greater influence on the overall level of satisfaction.

Solution improvement: How does the proposed innovation (product, service) address the entirety of the existing job? It will be replacing at least some, if not all, of the incumbent solution. What are the better ways it fulfills the different job tasks?

Cost: How much does the innovation cost? There’s the out-of-pocket expense. But there are other costs as well. Learning costs. Things you cannot do with the new solution that you currently can. The costs will be balanced against the increased satisfaction the new solution delivers.

These three elements are the basis of determining the fit with a given job-to-be-done. Because of their complexities, determining precise measures for each is challenging. But it is reasonable to assert a probability. In this case, the probability that the proposed solution will provide a superior experience to the incumbent solution.

Mapping decision weights across the innovation adoption curve

The decision weights described earlier are an average across a population. There is variance in those. The decision weights for each probability of gain in job-to-be-done will differ by adoption segment, as shown below:

Decision weights across innovation adoption curve

The green and red bars along the bottom of each segment indicate the different weights assigned to the same probabilities for each segment. For Innovators and Early Adopters, any possibility of an improvement in job-to-be-done satisfaction is overweighted significantly. At the right end, Laggards are hard-pressed to assign sufficient decision weights to anything but an absolutely certain probability of increased satisfaction.

Studies have shown that our preferences for risk-aversion and risk-seeking are at least somewhat genetically driven. My own experience also says that there can be variance in when you’re risk averse or not. It depends on the arena and your own experience in it. I believe each of us has a baseline of risk tolerance, and we vary from that baseline depending on circumstances.

Two cases in point: smartwatches and DVRs

The two factors – decision weights and probability of improved job-to-be-done satisfaction – work in tandem to determine how far the reach of a new innovation will go. Generally,

  • If the probability of job-to-be-done improvement is low, you’re playing primarily to the eternal optimists, Innovators and Early Adopters.
  • If the probability of improvement is high, reach will be farther but steps are needed to get later segments aware of the benefits, and to even alter their decision weights.

Let’s look at two innovations in the context of these factors.

Smartwatches

SmartwatchSmartwatches have a cool factor. If you think of a long-term trend of progressively smaller computing devices – mainframes, minicomputers,  desktops, laptops, mobile devices – then the emergence of smartwatches is the logical next wave. Finally, it’s Dick Tracy time.

The challenge for the current generation of smartwatches is distinguishing themselves from the incumbent solution for people, smartphones. Not regular time wristwatches. But smartphones.  How much do smartwatches improve the jobs-to-be-done currently fulfilled by smartphones?

Some key jobs-to-be-done by smartphones today:

  • Email
  • Texting
  • Calls
  • Social apps (Facebook, Twitter, etc.)
  • Navigation
  • Games
  • Many, many more

When you consider current smartphone functionality, what job tasks are under-satisfied? In a Twitter discussion about smartwatches, the most compelling proposition was that the watch makes it easier to see updates as soon as they happen. Eliminate the pain of taking your phone out of your pocket or purse. Better satisfaction of the task of knowing when, who and what for emails, texts, social updates, etc.

But improvement in this task comes at a cost. David Breger wrote that he had to stop wearing his smartwatch. Why? The updates pulled his eyes to his watch. Constantly. To the point where his conversational companions noticed, affecting their interactions. What had been an improvement came with its own cost. There are, of course, those people who bury their faces in their phones wherever they are. The smartwatch is a win for them.

If I were to ballpark the probability that a smartwatch will deliver improvement in its targeted jobs-to-be-done, I’d say it’s 20%. Still, that’s good enough for the Innovators segment. I imagine their decision weights look something like this:

Decision weights - Innovators

The mere possibility of improvement drives these early tryers-of-new-things. It explains who was behind Pebble’s successful Kickstarter campaign. But the low probability of improving the targeted jobs-to-be-done dooms the smartwatch, as currently conceived, to the left side of the adoption curve.

DVRs

DVRDigital video recorders make television viewing easier. Much easier. Back when TiVo was the primary game in town, early adopters passionately described how incredible the DVR was. It was life-changing. I recall hearing the praise back then, and I admit I rolled my eyes at these loons.

Not so these days.

DVRs have become more commonplace. With good reason. They offer a number of features which improve  various aspects of the television viewing job-to-be-done:

  • Pause a live program
  • Rewind to watch something again (your own instant replay for sports)
  • Set it and forget it scheduling
  • Easy playback of recorded shows
  • Easy recording without needing to handle separate media (VCR tape, DVD)

But there are costs. If you’ve got a big investment in VCR tapes or DVDs, you want to play those. It does cost money to purchase a DVR plan. The storage of the DVR has a ceiling. You have to learn how to set up and work with a DVR. It becomes part of the room decor. What happens if the storage drive crashes?

My estimate is that the DVR has an 80% probability of being better than incumbent solutions. Indeed, this has been recognized in the market. A recent survey estimates U.S. household adoption of DVRs at 44%. Basically, knocking on the door of the Late Majority. I imagine their decision weights look like this:

Decision weights - Late Majority

On the probability side of the ledger, they will need to experience DVRs themselves to understand its potential. For the Late Majority, this happens through experiencing an innovation through their Early Majority friends. They become aware of how much an innovation can improve their satisfaction.

On the decision weight, vendors must do the work of addressing the uncertainty that comes with the innovation. This means understanding the forces – allegiance to the incumbent solution, anxiety about the proposed solution – that must be overcome.

Two influential factors

As you consider your product or service innovation, pay attention to these two factors. The first – jobs-to-be-done – is central to getting adoption of any thing. without the proper spade work there, you will be flying blind into the market. The second factor is our human psyche, and how we harbor hope (possibility) and fear (uncertainty). Because people are geared differently, you’ll need to construct strategies (communication channels, messaging, product enhancements) that pull people toward your idea, overcoming their natural risk aversion.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

I’m joining HYPE to help companies get more value from innovation

HYPE Innovation logoIt is my pleasure and honor to announce that today I’ve joined HYPE Innovation as a full-time Senior Consultant. HYPE provides an enterprise innovation management software platform – HYPE Enterprise – used by large companies around the globe. In my consulting role, I’ll be working hands-on with customers across the phases of innovation maturity:

  • Beginning the journey toward a more collaborative innovation approach
  • Expanding usage as they gain experience and see results
  • Developing advanced ecosystems to drive next generation business models and products

This role is a change for me, moving from product to consulting.  But it’s one I embrace and I’m looking forward to. I’ve talked a lot here about the need to understand customers’ jobs-to-be-done. By working side-by-side with organizations, I’m going to have a deep understanding of their jobs-to-be-done for innovation and problem-solving. And even better, an opportunity to help make them successful.

HYPE is headquartered in Bonn, Germany, and I’ll be working from San Francisco. In this post, I want to cover two areas:

  1. State of the innovation management market
  2. What makes HYPE special

State of innovation management market

Enterprise traction

Over the past five years, I’ve worked with a number of customers and thought leaders in the innovation management space. People that are committed to and passionate about this. The first thing to know is that enterprises are actively exploring ways to be better at innovating. Many, IDC Predictions 2014many of the companies you know and buy products and services from. From its roots as online suggestions boxes, innovation management has become a full-fledged corporate discipline. In fact, research firm IDC forecasts that by the end of 2016, 60% of the Fortune 500 will be using social-enabled innovation management solutions. Which, if you follow the innovation diffusion lifecycle, means we’ll start to see the late majority taking it up.

Focused ideation

When I began working in the innovation field, the primary use case for innovation management software was to be an open suggestion box, equipped with social features (visibility, commenting, voting). Anytime someone had an idea, they had a place to post it. Unfortunately, that approach proved limited in engagement and value. Thus, that model has changed significantly the past few years. Organizations are now running campaigns that target narrow, specific topics. They are time-boxed events, which in a broad  sense is a form of game mechanic that spurs greater participation. Campaigns offer these advantages:

  • Ready recipients – campaign sponsors – to engage, elaborate and select ideas
  • Continuously refreshing the program and reason for people to participate
  • Address specific organization needs

Beyond innovation

Innovation – however you define it – continues to be a prominent use case. And with good reason, as CEOs rate it a top priority. There are multiple disciplines that address innovation: crowdsourcing, design thinking, TRIZ, incubators, lean startup, etc. Generally, innovation is considered creating something new which adds value.

But I’m seeing signs that crowdsourcing  is being applied in other ways outside the traditional view of innovation. Here are three examples:

  • Problem-solving: An example of this is cost-saving initiatives. People out on the front lines are seeing opportunities for improvement that are hidden from decision-makers in the headquarters.
  • Positive deviance: In every large organization, there are people who have figured out a different, better way to do something. Crowdsourcing helps find these people, and their novel approaches can be identified and shared.
  • Trend-spotting: With an army of employees out in the field, organizations have a ready way to canvas an area. People can post what they’re seeing, a valuable source of raw insight.

Idea development, evaluation and selection take center stage

When I talk with people not familiar with the innovation management field, I find their understanding often to be, “Oh, so it’s an idea collection app.” That is a necessary feature of course – no ideas, no innovation. But it’s a comical under-representation of what innovation management is. As Professor Tim Kastelle notes:

“Generating ideas is the easiest part. Most organisations already have enough ideas. The challenge for them is not generating more but implementing their existing ideas more effectively.”

As the market matures, companies are seeking ways to better advance the most promising ideas. This is where the puck’s heading.

Innovation becomes part of the purposeful collaboration canon

In the broader enterprise 2.0 social business market, the integration of ‘social’ into core business functions has emerged as the basis of value. This is a change from the movement’s early roots. Constellation Research VP Alan Lepofsky nicely illustrates this evolution to Generation 3 as follows:

Alan Lepofsky socbiz generations

Innovation is a prominent use case that benefits from the application of social and collaboration. You can see more in Alan’s Slideshare presentation on innovation and purposeful collaboration.

What makes HYPE special

From my experience in the industry and in my meetings with the team, three things about HYPE stand out in the innovation management field

  1. Singular focus on customers’ innovation jobs-to-be-done
  2. Market leadership
  3. Demonstrated customer excellence

Singular focus on customers’ innovation jobs-to-be-done

HYPE has over a decade of experience in the innovation market. It’s roots were in the R&D world, with a deep emphasis on how to maximize the value of ideas. In industry parlance, this is sometimes called the “back-end” of innovation. It’s a sophisticated activity with variance in process for each organization. Through the years of working with customers, HYPE has become adept at handling this phase of innovation. I know it’s not easy – I did some initial product work myself in this realm previously. Success here hinges on understanding what customers seek to achieve, and acting on it.

With the rise of social business and increased interest in better utilizing the collective smarts of employees, HYPE moved forward to the “front-end” of innovation. Powerful features include campaign development, participation management, idea surfacing, collaboration and evaluation. With this investment of time and effort, HYPE offers the most functional full-cycle innovation process in the industry:

HYPE - full lifecycle innovation process

With deep expertise built throughout the platform, HYPE is well-positioned to address organizations’ innovation jobs-to-be-done.

Market leadership

Forrester Wave - Innovation Management 3Q13 - rotatedIn the past few years, HYPE has increased its presence in the market, following an investment from ViewPoint Capital Partners. From its roots in Germany, the company has become the leader in Europe. It is now seeing good growth in broader EMEA, the United States and South America.

Recently, Forrester published its Wave for Innovation Management Tools. Analyst Chip Gliedman reviewed 14 of the most significant vendors in the space.  The analysis included:

  • Innovation lifecycle: the components of a complete cycle
  • CIO concerns: governance, security, architecture, integration
  • Product roadmap
  • Management team
  • Vision

HYPE achieved the top overall ranking, the coveted “top right” position of the Wave.

Demonstrated customer excellence

HYPE Customers

HYPE has over 170 customers from around the world. Consistent with my experience, the industries are varied. Some representative names are shown to the left. This is something one sees when it comes to innovation: everyone does it. There’s really not a specific sector that pursues innovation and problem-solving more than others.

HYPE has a number of long-term relationships. And it’s fair to say that once you’re a client of HYPE, you’ll be happy, satisfied and get results. Annual churn is less than 4%. On a monthly basis, that’s roughly 0.3%, at the magic level for enterprise software companies.

That level of customer satisfaction doesn’t “just happen”. Rather, it comes from being dedicated to customers’ success and working to make them successful at their jobs-to-be-done.

That HYPE logo?

Finally, about the HYPE logo. I actually do not yet know the background on it. But take a look at it. See some similarities to different hand gestures?

HYPE logo meaning

I’m looking forward to joining the team.

I’m @bhc3 on Twitter.

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