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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.

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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.

 

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.

Why crowdsourcing works

CrowdCrowdsourcing is a method of solving problems through the distributed contributions of multiple people. It’s used to address tough problems that happen everyday. Ideas for new opportunities. Ways to solve problems. Uncovering an existing approach that addresses your need.

Time and again, crowdsourcing has been used successfully to solve challenges. But…why does it work? What’s the magic? What gives it an advantage over talking with your pals at work, or doing some brainstorming on your own? In a word: diversity. Cognitive diversity. Specifically these two principles:

  • Diverse inputs drive superior solutions
  • Cognitive diversity requires spanning gaps in social networks

These two principles work in tandem to deliver results.

Diverse inputs drive superior solutions

When trying to solve a challenge, what is the probability that any one person will have the best solution for it? It’s a simple mathematical reality: the odds of any single person providing the top answer are low.

How do we get around this? Partly by more participants; increased shots on goal. But even more important is diversity of thinking. People contributing based on their diverse cognitive toolkits:

Cognitive toolkit

As described by University of Michigan Professor Scott Page in The Difference, our cognitive toolkits consist of: different knowledge, perspectives and heuristics (problem-solving methods). Tapping into people’s cognitive toolkits brings fresh perspectives and novel approaches to solving a challenge. Indeed, a research study found that the probability of solving tough scientific challenges is three times higher if a person’s field of expertise is seven degrees outside the domain of the problem.

In another study, researchers analyzed the results of an online protein-folding game, Foldit.  Proteins fold themselves, but no one understands how they do so. This is particularly true of experts in the field of biochemistry. So the online game allows users to simulate it, with an eye towards better understanding the ways the proteins fold themselves. As reported by Andrew McAfee, the top players of Foldit were better than both computers and experts in the field at understanding the folding sequence. The surprising finding? None had taken chemistry beyond a high school course. It turns out spatial skills are more important to solve the problem than deep domain knowledge of proteins.

Those two examples provide real-world proof for the models and solution-seeking benefits of cognitive diversity described by Professor Page.

Solution landscape - cornstalksProblem solving can be thought of as building a solutions landscape, planted with different ideas. Each person achieves their local optimum, submitting the best idea they can for a given challenge based on their cognitive assets.

But here’s the rub: any one person’s idea is unlikely to be the best one that could be uncovered. This makes sense as both a probabilistic outcome, and based on our own experiences. However in aggregate, some ideas will stand out clearly from the rest. Cognitive diversity is the fertile ground where these best ideas will sprout.

In addition to being a source of novel ideas, cognitive diversity is incredibly valuable as feedback on others’ ideas. Ideas are improved as people contribute their distinct points of view. The initial idea is the seedling, and feedback provides the nutrients that allow it to grow.

Cognitive diversity requires spanning gaps in social networks

Cognitive diversity clearly has a significant positive effect on problem-solving. Generally when something has proven value to outcomes, companies adopt it as a key operating principle. Yet getting this diversity has not proven to be as easy and common as one might expect.

Why?

Strong weak no tiesBecause it’s dependent on human behavior. Left to our own devices, we tend to turn to our close connections for advice and feedback. These strong ties are the core of our day-in, day-out interactions.

But this natural human tendency to turn to our strong ties is why companies are challenged to leverage their cognitive diversity. University of Chicago Professor Ron Burt describes the issue as one of structural holes between nodes in a corporate social network in his paper, Structural Holes and Good Ideas (pdf). A structural hole is a gap between different groups in the organization. Information does not flow across structural holes.

In and of themselves, structural holes are not the problem. Rather, the issue is that when people operate primarily within their own node, their information sources are redundant. Over time, the people in the node know the same facts, develop the same assumptions and optimize to work together in harmony. Sort of like a silo of social ties.

Idea quality vs diversity of connectionsThe impact of this is a severe curtailment of fresh thinking, which impacts the quality of ideas. Professor Burt found empirical evidence for this in a study of Raytheon’s Supply Chain Group. 673 employees were characterized by their social network connections, plotting them on a spectrum from insular to diverse. These employees then provided one idea to improve supply chain management at Raytheon. Their ideas were then assessed by two senior executives.

The results? Employees with more diverse social connections provided higher quality ideas. To the right is a graph of the rated ideas, with a curve based on the average idea ratings versus the submitter’s level of network diversity. The curve shows that with each increase in the diversity of a person’s connections, the higher the value of their idea.

Employees with access to diverse sources of information provided better ideas.  Their access to nonredundant information allowed them to generate more novel, higher potential ideas. Inside organizations, there are employees who excel at making diverse connections across the organization. These people are the ones who will provide better ideas. They are brokers across the structural holes in social networks.

Professor Burt provides the key insight about these brokers:

People connected to groups beyond their own can expect to find themselves delivering valuable ideas, seeming to be gifted with creativity. This is not creativity born of genius; it is creativity as an import-export business. An idea mundane in one group can be a valuable insight in another.

An “import-export business”. Consider that for a moment. It’s a metaphor that well describes the key value of the brokers. They are exchange mechanisms for cognitive diversity. They are incredibly valuable to moving things forward inside organizations. But are organizations overly dependent on these super-connectors? Yes. Companies are leaving millions on the table by not enabling a more scalable, comprehensive and efficient means for exchanges of cognitive diversity.

Would if we could systematize what the most connected employees do?

Systematize the diverse connections

Crowdsourcing doesn’t eliminate the need for the super-connectors. They play a number of valuable roles inside organizations. But by crowdsourcing to solve problems, companies gain the following:

  • Deeper reach into the cognitive assets of all employees
  • Avoiding the strong ties trap of problem-solving
  • Faster surfacing of the best insights
  • Neutralize the biases that the super-connectors naturally have

As you consider ways to improve your decision-making and to foster greater cross-organizational collaboration, make crowdsourcing a key element of your strategic approach.

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.

Prescribing Success with Disruptive Innovation

This is a guest post by Michael Mayers, an experienced innovation & new product development leader who has launched successful products in financial services, marketing services and health & wellness.  He tweets about innovation, entrepreneurship, and the joy of being a Brit in NYC at @mikemayers25.

At the time of writing Amazon lists 932 books released in the past 90 days under “innovation.”  Many of these will espouse a theory of one sort or another that seeks to systematize the process of successfully bringing new products to market.  And while most will deliver a superficially cogent model for the limited historic cases provided, nearly all of them will fail to deliver a prescription for future success that works in practice. (That’s right Stage Gate, I’m looking at you!)

Innovators Solution

But some time-tested theories do have prescriptive value.  In this blog post I take one such canonical model – Professor Clayton Christensen’stheory of Disruptive Innovation – and use three of its defining characteristics to help identify entrepreneurial opportunities and kick-start successful innovation strategy.

Look for 5 blade razors.

As markets mature industry leaders seek to capture increasing value from their best customers in an effort to drive profitable growth.  M&A aside this is typically achieved through the development of incremental, sustaining innovations – a process which most businesses become adept at executing.  The inevitable challenge comes when the pace of these innovations oversupply product performance for even the best and most demanding customers.  This oversupply, easily measured, is a key indicator that a sector is ripe for disruption. 

This tendency is surely no more obvious than Gillette’s flagship razor; the Fusion ProGlide with its parody-inducing 5 blades.  Arguably the maximal desired performance from the humble safety razor was surpassed decades ago with the twin-blade Trac II and the addition of a lubricating strip.

Enter Dollar Shave Club who, in 2011, recognized this performance oversupply and launched an innovative business model to attack the razor blade industry’s most over-served customers.  It’s first offering was a twin-blade razor – 70s “technology” in blade terms – sold online via a monthly subscription model at a fraction of the price of its big brand competitors.  And the attack plan is working:  The company raised $12MM in a Series B financing in October last year.

Ignore the best customers.

Take an industry’s best customers – those premium, big ticket whales with the eye-watering margins – and forget about them.  Successful disruptive innovations typically target current category low-end or non-consumers, and for two very good reasons:

Firstly, when a new entrant targets non-consumption the competitive response from industry incumbents is often muted to the extent that they may be ignored altogether; just as the personal computer industry was by mainframe manufacturers in the 1980s.  And if the interloper seeks to serve and incumbent’s low-end, low-margin customers they may even be happy to give up that pesky, profit-dilutive segment in the pursuit of better financial ratios; just as US car manufacturers gave way to Toyota in the 1980s in the compact economy segment.  And let’s face it, who wanted to sell low-margin compacts like the Corolla when you’ve earned the right to sell the S-Class? 

Secondly, the initial performance of new technologies usually fall short of the demands of an industry’s best and most sophisticated customers:  PC performance was a joke for mainframe computer buyers.  Either way a new entrant attack on an industry’s best customers is ill-advised.  Either a crippling competitive response or sophisticated customer demands will bring the upstart to its knees.  Much better to compete for low-end markets or outright non-consumption where your product can be the best alternative to nothing at all. 

Classic examples of this approach include Sony who offered a generation of new consumers access to personal, portable transistor radios while RCA doggedly stuck to heavy vacuum tube technology which afforded significantly better sound quality for the most discerning customer.  Or Nucor’s electric arc furnace, suitable only for the production of rebar at its outset, versus Armco’s integrated steel mills which produced much higher grade sheet steel.  Or Netflix’s streaming DVDs, utterly at the mercy of fickle bandwidth issues in those early days, versus Blockbuster’s DVD rental business with its significantly higher fidelity picture quality. 

When each of these technologies first launched they did not satisfy the current needs of their industry’s best customers.  Crucially – and fatally for the businesses who ignored them – each quickly shed their growing pains and enjoyed a higher performance gradient over time than existing ones.  The consequence?  Having established a beachhead amongst non- or low-end consumers those nascent technologies intercepted and then surpassed the performance of prior technologies.  Each successively picked off “low-value” customer segments from the bottom up until they adequately addressed the performance requirements of the entire market.  And it’s worth noting that Dollar Shave Club now offer 4- and 6-blade razor lines on their subscription model:  The move upmarket has begun.

Understand why the product is hired.

Why did you hire that non-fat latte you had this morning?  It’s an odd turn of phrase but you did, in a sense, hire it to do some jobs.  Maybe it was to give you a boost of energy.  Or to stave off hunger pangs until lunch.  Perhaps it was just a useful distraction or a focal point around which to socialize with colleagues.  Maybe it was all of those things.  Once you accept that we hire products and services to perform “jobs-to-be-done” (JTBD) on functional, emotional and social dimensions a whole world of insight will open up about consumer motivations and the building blocks of competition and product performance from the consumer perspective.

The story of Febreze illustrates this well.[1]  Now a $1B product Febreze was very nearly a total failure for P&G.  Functionally, it performs an obvious JTBD:  It neutralizes odors in household fabrics.  Early marketing efforts focussed heavily on this performance dimension but sales were muted.  Both the R&D and marketing teams were bewildered as to why such an obviously useful product was failing to gain traction.

Post-launch research highlighted an interesting but troubling phenomenon:  Customers were often desensitized and oblivious to even the most pungent odors in their own homes.  Functionally, Febreze solved an issue for a home’s visitors rather than its owners. 

But the P&G team had a stroke of luck:  They observed a few customers who, having worked hard to clean their homes, were then liberally applying Febreze with a final flourish.  Diving deeper into this behavior the researchers found that some customers were hiring the product to provide a visceral emotional reward at the end of a period of cleaning – a means to enhance the satisfaction of having a cleaned a room.  The penny dropped and Febreze was quickly repositioned for its emotive, rather than functional, qualities and sales soared. 

This story is often positioned as a flash of marketing positioning brilliance; a Eureka! moment that’s difficult to replicate.  But when viewed through the lens of JTBD it becomes clear that a more systematic understanding of the emotional dimensions to cleaning a home may have saved P&G from considerable heartache.  And while Febreze is now a roaring success one has to wonder how many potential category killers have been pulled from the market for want of a better understanding of what the customer was actually trying to achieve?

Flip the coin.

I’ve been looking at this in terms of using the Disruptive Innovation framework to find innovation opportunities.  However, if you are an enterprise manager working in an established industry then you can easily turn this around to find corresponding threats.  Ask yourself whether you are oversupplying your customers and delivering your own version of the 5 blade razor.  For a moment, put your best customers out of your mind and think about how traditional non-consumers and low-end markets might be better served by competing technologies.  And put the product marketing brochures to one side and ask what jobs to be done you satisfying amongst your customer base.  And finally, if and when you identify a threat or technology that is picking off your least profitable customers, don’t flee upmarket:  Stand, fight and innovate right back.

[1] This story is recounted from “The Power of Habit: Why We Do What We Do in Life and Business” by Charles Duhigg.

The Folly of Inside-Out Product Thinking

Inside out jacket

Inside out just doesn’t fit right

Ever run into this deductive reasoning?

  1. Customers like our existing products and our company
  2. We are building a new product that reflects the priorities of a company executive
  3. Therefore, customers will like our new product

It’s a clear violation of the First Law of Product: Customers decide what products they like, not companies.

Inside-out thinking is a situation where the wrong reasons are applied to decide which products are to be developed:

  • That market is so big, let’s build something for it
  • My intuition says this is the next big thing
  • This new product will position our company for what is important to us

Those reasons are actually not entirely out of the question for success either. The things that define truly inside-out thinking are (i) an impulse guided by a “we need” , not a “the customer needs” mentality; and (ii) skipping customer validation or ignoring troubling feedback from customers during validation. When you see those two dynamics at play, you’ve left the realm of sophisticated decision-making. You’re in the land of gambling with shareholders’ money. Sure, some inside-out products will succeed. But that’s analogous to saying that some lottery ticket holders win too. It’s a sucker’s bet.

Inside-out thinking is a pervasive thing. I came across this table in Gerry McGovern’s book, The Stranger’s Long Neck. McGovern surveyed  SMB users of a website Microsoft runs – Pinpoint – that helps find IT solutions built on Microsoft technologies. The SMBs were asked what their top tasks were when they visited Pinpoint. McGovern then did something interesting: he asked the Microsoft team what they thought users’ top tasks were.

The table below outlines the results:

Customer Microsoft
Internet security Customer relationship management
Backup and recovery Internet marketing
Security Network management
Desktop support Sales/lead generation
Data/document management Billing

That’s a stark difference between what users value and what Microsoft thought they did. Or perhaps what Microsoft wished users valued. As McGovern notes, “And just like every other organization on the planet, what Microsoft wants is not always what the customer wants.”

This isn’t to pick on Microsoft; it really is the case at companies everywhere. Microsoft just happens to have been open enough to share their own experience here.

You can recognize it when it happens. Here are the Top 3 signs of inside-out thinking:

  • The spreadsheet says it will be big!
  • I don’t need customer validation, they don’t know what they want anyway
  • The Board/CEO/other senior executive is pressuring us to do this

Inside-out thinking is poor decision-making, it’s a bet with terrible odds, and wastes resources. Tough to understand how we can be so methodical with other operations in the organization and still go seat-of-the-pants in this area.

Update: I hadn’t seen his tweet at the time I published this post, but Box founder/CEO Aaron Levie offers another consequence of inside-out thinking here:

I’m @bhc3 on Twitter.

10 examples of fabulously flawed product-first thinking

In talking about jobs-to-be-done here, I sometimes think that all I’m doing is stating the obvious. I mean, isn’t it obvious that you’d create something that helped fulfill a need or desire? What else would you do?

But I’ve seen in my own work experience, and across a multitude of initiatives in other industries, cases where that’s not necessarily the case. Invention was the thing. I mean that in this sense:

Invention creates. Innovation changes.

Exercising creative chops was the focus, with a thought that customers would have to take up this amazing thing invented. But unfortunately, that’s not generally the case. The invention is not adopted, and thus nothing changes for the target market. Innovation does not occur. The invention either does not address a job-to-be-done or the proposed solution was nowhere near satisfying the specific outcomes of an applicable job-to-be-done.

To illuminate how this “product-first” dynamic is a pervasive dynamic, I’ve collected ten examples of it. While the plural of anecdote is not data, see if you recognize similar examples in your own experience.

1. Because Apple, Microsoft, Google did it!

Context

Kareem Mayan wrote a great post Why only fools write code first. In it, he stated, “I have a confession to make: I’m 35, and until last year, I started building companies by creating a product.” The post describes on his evolution in thinking, focusing first on customer needs before building anything.

Product-first thinking

In the comments, someone wrote:

“Almost all of the successful startups I know of built a product first, simply because the founder wanted. Apple, Microsoft, Google, Dropbox — some of these are famous even today for never doing user surveys.”

This argument expressed skepticism about Kareem’s point.

Analysis

A good example of the ongoing pervasiveness of product-first thinking. It really is everywhere. Here, the commenter displays a classic example of the survivor bias. A focus on only those companies that made it, and what they do. Ignoring that perhaps dozens of competitors also charged ahead with their own product-first approaches. And were nowhere near as successful.

It’s like looking at the ways lottery winners live, and saying that’s the way you should live too. They’re not connected.

Of course, it’s also possible the commenter actually has no idea what those companies do in terms of understanding customer needs…

2. The “what you can do for us” attitude

Yahoo home page 2002, via All Things D

Context

Way before Marissa Mayer joined Yahoo, the company was a case study in mediocrity. From its glory days in the 90s, it had managed to become a bloated collection of media properties, without a coherent strategy due to a succession of changing executives and business models.

Product-first thinking

As reported by Kara Swisher on All Things D, Yahoo’s home page became increasingly overrun with links. To cram more stuff above-the-fold, font sizes shrunk. It became a nasty hodge podge of links that no longer related to what users wanted.

As Yahoo’s Tapan Bhat, SVP of Integrated Consumer Experiences noted,  “It had nothing to do with the user, but what Yahoo wanted the user to do.”

Analysis

What Yahoo wanted the user to. What a wonderful expression of the approach. It’s such a pernicious mode, where the needs of the company eclipse those of the customers. Call it inside-out thinking. When the company’s, not the customers’, needs drive product and service decisions, it’s a good bet customers will turn elsewhere. It’s a great opportunity for competitors.

3. Dazzled by the invention

Source: NBC Bay Area

Context

Anyone remember the hype over Dean Kamen’s project code named Ginger back in 2001? Turned out to be the Segway, that amazing triumph of technology that allowed people to travel on a motorized two-wheel scooter. It really is amazing, with its self-balancing mechanism, easy navigation and smooth ride.

Product-first thinking

It was hailed as the next coming of great technology. No really, it was. Here are quotes by both Steve Jobs and Jeff Bezos prior to its launch:

Jobs: “If enough people see this machine, you won’t have to convince them to architect cities around it; it’ll just happen.” (#)

Bezos: “You have a product so revolutionary, you’ll have no problem selling it.” (#)

Wow! So what happened? Well, have you taken your Segway out for a spin today? It  missed the mark in terms of how frequent the job-to-be-done was. For me, Segways are what tourists rent to travel around Golden Gate Park in San Francisco.

Analysis

My own perspective is that Segway is an optimum mode of transport for journeys where walking would take more than 10 minutes and less than 30. And where you don’t need to carry anything heavy or bulky. And where weather would be OK for the journey. Steve Jobs, who did heap praise on it, was prescient about what needs it didn’t fill.

“Jobs said he lived seven minutes from a grocery and wasn’t sure he would use Ginger to get there. Bezos agreed.” (#)

So Jobs and Bezos were full of praise, but in a hard analysis couldn’t quite say what mass job-to-be-done the Segway fulfilled. And it turns out most of the market couldn’t either. Sometimes the invention is so dazzling, we’re blinded to understanding what need it actually fulfills. Invention first thinking.

4. Same template, different market

Via Bloomberg Business Week

Context

Ron Johnson did a fantastic job of creating the Apple stores. They’re enjoyable to visit, full of all the latest in cool technology Apple has to offer. The clean vibe, the on-the-spot purchasing, the Genius Bar. Clearly he brought some of the experience from his Target (aka “Tar-jay“) days to the job.

Based on this, the Board of JC Penney installed him as CEO to restore a retailer that had lost its luster.

Product-first thinking

Johnson put in place a number of changes to reinvigorate the retailer. He stopped the discounting, going for a low price everyday approach (like Target). He developed brands that would be exclusive to JC Penney (like Target). Trained employees to help people shopping (like Apple).

Ultimately, however, his changes didn’t take. Perhaps the most telling insight came from another executive:

Ron’s response at the time was, just like at Apple, customers don’t always know what they want,” said an executive who advocated testing. “We’re not going to test it — we’re going to roll it out.”

There it is, product-first — or maybe vision-first — thinking.

Analysis

It’s tempting to look at this as the hubris of being smarter than customers. But I don’t think that’s the lesson to draw. Rather, this is a case of previous success with a format in other markets (Target, Apple), and applying it to a new market. Without understanding the customers in the new market. The fact that Johnson didn’t feel the need to run the new strategies by JC Penney’s customer base was due to his success with the template previously. Why test? You know what customers want.

But in this case, it led to overlooking existing customers and what they outcomes were being fulfilled by JC Penney. This alienates the core customer base, while potential new customers ponder why they’d switch from Target to JC Penney. Unsurprisingly, the stock dropped 55% during his tenure, with a horrendous 32% drop in same-store sales in the critical holiday 4th quarter of 2012.

5. Blaze a new trail

Context

Tired of people saying you should listen to the marketplace, Dan Waldschmidt advocates something different. He argues that most of the time, people don’t know what they want. In making his argument, he references both American slavery and Martin Luther’s religious reformation.

Product-first thinking

Here is how Dan puts it:

One of the things business experts tell you when you are considering changes to your sales strategy is the idea that you need to “listen to your marketplace”. That you need to take your idea and run it by the people around you to get some feedback. Instead, blaze a new trail. Think about where you want to lead your market.

Analysis

Perhaps the key phrase is lead your market. That, in and of itself, is fine. Lead your market in sales. In profits. In innovations that resonate. But in the context of (i) ignoring the marketplace; and (ii) blazing a new trail, it comes across as advice to tell the market where it needs to go. Which actually is nice if you can accomplish it. Alas, the business landscape is littered with folks who tried to tell the market where to go. The market can be fickle that way.

To be fair, it is important to separate the jobs-to-be-done from the potential solutions. That’s a better way to think about Dan’s advice.

6. What Steve Jobs said

Via Inc. Magazine, 1989

Context

Perhaps you have seen this quote by Steve Jobs:

“You can’t just ask customers what they want and then try to give that to them.”

Run a search on that exact phrase, and 687,000 results are returned. It’s a sentiment from one of the all-time greats that clearly has caught on.

Product-first thinking

Interpretation is important here. When you read a number of articles that reference the quote, the context is one of divining products that no one in the market would come up with. Use your inner genius to do this. As written about Jobs  in Fast Company:

He is a focus group of one, the ideal Apple customer, two years out.

And he was quite good.

Analysis

But for most of us, we’re not an ideal focus group of one. That’d be the dangerous lesson to draw from his quote. If every corporate product person, or innovator, or strategist decided to channel his inner focus group of one, there’d be a lot of  wasted resources. Actually, there are a lot of wasted resources

The other thing to note is the quote in its fuller context. Here’s more from Jobs in the 1989 interview with Steve Jobs where he first said that quote:

“You can get into just as much trouble by going into the technology lab and asking your engineers, “OK, what can you do for me today?” That rarely leads to a product that customers want or to one that you’re very proud of building when you get done. You have to merge these points of view, and you have to do it in an interactive way over a period of time—which doesn’t mean a week. It takes a long time to pull out of customers what they really want, and it takes a long time to pull out of technology what it can really give.”

Sound like he’s advocating to ignore your customers?

7. My business model demands your attention

Facebook Home user ratings

Facebook Home user ratings

Context

A few months ago, Facebook introduced Facebook Home. This app for Android became the user interface of the phone. In so doing, it dominates the experience on the device:

Designed to be a drop-in replacement for the existing home screen (“launcher”) on an Android device, the software provides a replacement home screen that allows users to easily view and post content on Facebook along with launching apps, a replacement lock screen that displays notifications from Facebook and other apps, and an overlay which allows users to chat via Facebook messages or SMS from any app.

Note that the existing Facebook app was still available, allowing you to get your Facebook updates via the phone.

Product-first thinking

What Facebook Home does is elevate Facebook above all others on the phone. It was a play to get Facebook front and center in your daily experience. There would be access to all your other apps, but the path to them would go through Facebook each and every time.

Globally, the average smartphone user has 26 apps on their phone. For Facebook Home to be popular, the typical user would rank Facebook above all other apps. The games. Email. Twitter. Instagram. And on…

Analysis

Ultimately, Facebook Home withered in the market. I can understand why. In 2012, mobile time spent on Facebook surpassed time on the Facebook website. From a user experience perspective, Facebook wanted to make mobile even easier. From an advertising perspective, Facebook needed to establish a way to present more mobile ads. Imagine serving up an ad every time someone turned on their Android phone.

But the problem is that Facebook was solving a job that most users were already satisfied with. The Facebook App works well for its purpose. It also imposed new friction on using one’s mobile device. The burden of navigating through Facebook to get to your other 25 apps. As Joseph Farrell, EVP Operations at BiTE interactive, said:

“Facebook Home solves Facebook’s needs for more user data, but what does it solve for its users?”

8. Solution in search of a problem

Context

In a post, entrepreneur Ramli John talked about lessons he’s learned from failed startup efforts. Specifically, the experience gained with Lesson Sensei. Lesson Sensei didn’t make it.

Product-first thinking

Ramli states plainly the trap he fell into:

“Don’t lose focus of the problem. That was one of the biggest mistake I made in my previous failed startup, Lesson Sensei. About a few weeks in, we realized that we really don’t have a problem to solve. But, we had this awesome solution. So we started pivoting on possible problems we can solve with our solution. Each week, we tried a new problem to solve. Each time, we found a flaw with our assumption. Then, we started losing steam. Always start with validating a problem before you validate the solution. The other way around just takes up too much time and energy.”

Analysis

This is a classic issue. There’s a hazy sense of what an idea could address. It’s not nailed down yet, but there’s the rush of starting on the solution anyway. To be fair, there is some merit in this. You could be 50% there in terms of product-market fit, and the initial product can help elicit the right iterations. But as Ramli notes, that can be an expensive approach. It burns time, energy and money. And depending on how hazy that view is of the actual job-to-be-done and its attendant outcomes, you may be entirely off track.

9. We’ll get to those customers at some point

Context

Robin Chase is the founder and former CEO of Zipcar (acquired by Avis in 2013). After Zipcar, she founded GoLoco, a carpooling app. Unlike Zipcar, GoLoco didn’t make it. She is now leading Buzzcar, a peer-to-peer car sharing service.

Product-first thinking

Robin is open about the failure of GoLoco:

“With my second company, GoLoco – social online ridesharing – we spent too much money on the website and software before engaging with our first customers.”

Analysis

In some ways, this is a similar situation to Ron Johnson at JC Penney. Having been successful in getting Zipcar going, Robin had a confident attitude about her new endeavor. That confidence led her to develop first, worry about customers later. As she notes, this was backwards. The spade work of understanding customers’ needs is a critical first step.

10. Dazzled by the innovator and the hot trends

Color website is deadContext

Remember Color? This app would let you take pictures. These pictures were then visible to anyone with the Color app within 100 feet of you. It was a way for friends or strangers to participate together in some close proximity.

Color is no more. It didn’t fare well.

Product-first thinking

It was a can’t-miss app. It was started by an energetic, persuasive entrepreneur whose previous company was bought by Apple. It was SOcial. It was LOcation-based. It was MObile. It was SoLoMo!

With that combination, Sequoia Capital and Bain Capital felt confident investing $41 million. Product-first thinking.

Analysis

Presumably, the entrepreneur’s previous success was a good-enough proxy for understanding the target market’s jobs-to-be-done and attendant outcomes. However, as seen with GoLoco above, previous success doesn’t automatically grant the ability to divine customer needs. There’s still the work of understanding the market you intend to tackle.

GigaOm’s Darrell Etherington gets props for identifying the flaws of Color right at its launch:

“But I think it’s more likely this is a prime example of how, when it comes to apps, 1+1+1 does not always equal 3. An app can’t just hope to profit by being at the intersection of a number of promising mobile trends. Developers still have to think intelligently about how those trends integrate, and remember that user experience, especially the one following first launch, is still the key to wide app adoption.”

Remember this next time you see another startup in an overhyped space, say Big Data. What job-to-be-done does it fulfill?

Wrap-up

Perhaps not surprisingly given my work experience and interests, these examples have a heavy technology orientation.  One can imagine similar cases in financial services, apparel, consumer product goods, etc. Hopefully the examples here will be useful as you look at your own world. And in your own work. I’ll admit to being guilty of product-first thinking. The creative muse is a strong human characteristic. But recognize when that muse is taking you down a path you shouldn’t go.

I’m @bhc3 on Twitter.

Latent needs are overplayed as an innovation dynamic

Reading this thought piece from the Silicon Valley Product Group, The End of Requirements, I saw this point about latent needs:

Unrealized needs (also called “latent needs”) are those solutions where customers may not even be aware they even have the need until after they see and experience the solution. Examples include digital video recorders, tablets, always-on-voice, self-driving cars, etc.

In other words, customers often don’t know what they want. This is essentially another version of the Henry Ford quote, “If I asked people what they wanted, they’d have said faster horses.”

I want to differ with the Silicon Valley Product Group here. People do know their needs, it’s incumbent on companies to understand them. Then it’s appropriate to try out ideas that can better satisfy those jobs. This diagram illustrates the two separate dynamics:

Decoupling customer JTBD from solutions

In their post, they use self-driving cars as an example of “latent needs”. Two issues with that. First, self-driving cars are not yet in the market, so it’s not possible to say that was a latent need, as described by the Silicon Valley Product Group. The second issue is that self-driving cars will actually address known jobs-to-be-done. I wrote a whole post on that, Exactly what jobs will self-driving cars satisfy? In that post, I outline several jobs-to-be-done and some key outcomes desired:

Job-to-be-done Outcomes
I want to get from point A to point B Minimize commute time | Minimize accident risk | Minimize commute risk | Increase driving enjoyment
I want to get work done Increase digital work completed | Increase availability for conference calls | Minimize distractions
I want to improve the environment Minimize emissions | Minimize fossil fuel consumption
I want to enjoy my personal interests Increase spent on activity | Minimize distractions

The point here is that these are not latent needs. Some are needs that people do not think about now in the context of commuting in a vehicle. But they are not latent needs.

I do agree there are some needs that can be hard to discover, or which become more important as societal norms and expectations change. Sure, there are some needs that are not obvious and may indeed become more visible in the face of a potential solution. But these are exceptions, not the norm.

Making product and innovation decisions based on the thought that, “Well, people don’t really know what they want” is a recipe for a lot of wasted effort. It’s not a sustainable basis for growth.

Agree? Or think I’m oversimplifying things?

I’m @bhc3 on Twitter.

Generate opportunity maps with customer jobs-to-be-done

JTBD Opportunity MapIn seeking to better understand customer jobs-to-be-done, I found myself a bit underarmed. Meaning, I didn’t really have a way to do this. The value of jobs-to-be-done (JTBD) thinking has only emerged recently. It’s still nascent, and there aren’t ready guideposts to follow. However, Tony Ulwick has been at it over two decades. Indeed, his outcome-driven innovation remains a powerful methodology with the structure needed to effectively identify opportunities. It is the JTBD standard.

But in my work, I wasn’t ready to engage external consultants. My project was more low level, relating to a significant enhancement to an enterprise software platform. My needs – and budget – didn’t rise to the level of a full-fledged consulting engagement. Also, I wanted to be the one talking with customers.

So I did what anyone interested in innovation would do. I hacked my own approach.  I wanted a way to elicit jobs-to-be-done that had the following aspects:

  • Accessible anytime I wanted it
  • Low cost (free!)
  • Allowed me to rank  different jobs-to-be-done
  • Created a way of seeing where the opportunities are
  • Deepened my understanding of, and connection with, customers

The presentation below outlines a method to generate opportunity maps with customer jobs-to-be-done:

——-

As you’ll see in the presentation, I consider this an initial blueprint. One that can, and should, be hacked to optimize it. But as the approach exists now, it will provide significant value. And for those who haven’t engaged customers at this level of dialogue, you’ll be amazed at what you learn.

Give it a try and let me know what value you get in talking JTBD with your customers.

I’m @bhc3 on Twitter.

A Method for Applying Jobs-to-Be-Done to Product and Service Design

Say you’re designing something new for a product or service. Of course, you have your own ideas for what to do. But, how informed are you really about what is needed?

This is a question I faced in thinking about game mechanics used in a social platform. A common product approach is to work up some game mechanics ideas, get them designed and deployed. The source for ideas? My own fertile mind. Inbound suggestions (“in World of Warcraft, you can…”). Competitors. What companies in other markets are doing.

But that wasn’t sufficient. Game mechanics are an evolving, somewhat complex field.  I wanted to understand at a more fundamental level: why game mechanics? So I decided to learn more from our customers. What needs would game mechanics address? Initial question: what’s the best way to go about this?

Jobs-to-Be-Done: Only for game-changing innovation?

The jobs-to-be-done framework struck me as the right approach here. What are customers trying to get done? As legendary professor Theodore Levitt said:

People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.

Similarly, I didn’t believe customers wanted to buy “game mechanics”. They want to buy results, which game mechanics can help deliver. Using the jobs-to-be-done framework, what jobs were game mechanics being hired for?

Yet, in reading the advice on jobs-to-be-done, one gets the impression that eliciting jobs-to-be-done can only be done effectively via intensive in-person interviews. Well, I didn’t have the capacity to fly around for one-day deep-dive sessions to understand the jobs-to-be-done related to game mechanics.

Customer Insightini

And this gets at something related to jobs-to-be-done as it stands today. It’s very much positioned for high-impact, game-changing innovation. Which is awesome, by the way. Firms like Strategyn and ReWired Group are setting the tone here. When the payoff for intensive, expensive efforts like in-person interviews is high-value innovation, you do them.

But my needs were at a lower level than that. In the Customer Insightini™ to the right, I segment the types of initiatives where customer insight can be useful. The bottom is the minor stuff (“it should support colors red, green, blue…”). The top is the game changing endeavors (e.g. surgery stents). My game mechanics inquiry? Right there in the middle. Introduction of something new in the same market.

Since I couldn’t find a good framework to elicit customers’ jobs-to-be-done, I hacked together my own methodology. It’s described below.

  1. Job-to-be-done structure (link)
  2. Focus the effort (link)
  3. Rate satisfaction with fulfillment of each job (link)
  4. Rank order importance of jobs to create an Opportunity Map (link)
  5. Use a website to manage the jobs-to-be-done (link)
  6. Conversations are as valuable as the jobs themselves (link)
  7. Step-by-step plan (link)

Job-to-be-done structure

I needed a common language for the various jobs-to-be-done. Specifically, I needed a reliable format that provided the right information. I came up with the following:

Context: “When I am…”

Job: “I want to…”

Success metric: “Increased…”

Context is important, because I want to understand the background for the job to be done. When did it happen? What was the larger goal? The job itself is the core information to be collected. The success metric told me what the customer valued in an outcome, and provided a basis for measuring whether the idea implemented to fulfill the job was actually doing so.

Focus the effort

Something I’ve learned in the realm of innovation management: focused initiatives outperform post-whatever-you-want initiatives. In other words, participants should be asked for insight on a specific topic. Otherwise the exercise risks spinning off in many directions you’re not ready to pursue.

In the game mechanics effort, I started with a definition of gamification itself. This set the tone for the discussion. I believed there were several areas that could benefit, so I focused the discussion around collaboration, engagement and three other areas. This framed the discussion without corralling customers too tightly in what they wanted to express. It also gave a nice rhythm, as we worked through each of the five areas.

Unsurprisingly in the discussions with customers, they had ideas for applying game mechanics to a job-to-be-done. Since the discussion was focused on their needs and wants, I would take these ideas and add them to a separate idea community.

Rate satisfaction with fulfillment of each job

This step was critical. It wasn’t enough to have the various jobs-to-be-done. Understanding the level of satisfaction with each one is the metric which shows where good opportunities lie.  I asked customers to bucket each job-to-be-done as:

  • Satisfaction with current outcomes = HIGH
  • Satisfaction with current outcomes = MODERATE
  • Satisfaction with current outcomes = LOW

Now, there was a natural bias for customers to provide jobs where their satisfaction was lower. They wanted to talk about things that need to be improved. But I wanted to ensure a broader look at the landscape of jobs. So in the course of the discussion, there were three sources of jobs-to-be-done that came outside of these  low-satisfaction ones:

  1. Seeded obvious jobs: I seeded the site with some of the more obvious jobs, to provide examples.
  2. Jobs provided by previous customers: As I learned new jobs from a previous discussion, I’d add them to the new discussion. This was good to see how customers felt about what others were trying to get done.
  3. Jobs elicited in discussions: After getting one job from a  customer, we’d discuss it. In that discussion, you’d hear another job-to-be-done. While that one may not be low satisfaction, it was important to capture it for a fuller understanding.

As you can imagine, there were varying views on level of satisfaction for the same job across customers. Is the software performing differently for each? No. But each customer was communicating the level of outcome they deemed satisfactory.

Rank order importance of jobs to create an Opportunity Map

After the jobs were sorted into the LOW, MODERATE, HIGH satisfaction buckets, I asked the customer to rank them in relative importance, highest to lowest. This was their chance to tell me just what they valued most. Even if their satisfaction was moderate with a job’s outcome, it was valuable to know what they deem most important. Useful for fuller understanding of why customers buy. Because you want to avoid being one of these companies:

The vast majority of companies have no clue what their customers value in the products and services they buy.

Here’s what you get after you’ve done this: an Opportunity Map as determined by the customer’s expressed needs.

JTBD Opportunity Map

After talking with each customer, you’ll be able to generate an Opportunity Map. By aggregating the responses by customers, you have a broader Opportunity Map    that begins to reflect something of the market.

Use a website to manage the jobs-to-be-done

The preceding elements of eliciting jobs-to-be-done are the method. The method needs a place to execute it. For my gamification project, I used the free post-it note site Listhings. With that site, I can add unlimited canvases (for different customers) and individual notes (for the jobs). You can color code the different sub-topics within the question you are asking.

Examples of Listhings culled from an actual customer discussion:

Listhings example

Conversations are as valuable as the jobs themselves

In the process of collecting the jobs-to-be-done, I found the discussions around each job-to-be-done to be incredibly valuable. And this is an important point: customers want to talk to you about what they’re trying to get done! The discussions were intelligent and gave me insight into their world. An insight I cannot get from data about usage or the user stories I write in a vacuum.

This experience is what makes me cringe when I read others throwing around the old Henry Ford chestnut: “If I had asked people what they wanted, they’d have said faster horses.” It assigns customers to the Dumb Bucket.

Interesting experience in doing these with 8 different customers. I would schedule a one-hour session with our admin leads at each. Inevitably, we’d run out of time in that first session. Every single customer was up for a second session. One customer even wanted a third and fourth session, bringing actual end users into it for their perspective.

Perhaps this can be a good path for a design thinking approach, as it really boosts your empathy for what customers are trying to get done as you discover their jobs-to-be-done.

Step-by-step plan

OK, that was a lot of information about individual parts of this jobs-to-be-done methodology. Let’s put it together into a plan:

  1. Establish a topic you want to explore more deeply with customers.
  2. If the topic is somewhat broad, break it down into sub-themes.
  3. Sign up for a site where you can collect jobs. Criteria for such a site:
    • Each job is visible in full on screen
    • Ability to segment the jobs by sub-themes
    • Ability to categorize jobs by level of satisfaction
  4. Seed the site with some obvious jobs that your product/service provides.
  5. Select customers to engage.
  6. Use a web/screen sharing tool to run the discussion (e.h. WebEx, GoToMeeting, Skype, Google Plus).
  7. Plan for an hour, expect to need a second one.
  8. As you talk with the customer, post the jobs in real time so she sees them on screen.
  9. Run through the satisfaction bucketing (LOW, MODERATE, HIGH)
  10. Rank order the jobs within each satisfaction bucket
  11. Collate and aggregate the responses after you have finished the customer discussion. I used Excel for this.
  12. Identify the jobs that were most important and received LOW or MODERATE satisfaction across your customers.
  13. Plumb your notes from the discussions for additional insight that will be useful

The other thing you’ll gain from this are customers who have a demonstrated interest in the phases that follow in the design and development process: ideas, prototypes, early purchasers.

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

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