It’s the Jobs-to-Be-Done, Stupid!

February 16, 2012 21 Comments

I do product management for Spigit. I’ve done product management for other companies as well. And let me tell you, the easiest thing in the world is to fall into the trap of focusing on how customers are using your product. Product forms your relationship with customers. It’s how you know them. They will tell you about your product, and the features they want improved. You can’t not listen to that. Of course, you’re going to improve your product.

But don’t confuse that with understanding what your customers need.

Just because you’re on top of what you’re customers need from your current product, doesn’t mean you’re on top of market changes. Two titans of the television industry remind us of that. They have, in recent weeks, been dismissive of a rumored Apple HDTV:

Sharp isn’t paying much heed to rumors that Apple is developing an HDTV. Nor does it have much reason to, says Kozo Takahashi, head of the company’s operations in North and South America.

All Things D

“TVs are ultimately about picture quality. Ultimately. How smart they are…great, but let’s face it that’s a secondary consideration.” – Samsung AV product manager

TechCrunch

And there you have it. Apple HDTV? Whatever.

Of course, one might be reminded of the comment by Palm’s CEO before the Apple iPhone was introduced: “PC guys are not going to just figure [phones] out. They’re not going to just walk in.” Ouch!

What we’re seeing is incumbents falling back on the thing that got them to their position: features. This is feature-led innovation. It’s got its place in the market, but relying only on it puts companies at risk for missing either (i) critical market shifts; or (ii) emerging needs that will drive organic growth.

Divergence between Product Features and Jobs-to-Be-Done

In the graphic below, a typical scenario for feature-led innovation is depicted. What happens is that over time, companies lose touch with where the market moves, with customers’ changing jobs-to-be-done.

When a company “makes it” in the market, it has the features that meet what customers are trying to get done. On the graph above, that’s set as “Time 0”, where features match Job 1. Given this is the ticket to success, a company will of course continue to develop these features. And the people who were looking for Job 1 fulfilled will follow along as the new features are rolled out.

Somewhere along the line, a new job-to-be-done emerges. Call it Job 2. New jobs enter the market all the time, via what Re-Wired Group’s Bob Moesta calls the “push” force. After Job 2, Job 3 emerges. And on and on.

But many companies are never aware of this. There are too many customers. Product is selling. You know your company’s product, and you’ve gotten lots of feedback for improvements. Systems are in place to reward and nudge you further along the path that fulfills Job 1. When they do solicit feedback from customers, it’s all Net Promoter Scores, focus groups for new features, surveys, customer service ticket analysis. Believe me, I really can appreciate how companies get lulled into this cycle of feature-led innovation. Professor Freek Vermeulen of the London Business School calls this the innovation “success trap”.

Meanwhile, customers cast about for ways of fulfilling their new jobs-to-be-done. They improvise. They settle. They experiment. They’re open to new entrants that meet their emerging jobs. And this is how it happens to companies.

Let’s look back at what the Samsung product manager said: “TVs are ultimately about picture quality. Ultimately. How smart they are…great, but let’s face it that’s a secondary consideration.”

Here are three jobs I’d personally like fulfilled that aren’t about picture quality:

Situation Job to Be Done Success Metric
When I turn on my TV I want a set of recommendations
based on my viewing habits		 Increased awareness of
shows that interest me
When I want to share a moment I want a link to post to
Facebook or Twitter		 Decrease steps it takes to
share on social networks
When I’m watching a sports
event		 I want to order food for delivery Decrease time it takes to find
food and place order

The first two of those jobs have emerged based on new technologies in other arenas (recommendation engines, social networks). The third is a tried-and-true job that’s been around forever. Might there be a play to improve that via my TV?

All three of those jobs-to-be-done are divergent from the ongoing focus on picture quality espoused by the incumbent TV leaders.

Parable of Digital Cameras

The feature race of the HDTV manufacturers has a parallel in the digital camera industry. A key feature of digital cameras has been the megapixels. The higher the megapixels, the better the image quality. It has been escalating so much in recent years, Consumer Reports ran a piece wondering when the megapixel arms race would cease.

But in another case of new jobs emerging, lower end digital cameras are seeing their sales decline. Why? As the L.A. times noted in December 2011:

According to a survey by NPD Group, 27% of photos and videos taken this year were shot with smartphones — up from 17% last year.

Wait a minute. Are you telling me that with all that megapixel firepower, we’re gravitating toward phone cameras? What’s wrong with people these days?

Nothing actually. There’s always been the job-to-be-done of capturing moments. It’s just that lugging around a separate camera everywhere you go is a pain. But people want to be connected – talk, messaging, email, surfing – and will gladly carry their phone with them. Which is quite sufficient to fulfill the job of capturing moments. Megapixels be damned. Of course, the megapixels are getting better on smart phones too. Clayton Christensen must be amused by the ongoing disruptive innovation.

Sharp, Samsung…heck, all companies…are you listening? How well do you know the emerging jobs-to-be-done by your customers?

Filed under mba Tagged with , , , , ,

On the Utility of Thinking in Terms of Jobs-to-Be-Done

January 31, 2012 4 Comments

Cottonball clouds In a recent post examining the future of retail, I used the jobs-to-be-done approach to break down the industry. And I’ve been using it more in other ways. It’s quite useful as a basis for innovation.

The premise of the jobs-to-be-done approach is that it provides a much better basis for innovation. The focus is on unmet needs of customers. Compare this to asking wide open, pie-in-the-sky types of questions.

I thought about this when I saw this question posted on Quora:

What currently nonexistent websites would you want to be created?

Wow. Talk about an open ended question. I don’t know about you, but that question doesn’t help me. I get brain freeze. I need a prompt to come up with something. Wide open questions like that are somewhat divorced from what people actually need. And will generate a lot of ideas off the mark, or none because it’s too divorced from what people are thinking about (although one guy has an idea there).

Now I’ll describe a different situation. For Spigit, I often find myself needing to come up with a new idea to show off the system functionality. If I used that question from Quora, I’d find myself straining to generate ideas that pass the smell test.

So instead, I’ve been using the jobs-to-be-done framework. I think of my own jobs-to-be-done. Here’s one I actually used to come up with an idea for a client demo:

When I’m traveling with my family on vacation, I want to keep the kids entertained happily the entire trip.

From this job-to-be-done, I came up with an idea for a long haul family SUV (or could be a minivan). It’d have storage for games, and a flat surface for playing them. A refrigeration unit on board to keep beverages and food fresh. Multimedia for videos, music and games. It would take some design genius to develop. But it’s a vehicle I’d actually take a good look at.

And that’s the point. The jobs-to-be-done approach is incredibly useful for generating ideas that are relevant and actually have potential. You’re plumbing the depths of what people really feel and what they actually want to accomplish. A powerful head start on innovating.

OK, let’s take this one out with a little Holiday Road.

Filed under mba Tagged with ,

5 Social Business Truths

January 20, 2012 1 Comment

Meritocracy trumps hierarchy: Companies don’t get a “pass” on Wall Street or the London Exchange becauswe they’re been around way before new companies. Political candidates aren’t immune from beingf being upended when they don’t perform. Why should work be any different? Companies that focus on the meritocracy are focused on growth. Those that pay too much attention to hierarchy are limiting their growth.

Knowledge and ideas want to be free: When you learn something new, ever feel the urge to share it? When you know something that can help, don’t you want to answer a question? When you have an idea, isn’t it great to bounce off others? From a behavioral and technological perspective, we want knowledge and ideas to be free. Why lock ‘em down?

Cognitive surplus must be a competitive advantage: Cognitive surplus – knowledge, perspectives, heuristics – is perhaps one of the most wasted assets organizations have. Each person’s surplus can be applied to a much greater range of problems and opportunities than what defines the daily tasks of her day. It’s a shame if employees go home every day without going beyond their job titles at the office.

Social and interest graphs generate positive returns: Activity streams, notifications, public interest spaces, recommendations – these new tools are exposing people to a greater range of relevant information than ever before. We’re not limited to our immediate cubicle neighbors. We are part of larger social and interest graphs. This increases the diversity of inputs, which increases our own, and organizational, odds of finding optimal solutions.

Transparency raises organizational IQ: When the left hand knows what the right hand is doing, we operate more effectively. Knowing the different initiatives, information and problems affecting other parts of the organization makes us better prepared in our own work. Operating in a vacuum sucks, because you get knocked over hard by things you don’t know. Transparency of information and conversations makes everyone smarter in their own work.

Filed under mba Tagged with ,

Carving Up the Retail Industry by Customer Jobs to Be Done

January 11, 2012 11 Comments

Online retailers had a heck of 2011 holiday season, up 15%. Whew, in a tough economy no less. But the news wasn’t as good for some physical retail stores. Sears Holdings announced disappointing sales and will be closing over 100 stores. Best Buy same store sales dropped, and some have expressed their sentiment that the retailer is on a long downward slide.

Digital disruption. Coming to a store near you.

That online and mobile commerce is increasing its share of business really isn’t a surprise. The  Internet, as promised in the 1990s, is turning over many industries.

Retail being another such industry, although it’s a much slower process of disruption. Which means the physical retailers have time.

Time to take their natural advantages and build on them.

Determining Physical Retailers’ Competitive Advantage

Given the retail industry’s importance to the global economy and its periodic restructuring, it should come as no surprise that there’s plenty of advice for the industry. Three of the larger, well-known consultancies weigh in.

Booz and Co.’s Karla Martin sees a need for retailers to reduce selections and assortments. Bain’s Darrell Rigby sees omnichannel engagement with customers as the path for physical retailers to re-assert themselves.

In both Booz’s and Bain’s advice, there are elements of incorporating the jobs for which a customer hires a retailer. In the Booz piece, it’s a curation job: “Help me navigate an increasingly overloaded product landscape!” In the Bain piece, it’s a…well, not entirely sure what job is being satisfied. It appears to combine several customer jobs to be done. It is also a good thought piece about future industry infrastructure requirements.

These advice pieces raise the question of how to drill deeper into customer needs. Go beyond the meta trends and get specific around customers. Consulting firm McKinsey offers this thought:

“One way that manufacturers and retailers can investigate these trends is through consumer surveys designed to identify ‘purchase drivers’ – meaning those factors that are decisive in the decision to buy a product or shop at a certain retailer. This survey should not only cover conventional topics like price, quality, and service but also such factors as corporate responsibility and traceability of product origin.”

Survey fatigue notwithstanding, McKinsey starts down the right path. Get the customers’ input. McKinsey talks in terms of purchase drivers. An example of such an influence is convenience, deemed to include shopping ease and practicality.

But does that go deep enough? The risk here is that only surface-level influences are elicited, while the real drivers are buried deeper. A case of “what they say” vs. “what they do”.

A good alternative to get deeper into customers’ minds? The jobs-to-be-done approach.

Components of a Job-to-Be-Done

To create a jobs-to-be-done structure, I’ve followed the work of Strategyn’s Tony Ulwick and Lance Bettencourt, and Re-Wired Group’s Bob Moesta. They’re practitioners who have been working with organizations for years.

Ulwick and Betterncourt have defined the structure of a desired outcome statement (pdf link):

  • Direction of improvement
  • Unit of measure
  • Object of control
  • Contextual clarifier

As example, he gives:

Minimize…the time it takes…to verify the accuracy of a desired outcome…with a customer…e.g. its meaning, completeness, exactness, etc.

Bob Moesta has identified four influences on how a customer decides what product will satisfy a job to be done.

Push (F1): The situation which is driving a person to seek a solution. What is it we’re dealing with? What’s the impetus?

Pull (F2): The promise of a new solution that can satisfy the need. As customer’s consider a new solution, how well does it map to their needs?

Allegiance (F3): The familiarity of an existing solution is a risk mitigator, leverages already learned usage and known benefits.

Anxiety (F4): The unknown characteristics of the new solution, and the potential missteps that await. Would if the new solution isn’t all it’s advertised to be?

I like both forms of analysis, they are quite complementary. So I combined Ulwick, Bettencourt and Moesta’s work to use as an analytical tool.

Retail’s Jobs to Be Done

There are many jobs that retail must fulfill for customers. Below, I’ve picked four of them for analysis. Four that are ones you’d probably see as well. Each job has a defined outcome statement, and a listing of drivers which influence the retailer selected for the job. These aren’t actual customer insights I’ve surveyed, they’re from me. But they address the right type of analysis needed.

The analysis is done from the perspective of switching from a physical retailer to an online one. This is the disruption which is occurring. This perspective was chosen to illuminate possible innovations for physical retailers, or to point out the long term trend they will need to accept.
Retail Jobs - Desired Outcomes

Retail Job: Low Price

Getting the lowest price. Isn’t that what everyone wants? It’s been a human goal since we were bartering woolly mammoth skins for stone weapons.

Frankly, this job is one that will be challenging for physical retailers to fulfill. As has been noted, Amazon – and other online retailers – don’t have the overhead of physical stores. They can and do price lower. And you can see the differences, right there, on your screen.

The anxieties that consumers feel about online retailers providing this job – retailer performance, shipping delays – are there, but don’t rise to the level of overturning the pull of the online retailers. Too many online retailers have proven themselves over the years. They’ve overcome these anxieties.

Physical retailers competing to fulfill this job need scale to overcome their higher infrastructure costs: physical plant, distribution systems, inventory, in-store personnel. Kmart, for instance, is losing the scale war to Walmart, and the online retailers are generally able to outprice it.

Verdict: Long term, this job will be fulfilled by mega-stores and online retailers. But only in categories where it makes sense. Groceries, for instance, are tougher for online fulfillment of the Low Price job, due to the delivery costs of home delivery.

Retail Job: Immediacy

There’s times when you just have to have something today. Even now. Something needed for a home project. Last minute gift. Car maintenance. The list goes on and on. The Immediacy job occurs when the unforeseen happens, or the unplanned realize they need something.

So what’s the pull of online here? Well, you can see the item from your comfortable home. See, it’s right there on my screen! And even better, I can buy it right now! Hmm…not quite the same as actually having it in hand, is it?

Actually, the online retailers are working to provide the “holy grail” of e-commerce, same day delivery. There are different strategies here, although working with physical retailers is a core part of several initiatives. But the costs appear prohibitive: one start-up, Postmates, charges $10 to make short deliveries inside cities.

Verdict: The physical retailers have a distinct advantage here. That expensive distribution system that hurts them with the Low Price job? It’s a distinct advantage here. Physical retailers should play the immediacy game full tilt. Develop an app that tells customers whether something is available, and make it easy to pay for the item. Create a drive-through pick-up experience.

Retail Job: Selection

What did Henry Ford say? You can choose any color you want, as long it’s black. That may have been the case earlier in the industrial age, but not so anymore.

As a general observation, people desire with the ability to select from distinct offerings when making a purchase. For instance, when buying a shirt, isn’t good to see a variety of colors, patterns, cuts, etc.? You’re looking for something that fits your style. If you’ve got a home repair, don’t you want the right tool for the job? Purchasing for your kids, and it’s great to see smaller sizes of an item.

Online retailers can fulfill the Selection job nicely with their ability to provide a long tail inventory. If one retailer doesn’t have what you want, the next retailer is a click away, thanks to Google search and dedicated shopping engines. Online sites can also “own” a category with a larger selection by accessing buyers globally, not just in the local market.

Physical retailers have competed to fulfill this job by offering a wide selection of categories (mass merchandisers) or by going deep in a single category (electronics, books, pet supplies, etc.). One advantage the physical retailers have is the ability to hold and touch items, useful when considering a large number of options.

Verdict: Physical retailers will eventually cede most of the Selection job to online, due to online’s distinct advantages.

Retail Job: Help

With so many options available to us, a distinct #firstworldproblem, it can be daunting to navigate the product landscape. You’ve got a personal style, but could use some help in finding items to match it. There are multiple philosophies for raisi9ng baby, what items fit the one you’re following?

Shoppers want information to help them in their purchases. Beyond information, they want advice. Because a low price on something that misses the mark is just throwing money away. The Help job relates to what a products are being purchased for, not for how complex the product is.

Online commerce offers shoppers great amounts of information. With a click, detailed product information – the kind not available in-store – can be found. Ratings by other shoppers are aggregated, helping distinguish between good and bad products. Online retailers who can specialize in a more narrow category can offer expert advice.

But…and it’s a big but…it’s hard to replicate the give-n-take, the weighing of trade-offs with a live person in front of you. That’s the advantage physical retailers have. There are just times when you really want to talk to someone.

Verdict: This is the physical retailers’ job to lose. With local presence and real live people, they’re positioned to do well here.  The best opportunities lie in cases where the outcome of the product has a fairly high degree of emotional or monetary value for the customer.

Which Customer Job to Fulfill?

For physical retailers, the customer job to fulfill should be a natural extension of their strengths. A company’s assets lead naturally to addressing a particular job the customer wants fulfilled. You really can look at industry structure based on the jobs to be done. And see that some long term trends suggest where retail is heading.

Keep in mind that a larger set of real customers could well describe the jobs they’re seeking fulfilled. My four above are drawn from own experience. But it’s getting input from multiple customers where this methodology comes alive. I’m sure there are some additional jobs that aren’t being fulfilled very well right now, which are opportunities for the future.

Filed under mba Tagged with , , , ,

Four Innovation Insights Customers Provide

December 14, 2011 15 Comments

Customers, properly, have been having a renaissance of sorts in terms of business thinking. Peter Drucker famously espoused a very customer-centric business philosophy. Nowadays, social CRM represents the return of a customer-first orientation. Last year, Altimeter published the 18 use cases of social CRM. Included in those use cases were several that relate to innovation.

Customers are a rich source of innovation insight, and the ultimate authority on what innovation is useful. So it’d be good to understand what types of insights they provide. OK, not just good. Vital. While the incorporation of customers in the innovation process is…honestly….still nascent, it will ultimately be the primary basis of innovation insight. It just will take some time.

It turns out, there is a structure to customer insight. Customers’ innovation insight takes several different forms:

Spectrum of Customer Insight 1
Based on research, the four types of insight are different, and vary in the ease of eliciting and what they address. Let’s take a look.


All Customers – Jobs to Be Done

“Jobs to Be Done”. What is that? It’s why someone purchases a product. A classic formulation of this is by Theodore Levitt: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” That starts to hit on the notion of the job. But it’s more than the direct outcome one is looking for from a product. As the diagram to the right shows, it also includes the consumption context and the emotional effect. Context paints the broader picture of the job to be done. Emotional effect broadens the discussion to include the experience of using the product.

Clayton Christensen provides a wonderful example of this, talking about the job that customers were hiring…a milkshake…for. Yes, a milkshake. There was a lot more behind that purchase than its direct usage as a cold, sweet drink. 40% of shakes were being bought in the early morning. The consumption context was people commuting in the morning, drinking a shake in lieu of breakfast. The shake’s emotional effect was stave off boredom and satisfy a general hunger at the start of the day.

Of all the innovation insights available, the jobs-to-be-done is the most plentiful. The challenge with this feedback is that it’s buried inside people’s heads, and it must be elicited from them. Practitioners such as ReWired Group and Strategyn get at the jobs to be done through deep dive interviews with customers.

Emergent Customers

Say you had a product concept, and you wanted to get a read on its applicability to people’s jobs-to-be-done. More broadly, you’d love to know what works, what doesn’t and what else is needed to make a splash in the general market. Will any old customers do? Turns out…no. What you’re looking for are emergent customers.

In research done by professors at UC-Riverside and Dartmouth Tuck School of Business (pdf link), customers exhibiting a specific set of characteristics were much better at identifying and improving concepts that are more attractive to the market. Called emergent customers, these people possess “the unique capability to imagine or envision how concepts might be further developed so that they will be successful in the mainstream marketplace.”

Sounds pretty valuable, no?

What are these traits that define a customer’s emergent nature?

The researchers created two separate field tests of example products – home delivery and oral care – to validate their hypotheses about emergent customers vs. other types. Their tests confirmed the ability of these customers to better refine a concept for mainstream acceptance than other types of customers.

Lead Users

Lead users are those customers who alter a company’s product to fit an emerging job they need fulfilled. MIT professor and economist Eric von Hippel popularized the existence of these users in his book Democratizing Innovation. Why are they so important? Because they experience new needs for products before the general market does. Find these users, and you gain an early read on what will be important more broadly in the months and years ahead.

Lead users not only experience these emerging market trends earlier, they are motivated to take action on them. The needs they experience and the product adaptations they make are quite valuable.

In one example cited by von Hippel, lead user surgeons were identified. These surgeons had modified equipment and materials to suit the needs they had, when the standard products sold wouldn’t suffice. Nearly half of these innovations were eventually marketed by the big manufacturing firms. In another example, 3M ran a test of concepts developed by its lead users vs. ideas derived from other methods. Thew lead users’ ideas were “significantly more novel than those generated by non-lead user methods. They were also found to address more original or newer customer needs, to have significantly higher market share, to have greater potential to develop into an entire product line, and to be more strategically important.”

Find these users, and learn where your market’s going.

Creative Customers

Creative customers are the uninvited dinner guests in the path toward mainstream innovation. While the jobs to be done, emergent customers and lead users provide incredibly valuable insight to make stronger, more successful innovations, creative customers…um…don’t really? The phenomenon of creative customers was researched by academics Pierre R. Berthon, Leyland F. Pitt, Ian McCarthy and Steven M. Kates in their paper, When customers get clever: Managerial approaches to dealing with creative consumers.

The researchers define creative customers simply as “customers who adapt, modify or transform a proprietary offering”. That actually sounds a lot like the customer type just described, lead users. But the researchers differentiate here by whether the innovations reflect emerging needs of the general market, and by whether creative customers are satisfying a core need or not. I’d add that creative customers are those whose innovations are pretty far afield from the mainstream path of expected product usage. And it’s not clear how companies should handle them:

Creative customers are different

Examples of creative customer innovations include the guy who used FedEx boxes to create furniture. Admittedly, not what those boxes were made for. Or the car fueled by Mentos candy and Diet Coke. They’re creative, but certainly not of the lead user class of innovations. Yet, each in their own way, point to impressions people have about the products (the incredible stiffness of FedEx boxes makes them a furniture material, the fizz of Diet Coke and Mentos is a fuel source).

Companies gain diverse thinking about their products, but such innovations do pose challenges around intellectual property, branding and liability. The researchers categorize the possible firm responses to such innovations in a 2×2 grid (shown above), based on attitudes and actions toward creative customers. But here’s the thing: creative customers aren’t going away, and their legions will increase over time. They make interesting dinner companions at the innovation banquet.

The four innovation insights described here form a broad and powerful set on inputs from customers. While the broad involvement of customers in innovation is still limited and nascent, these different types of insight provide a path for future activity by firms.

Filed under mba Tagged with , ,

Using Open Innovation to Be Competitively Unpredictable

November 22, 2010 3 Comments

During a Twitter Q&A organized by open innovation thought leader Stefan Lindegaard, Psion Teklogix CEO John Conoley posted this:

How interesting is that? Using open innovation to be “competitively unpredictable”. I love that concept. Let’s understand where John is coming from.

First, have you heard of Psion Teklogix? They make “rugged mobile computers”. Think Blackberry or iPhone, but industrial strength with specialized purposes, hardware, and made to withstand punishment. From an enterprise perspective, the chart below by VDC Research provides some perspective on mobile computing for work. I’ve outlined in red the section where Psion operates:

Psion’s computers are used in a variety of industries for inventory tracking, couriers, field service and other demanding jobs. The company is #3 in its industry (Motorola occupies the top spot). A key part of Psion’s strategy is to make its rugged mobile computers modular and customizable. This customization allows them to be adapted to different uses. Building on this modular and customization philosophy, the company has developed an ecosystem of third party vendors who make components that plug in with Psion’s products.

I had a chance to talk with Todd Boone, Director of Market Development for Psion. He described the company’s open innovation efforts.

Pace of Change in Mobile Has Accelerated

Before talking about open innovation, first understand this. Todd Boone noted that the pace of change of mobile computing has accelerated in the past several years. Anyone tracking the space probably gets that intuitively. This means is that the uses of mobile, the emergence of new competitors and the changes in technology change more frequently. As an example, on the consumer side, how long have Apple and Android been so influential in the mobile sector?

Indeed, VDC Research noted the changing dynamics of the rugged mobile computing market in a recent article:

Another critical challenge facing rugged handheld vendors is the increasing level of competition from smartphones and other emerging devices – especially for field mobility applications. While smartphones do not have the same level of integrated I/O capabilities nor the level of ruggedness offered by rugged handheld devices, their proliferation in the enterprise (and lower adoption cost) are making them target devices to support more sophisticated enterprise applications. Plus, in the field mobility market the rugged handheld community is most challenged from an OS perspective. Although there is a strong application and developer community supporting field mobility applications on Windows Mobile devices, customer expectations in terms of user interface and experience – especially for field mobility applications – is increasingly influenced by consumer oriented smartphones.

For companies operating in the mobile space, such dynamics make it harder to “know” everything, and to have the resources to respond accordingly. Nimbleness and flexibility are needed to address the unpredictable course the mobile sector takes.

As Todd Boone explained to me, Psion needed a strategy that leveraged their modular platform strategy while recognizing they can’t realistically know all the emerging use cases and technologies out there.

Answer? Open innovation.

Ingenuity Working

On March 4, 2010, Psion launched Ingenuity Working (IW), a site built to expand its open innovation activities. Psion CEO John Conoley described its mission this way:

The open, online community in Ingenuity Working brings us closer to our customers and their thoughts and will allow us to socialise and commercialise innovation. We are using social media to bring our developers and resellers together with our customers, all over the world. Essentially, everyone will be putting their heads together to help create technology that best fits a company’s individual requirements – that has to be a good thing.

In talking with Todd, I learned that the initial thrust of the IW community is focused on partner vendors, rather than direct feedback from end-user customers. In some ways, this is similar to P&G’s open innovation approach.

Engagement with external parties occurs via discussion forums, blogs and a “secure zone” for each partner. In these arenas, there is a two-way exchange of product ideas and use cases. An example can be seen in the section of IW devoted to discussions for developers of Windows/CE/WM/Embedded.

Now that’s some esoteric stuff there. But here’s the thing. It’s groundbreaking in the rugged mobile computing industry to have this all ‘hanging out there’. It becomes free research for competitors too, in a way. Which one may view as a risk of this whole endeavor,

Here’s how Todd describes the Psion open innovation vision:

Rather, we think it’s the opportunity to drive the market to a new reality. A market that drives itself in a way that is inherently beneficial to customers and partners alike based on the real-time, open dialogue that starts prior to any development activities taking place and continues through to product maturity. Real success will come, I think, when marketing and engineering no longer make product decisions but rather our community of customers, partners and developers does.

Psion is early in its open innovation initiative, and plans to improve and evolve its program. The company is engaging partners on hardware, software, standards and a wide variety of use cases. These efforts complement its existing offline channels and research.

Becoming Competitively Unpredictable

Finally, that great quote from Psion’s CEO about embracing open innovation to be competitively unpredictable. I asked Todd for a bit more context. What exactly does that mean?

He noted that typically, large companies describe their roadmap for the next several quarters or years in terms of product development. The challenge with that approach is that it’s company-centric, and its effectiveness is limited by the increasing rate of change in the industry.

The other dynamic is Psion’s orientation toward creating an open platform that can be configured for different uses. This platform philosophy is a core strategy.

So by engaging with external parties, Psion is looking to (i) stay on top of emerging market changes; and (ii) leverage this large collective intelligence to develop applications and hardware for its configurable platform.

Ideas which would be hard to forecast out over the next 6, 12 or 24 months. If you’re a competitor, this makes it harder to know what Psion will do.

In other words, they become competitively unpredictable.

Filed under mba Tagged with , ,

How Much of a Relationship Do Your Customers Actually Want?

August 3, 2010 9 Comments

On the Harvard Business Review, Matt Dixon and Lara Ponomareff wrote a piece that caught my eye, Why Your Customers Don’t Want to Talk to You. Consumers increasingly prefer self-service, and the authors speculate:

Maybe customers are shifting toward self service because they don’t want a relationship with companies. While this secular trend could be explained away as just a change in consumers’ channel preferences, skeptics might argue that customers never wanted the kind of relationship that companies have always hoped for, and that self service now allows customers the “out” they’ve been looking for all along.

For managers hell-bent on deepening relationships with their customers, that’s a sobering thought.

That last line is particularly relevant to the new thinking: that companies need to engage their customers in “conversations”, which social media is enabling. A related question to ask is, do they really want a “relationship” at all with companies?

What exactly is a “relationship”?

Let’s start with an important point: what exactly is a “relationship”? Put simply, it’s a two-way connection I have with you based on some form of interaction(s). In that sense, buying a product from a company qualifies as a “relationship”. But that’s insufficient. We want to know how deep is the relationship?

The thinking of Mark Granovetter is relevant, provided helpfully by Lithium’s Michael Wu. Four elements determine the depth of a relationship:

  1. Time spend together
  2. Emotional intensity
  3. Intimacy (mutual confiding)
  4. Reciprocity

Now, apply those elements of relationship to the way you think about companies from which you buy. What’s the emotional intensity you have with the power company? Do you find yourself confiding with Amazon.com when you purchase something? How much time are you and your bank spending together?

Those questions point to a more commonly understood definition for relationship: high scores on the four Granovetter dimensions. But scoring high on those dimensions is an insurmountable hurdle for most companies vis-à-vis their customers.

The job your product is hired to do

This idea that companies need to think in terms of the “job their product has been hired to do” is one I learned from Clayton Christensen, Harvard professor and author of The Innovator’s Dilemma. It’s understanding why the customer buys your product, and what needs it fulfills. “Needs” often being different than thinking in terms of the features a product has.

This is what defines the relationship customers want to have with a company.

Leading social CRM thinker Wim Rampen argues this in his post Social CRM – What Relationships Should You Care For, And Why? In the post, he states this:

From a company’s perspective, a relationship with your Customers is not what you need most. You need most to understand what job it is your Customers are trying to get done.

Wim is spot on. That’s the innovation mantra. Nicely applied to social CRM.

The depth of a customer’s relationship depends on the job you’re hired to do

My interest in having a relationship – the deeper, more commonly understood definition – with a company is directly proportional to the complexity of the job I’ve hired you to do, as follows:

Here’s how the different jobs size up.

Efficiency, simplicity, convenience

In a consumer-based world, we have but only so much bandwidth for purchasing things which require lots of our time to engage and use. Mostly, we need commodities.

And you know what? We need ‘em fast, reliable and without taking up a lot of time. In this bucket o’ jobs-to-be-done, spending a lot of cycles engaging with many companies in ongoing relationships just will not cut it. How would you get anything else done?

It’s as Jon Husband shared with me on Twitter:

<Do they even want a relationship with companies? #scrm #acinsights> I don’t

The nature of relationships in this scenario is transactional. And there’s nothing wrong with that. My bank gives me efficiency, low cost and no hassles. I’m loyal, but I don’t have a deep relationship with them.

They just happen to satisfy well a job of convenience and efficiency I need done.

Episodic interaction events

Mountain Dew ran a great social media campaign called DEWmocracy. DEWmocracy got consumers involved in a number of initiatives:

  • Ad agency selection
  • New flavor selection
  • New drink names
  • Package creation

The campaign was a great example of an episodic event to drive interactions. This was relationship-building beyond the core product offering. What made it successful is that it extended the job-to-be-done. Sure, Mountain Dew tastes great, and you can enjoy cans of it. That alone really points toward convenience and simplicity, the lowest=level relationship.

But Mountain Dew was able to elevate the complexity of the job. It got people involved in the support processes for the production and distribution. Genius, and of course, risky. But many consumers responded. They found it fun to participate, and Mountain Dew reciprocated, as Ad Age notes:

Once you’ve engaged consumers, you can’t stop. Mtn Dew made an effort to let consumers know why it was taking their advice, as well as why it wasn’t.

Now that DEWmocracy has mostly run its course, the relationship will become shallow again. Until the next event. But it has raised market awareness, and established what the company is about in consumers’ minds.

One last note here. Old Spice’s recent social media marketing blitz was not an example of addressing the job-to-be-done. It was pure marketing awareness, a point well-made by Jacob Morgan. And it worked.

Complex job, long-term usage

SAP. When you think of SAP software, do you think, “lightweight, simple-to-use, rip-n-replace anytime?” No, you don’t. SAP software is legendarily complex and powerful. They are a huge company with thousands of customers, billions in revenue and myriad business applications.

This is a complex job-to-be-done.

SAP maintains a strong customer community and extended ecosystem (including the SAP Developer Network) to manage its relationships with customers. Which makes absolute sense considering the complexity of the job-to-be-done. Customers want a relationship with SAP. Frankly, they need it.

Complex jobs often mean several things for customers:

  • Recurring need to interact with the company for information
  • Higher switching costs, increasing the need to understand what the company’s future direction is
  • Variety of use cases, meaning many ideas for future product versions

It is in these situations where the popular notion of “relationship” most closely matches what customers seek.

The core focus is the job-to-be-done

Clayton Christensen wrote this with regard to the way companies should consider their customers:

With few exceptions, every job people need or want to do has a social, a functional, and an emotional dimension. If marketers understand each of these dimensions, then they can design a product that’s precisely targeted to the job. In other words, the job, not the customer, is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy.

That’s the perspective  from companies toward customers, not so much for relationships, but for product features.

The job is also the fundamental unit of analysis going the other way, customers toward companies. Understanding the complexity of the job-to-be-done points to how deep a relationship customers want.

Filed under mba Tagged with , , , , ,

When Should Management Push Enterprise 2.0 Adoption?

June 23, 2010 10 Comments

After the Boston edition of the Enterprise 2.0 Conference, IBM’s Rawn Shah wrote a great follow-up post outlining ten observations from the event. A couple points that I found myself agreeing with wholeheartedly were:

Adoption is about transforming human behaviors at work – More folks are starting to recognize that it is not trivial to bring communities and other social environments to life.

‘Let’s get beyond “adoption”’ – This was another sentiment I heard several times, but I attribute it to short-attention span. The general statement was ‘adoption’ was last-year’s thing, and we needed a new ‘thing’.

The underlying philosophy of his post contrasts with that of Paula Thornton, who finds talk of driving adoption to be antithetical to the true nature of Enterprise 2.0. As she described in a post from several months ago:

If you have to “drive adoption” you’ve failed at 2.0 design and implementation. The fundamentals of 2.0 are based on design that is organic — meets the individual where they are and adapts based on feedback — it emerges. The ‘adoption’ comes from rigorous ‘adaptation’ — it continuously morphs based on involvement from the ‘masses’. If done right, you can’t keep them away…because you’ve brought the scratch for their itch.

While I empathize with her design-driven perspective, I personally find there to be more to people’s adoption patterns. Sometimes the superior design does not win. Existing network effects may prove a high barrier to adoption of something new. Embedded history makes the current approach valuable. And other reasons intrude.

In considering adoption, we have the push strategy (by management), and the pull strategy (viral, organically spreads). Both are viable approaches. The key factor is to determine when each needs to be employed.

A Decision Framework for Pushing Enterprise 2.0 Adoption

The graphic below outlines a basis for determining when Enterprise 2.0 adoption must be pushed, and when to let adoption be pulled:

The two key factors in the framework are user-centric and organization-centric.

The X-axis highlights a key reality. If a current approach/technology is working well enough for users, there is an inertia to making a switch of any kind. This principle is nicely captured in the “9x problem”, an explanation by Harvard professor John Gourville that was highlighted by Andrew McAfee. The 9x problem is this:

Users will overvalue existing products/solutions by 3 times, and undervalue the benefits of a new products/solutions by 3 times.

We’re for the most part risk-averse (e.g. technology adoption lifecycle is back-end loaded), and giving up existing ways presents a level of uncertainty. It’s the devil we know versus the devil we don’t. We place a value on the certainty of current methods, even if flawed.

The other part of the 9x equation is that users will place an uncertainty discount against new products/solutions enumerated benefits. Yes, it’s true. We don’t always buy everything we’re told.

The Y-axis speaks to the value of E2.0 to organizations. Certainly there will be use cases that can drive high value for the organization. And just as certainly, there will be those use cases that contribute little to organizational value.

Let’s run through the different approaches mapped on the graph, clockwise from top right.

Requires a Top-Down Push

Situation:

  • Existing ways are ‘good enough’ for employees
  • Executives see great potential for value from adoption

What might this be? Imagine management has seen too many examples of people missing key information and connecting the dots well with others are working on. An enlightened C-level type knows there is an opportunity to pick it up a level.

So some sort of social software – e.g. wiki, collaboration groups, etc. – is selected to make this a reality. But guess what? People keep emailing to one another and saving docs to the LAN.

Why? Because those are the tools they know, there is no learning curve and everyone operates on a shared set of processes and assumptions. Things work “as is”.

This is where management needs to wield its power, and come up with ways to influence employees to alter their entrenched behaviors that work “good enough”.

Mix a Push-Pull Strategy

Situation:

  • Existing ways are actually not “good enough”
  • There is high value in large-scale adoption

This is the home run of initiatives. Solves a “what’s in it for me” need of individuals, while also presenting a great chance to advance the value of the organization.

An innovation platform is a good example here. A place for individuals to express those ideas that fire them up or just plain solve annoyances. Which get lost in the email inbox.

But the opportunity for new ideas that deliver to the bottom line gets management’s attention.

Pull works here, as word spreads about the initiative. But management has an interest in making sure everyone is aware of the initiative, as soon as possible. Push tactics are good supplements.

Let It Grow Organically

Situation:

  • Existing ways are actually not “good enough”
  • There is low value in large-scale adoption

This is a tough one. Clearly the “Enterprise 2.0 way” can solve a problem for employees, but its adoption cannot be seen to lead to high impact on company value. An example here? Hmm…tough one. Enterprise bookmarking might be one area. Solves the, “how do I find things?” conundrum, for me personally and for others. But hard to see just how it will increase firm value. At least on a standalone basis.

Best to let these initiatives grow of their own accord. Let their value emerge, often with stories.

Don’t Waste Your Time

Situation:

  • Existing ways are ‘good enough’ for employees
  • There is low value in large-scale adoption

Suffice to say, this one should be killed before it ever starts.

Filed under mba Tagged with , , , , , , , , ,

Is Crowdsourcing Disrupting the Design Industry?

March 9, 2010 13 Comments

This is an issue that I simply cannot wrap my head around. Spec work appears in the design field infinitely more times than any other industry. It absolutely floors me that people think that it is even remotely ethical to build their businesses by tearing down ours.

Mark Hemmis’s comment on AIGA policy statement on spec work

The past couple years have seen an increase in the use of crowdsourcing by companies to procure design assets. It works like this:

  • Requesting organization posts a request for submissions to a design crowdsourcing site (e.g. 99designs, crowdSPRING, MycroBurst, etc.)
  • Interested designers review the request, and create their entry
  • They submit their entry to the site
  • Requesting organization selects its favorite, pays the winning designer the announced fee

These design requests are often for logos, but for a number of other types of initiatives as well. For example, 99designs’ list of requests (to the right) gives some sense of the types of projects.

So far, so good, right? Well, a lot of designers think not. As Mark Hemmis’s comment above shows, these open spec work contests have been raising the ire of the designer community.

Is crowdsourcing ripping their industry asunder?

Designers’ Beefs with Crowdsourcing

Three aspects of crowdsourcing design raise concern for many in the design industry:

  1. Lack of compensation for designers whose entries are not selected
  2. Diminishes the design profession
  3. Not sustainable in the long term

Compensation: To be competitive, individuals will need to invest some time in designing a submission for a company. With a good number of entries, this equates to a decent number of hours invested. As Pamela Pfiffner writes:

The problem is, spec and crowdsourcing can lower your value and hourly rates so far that minimum wage looks like a fat paycheck.

Her statement takes things to a logical extreme – someone would have to do nothing but spend their time entering contests. But she does a good job framing the issue.

Diminishing the profession: The issue with crowdsourcing is that it says, “this stuff is easy!” A commenter on this post, How NOT to Design a Logo, baldly gives this concern legitimacy:

Logo design contests are great, its the only way I go. I get my pick of 5-10 designs for less then $20. Designers these days are a dime a dozen, be happy you get the work.

The design industry has characteristics of being craftsman, as well as strategists. At least the higher end firms do. Sentiments like that are grating.

Not sustainable: The concern here is that over the long term, the economics of crowdsourcing will cause existing designers to exit the industry, and potential designers will opt for different careers. Here’s how Jacob Cass thinks about it:

Design contest sites are not the future of graphic design… nor do I see a time when it ever will be, however, in the long term I believe spec work is going to be detrimental to the design industry… both devaluing design and designers as a whole.

The argument here is that rather than expand the pool of talent for design, crowdsourcing will ultimately reduce the industry.

So designers themselves are lining up against these types of crowdsourcing design contests. Which begs the question…

Why Are Crowdsourcing Design Contests Growing?

I saw this comment from Jason Aiken of 99designs (March 1, 2010):

Truth is – 99designs is growing by leaps and bounds. We have record numbers of projects being launched and have needed to hire new staff to help us keep up with the growth.

The motivation of organizations seeking design work seem clear enough – tap a large network of creativity, manage expenses within budget. But what are those designers doing there?

It seems that not all designers are of the same mind about these crowdsourcing design contests. Some actually embrace them. Why?

Build your portfolio: Not all designers in the world have 10 years experience and a roster of paying clients. For those starting out in the business, the competitions provide great fuel for creating designs. If you want prospective clients to see what you’re capable of, the design competitions seem to offer a chance to create that portfolio. Benefits:
  • You need to think not abstractly about design principles, but concretely about how a design project relates to a business
  • Competitions are great for elevating one’s focus and creativity
  • You can benchmark yourself against other submissions, including those selected if yours is not

Personal interest: Some projects just pique the interest of a person. Maybe there’s a day job with a paying company, and then a chance at night to do things “your way” on a project of interest. The project taps some areas you want to pursue, or maybe allows you to try something out without concern as to whether the client will ultimately want the design.

Extra business: Everyone is hustling in a weak economy. If your design business has some slack in demand, why not apply the available creative resources toward an occasional crowdsourcing project? If you’re a professional shop, presumably your odds are better than most.

Access to high-end ad agencies: This was the case when Porter Crispin + Bogusky solicited logo designs for their start-up client Brammo, maker of electric motorcycles. They ran the contest through crowdSPRING. The contest sparked plenty of debate, but also saw 700 entries. One reason was that young up-n-coming designers wanted the chance to impress a firm of the caliber of PC+B, who can send many paying clients their way.

That’s the designer participation set of motivations. I guess the best way to think about companies’ motivation is this:

Do they get results?

Since the number of requests from companies is growing, design crowdsourcing sites are working at some level. If they weren’t, word would spread pretty quickly and companies would stop using them. This comment from designer  Morgan Stone on Alex Bogusky’s blog post about PC+B’s use of crowdSPRING is illuminating:

As a designer… crowdsourcing scares me. I think it has to do with the harsh reality that sometimes it doesn’t take experience or a big title to design something truly amazing.

What’s the staying power of the crowdsourced design contest approach? And will it disrupt the industry, in the Clayton Christensen sense?

Sustainability and Reach of Crowdsourcing Design Contests

Altimeter Group’s Jeremiah Owyang wrote last year, “Without a doubt, Specwork (like crowdspring or 99 designers) is here to stay – economics will drive this forward.” For the buyers, yes. But the supply side of the equation – the designers – is that here to stay?

I believe it is. The numbers say it is. Here’s what I mean:

In a 2009 article, Forbes noted that there are 80,000 free lance designers in the U.S. alone. Add in the talent from around the world, and you can see that there is a large of pool of creativity. Maybe 200,000 designers globally? 99designs claims roughly 54,000 designers on its site.

Designers have some motivation to participate in crowdsourcing design contests, as noted for the reasons above. It’s not like every designer will submit regularly. But every project reaches some new set of designers, and occasionally gets a repeat one as well.

All it takes is for a business seeking design work is maybe 30, 40, 50 submissions? As a percent of the global number of designers, that’s not much.

40 / 200,000 = 0.02%

Here’s what one designer said about getting clients from crowdsourcing sites:

I’ve had direct clients and also have been one of those in the crowd. Surprisingly, some of my best clients are the ones that followed me from these crowd sourcing sites. That’s probably because they’ve already been through a working process with me, and they like what they’ve experienced, so there’s no mismatch of expectations like a new client.

I do see the sustainability of the business. It’s complex, but there are enough people who do see advantages to participating. Even if only for certain periods of their lives or only on occasion. I don’t see entering crowdsourcing design contests as a full-time pursuit for someone.

Next question: how much can crowdsourcing chip away at the traditional areas of the design industry? There’s a gap that crowdsourcing addresses (Erica’s post, Bokardo’s post):

Many designers in the debate note the importance of establishing a rapport with clients, and understanding their clients more deeply than a set of colors and fonts. A firm such as Nocturnal Graphic Design Studio appears to deliver value through deeper relationships and more strategic approaches with its clients.

But Erica’s point above is well-taken. Sometimes, you’re not in the market for that level of involvement. Small and mid-sized businesses do not need the full horsepower of high-end design firms. As one designer (snootily) commented on the PC+B blog post about using crowdSPRING:

99 designs and their nefarious brethren have a client roster whose market recognition for the most part is similar to that of “joe’s morgue & jerky outlet.”

Of course, this may not be contained to SMBs.

The Disruptive Potential

Have you checked out what Mountain Dew is doing with crowdsourcing (aka “DEWmocracy”)? As Wired notes in a January article:

Mountain Dew is asking consumers to choose three new sodas, from selecting the flavors to naming them, designing the cans and choosing the ad agency to promoting the product.

Not all of this is crowdsourcing design, but it is an edgy experiment in leaving the professional firms behind.

Right now, as Steve Douglas of the Logo Factory notes, the biggest chunk of business is for logos. Which you can see at the start of this post in the 99designs project list.

The U.S. Census Bureau had the graphic design industry generating $2.8 billion in revenue in 2002. It is a large, diverse, complex industry. My expectation is that design contest crowdsourcing will encroach more into large enterprises for tactical projects, as the smaller businesses continue to use them and get good results. Large companies’ efforts, such Mountain Dew’s DEWmocracy, Unilever’s crowdsourcing contest for a TV campaign for its Peperami snack food, and Doritos’ crowdsourced Super Bowl ads, add fuel to this.

Two things are needed for the crowdsourcing model to encroach further into the design industry:

  • Leaderboards/reputation
  • Smartsourcing

Leaderboards let prospective buyers know who the best are. We see them on Topcoder for programming contests. It’s a way to establish visibility and credibility far beyond the recommendations you maintain on your own site. It will take some changes by the crowdsourcing sites, enabling recognition for designers who do well in contests, even if they are not picked. It also would need to have different bases for identifying top designers.

The other wrinkle is to allow a form of smartsourcing. Once the top designers are identified, they are invited for larger companies’ design projects. This is pretty similar to the current state of things, except the basis for access changes somewhat. It’s not just business relationships a designer/firm has established with the big ad/marketing.brand agencies. It’s based on performance.

With these two elements, I can see how crowdsourcing becomes more important, more disruptive, in the world of business design.

Filed under mba Tagged with , , , , ,

My Other Blog Covers Innovation, Crowdsourcing and Social Software

March 5, 2010 4 Comments

To really work, Sierra observed, an entrepreneur’s blog has to be about something bigger than his or her company and his or her product. This sounds simple, but it isn’t. It takes real discipline to not talk about yourself and your company. Blogging as a medium seems so personal, and often it is. But when you’re using a blog to promote a business, that blog can’t be about you, Sierra said. It has to be about your readers, who will, it’s hoped, become your customers. It has to be about making them awesome.

This is from Joel Spolsky’s Inc. column, where he also announces that he’s quitting his uber popular blog, Joel on Software. Which is incredible. Like Louis Gray giving up his blog.

Joel notes that he’s been at it for 10 years, and his company Fog Creek Software, has grown to the point where he needs to focus on its operations and alternative marketing modes. He does offer business owners some thoughts consistent with what “got him there” in terms of Fog Creek’s growth:

  • If you’re selling a clever attachment to a camera that diffuses harsh flash light, don’t talk about the technical features or about your holiday sale (10 percent off!). Make a list of 10 tips for being a better photographer.
  • If you’re opening a restaurant, don’t blog about your menu. Blog about great food. You’ll attract foodies who don’t care about your restaurant yet.
  • If you make superior, single-source chocolate, don’t write about that great trip you took to the Dominican Republic to source cocoa beans. That’s all about you. Instead, write the definitive article about making chocolate-covered strawberries.

Joel’s been at it longer than me, but those tips are spot-on for the way I approach writing on the Spigit blog. Don’t write endlessly about the product features and press releases. Write to illuminate and give identity to the nascent Innovation Management 2.0 market. What’s important to organizations beginning to look at innovation management seriously?

If You’re Tracking the Innovation Space…

To that end, I know I’ve got some readers here who have an interest in both Enterprise 2.0, and innovation. In addition to this blog, I’m writing relevant posts over on the Spigit blog. Many of these of have garnered a lot of attention (a republished version of one on Braden Kelley’s multi-author blog was the #3 most viewed post there for February).

But don’t just take my word for it. See what you think. Here are seven posts I’ve written over there. Do any of them grab you?

Study – Collaborative Networks Produce Better Ideas: Presents the research of University of Chicago professor Ron Burt, who found that more connected employees generated hiogher quality ideas.

Ideas as the Basis of Social Networks: Begins with a video by Brian Solis, who discusses the concept that ideas, more than pre-existing relationships, will be the basis of social networks. Then weaves in Joshua “Bokardo” Porter’s thoughts on social object design.

Crowdsourcing Is the New Collaboration: Compares the behaviors, groups formation and expectations between traditional collaboration and crowdsourcing. They each have a place inside organizations. Also, a good antidote to the rising outcry over spec work crowdsourcing contests.

Four Models of Competitive Crowdsourcing: Provides a look at four different ways organizations can engage customers and interested participants in the crowdsourcing process: Crowd Sentiment, Expert Decision; Crowd Decision; Expert Decision; American Idol.

Who Are Your Positive Deviants?: Positive deviance refers to practices that fall outside the standard ways in which things are done, and which provide much better than standard results. People trying unorthodox things. Finding and propagating these positive deviances is important for social and corporate advancement.

Gary Hamel: Hierarchy of Employee Traits for the Creative Economy: Hamel lays out what he views as the key employee traits in the future, as we shift from the Information Economy to Creative Economy: initiative, creativity, passion. Key for workers is to get above the line of commoditization.

Study – Distributed Idea Generation Outperforms Team Brainstorming: Researchers at INSEAD and Wharton conducted a rigorous field study, comparing in-person team brainstorming to individualized, distributed idea generation. They found distributed idea generation outperformed the old corporate standby, team brainstorming.

If those topics interest you, I encourage you to subscribe. For reference, here’s the blog’s RSS feed:

http://blog.spigit.com/feed/blog/Hutch

See you there.

Filed under mba Tagged with , , , , ,

Apple iPad and Google Buzz: Harsh Reality of Innovation

February 24, 2010 21 Comments

Nothing like putting your heart and soul in an innovation, and then getting this:

Man, tough audience. But very much in keeping with some the best advice on innovation. Which is, you can’t have innovation without some failure along the way. It’s inevitable.

That advice is both true, and glib. Innovation consultant Jeffrey Phillips catches the right spirit when he says:

Another thing about “failure” is that we try to kid ourselves that failure is a “good thing” a learning opportunity.  Well, not in most cultures.

This is the reality of innovation. It’s tough. The more disruptive an innovation, the tougher it gets. And we’re in the middle of seeing how it plays right now with Apple iPad and Google Buzz.

Let me ask you this: Do you personally think either the iPad or Buzz will be guaranteed successes for their respective companies? Be honest now.

My guess is you’re like most of us: I don’t know.

Well, truth be known, neither do Apple and Google. But they’ve got a history you’d bet on.

Apple and Google: Big Time Failures, Big Time Innovations

Both Apple and Google have had their share of duds in the market:

Obviously, these companies do not have a perfect record of successful innovations.

But they do have a record of pressing through failures and continuing to roll out innovations. In fact, they’re consistently ranked the best in the world:

It pays to stick-to-it in trying out innovations. But can everyone?

Does Your Company Really Want Radical Innovation?

In Psychology Today, a professor at the University of Michigan gets to the issue:

From vaccines to Velcro, many inventions were spawned from accidents, seeming failures. But when Fiona Lee, psychology and business professor at the University of Michigan, explored which conditions help people experiment with novel ideas, she uncovered an interesting phenomenon: “Managers talk a lot about innovation and being on the cutting edge, but on an individual level, many people are not willing to try new things.”

What’s holding us back? A fear of failure.

Think about your own reaction to the question of whether the iPad and Google Buzz will be successful. It’s easy enough to be uncertain as an observer. But imagine if you have to put shareholder capital in to it, affect your brand in the market and risk some career trajectories?

I will often read of the importance of taking risks and accepting some level of failure for companies to be innovative. This is very true. But it can be glib to summarily dismiss companies for not “getting it”. When they’re made up of people like you and me who possess ordinary…well, human characteristics.

Because how do you know when you’re iterating toward a true high-value innovation, or you’re just spinning your wheels? I’ll turn again to Jeffrey Phillips:

As Edison and countless others have demonstrated, you rarely get it right the first time, and if you are stymied by early failure, then you’ll never find and implement the best ideas.  Innovation, as has been pointed out by individuals with far more to say about it than me, will create some failures.  Your job isn’t to avoid the failures, since you can’t predict them in advance, but to reduce the cost and impact of the inevitable failures.  In other words, keep moving.

As I said before, I can’t know for sure whether the Apple iPad or Google Buzz will be successful. But kudos to those companies for rolling out innovations that might fail. And in case you’re wondering whether allowing employees some latitude to fail is worth it, check out the 5-year stock performance of Apple and Google versus the S&P 500:

Let’s take this one out with the great speech from Teddy Roosevelt:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

Indeed.

Filed under mba Tagged with , , , , , ,

Open Innovators Outperform the Market by 16.9%

December 7, 2009 10 Comments

At the Open Innovation Summit last week in Orlando, there were a number of companies there discussing their various initiatives for open innovation. What is open innovation? UC Berkeley professor Henry Chesbrough, perhaps the father of the movement, formulated this definition several years ago:

Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.

At the Summit, several companies expressed their growth related to and/or impact of open innovation:

Cisco: Cisco’s internally generated growth is at 5%. Its partner-based growth is 10%. #ois09

Clorox: Clorox target for growth from innovation is 4%. Last few years around 2.5% to 3.5% = significant portion of growth. #ois09

Royal Dutch Shell: Conser: About 40% of projects in Shell’s R&D program come from GameChanger. #ois09 [GameChanger is its open innovation program]

Rockwell Collins: Aggarwal: 75% of firms expect 40% of innovation to come from external sources by 2012. #ois09

Hewlett Packard: McKinney: 60% of ideas generated internally. Via HP Garage. Use employee crowdsourcing to filter and refine these. #ois09

Given the way these companies described their open innovation efforts, I decided to check out their stock performance. Hat tip to Jackie Hutter for suggesting this idea.

The table below compares the 5-year performance of the companies presenting at the Open Innovation Summit against the S&P 500:

It’s not a clean sweep, but most of the companies have outperformed the S&P 500 handily the past five years. While it’s not all due to initiating open innovation, it appears that you can’t rule out its influence on company performance.

Here’s how industry consultant Stefan Lindegaard describes the open innovation landscape:

I also argued that only about 10% of all companies are adept enough at open innovation to get significant benefits today. Another 30% have seen the light and are scrambling to make open innovation work and provide results that are worth the bother. I call them contenders.

The other 60% are pretenders—companies that don’t really know what open innovation is and why or how it could be relevant for them.

Looking for growth ideas? See what the firms in this open innovators stock index are doing right.

Filed under mba Tagged with , , , , , , , , , , , , , ,

← Older posts

Follow

Get every new post delivered to your Inbox.

Join 100 other followers