Archive for August, 2010
Listening to customers…. really listening.
Posted by John in business models, design, innovation, innovation strategy on 11 August 2010
One of the consistent messages from innovation surveys is that customers are a major source of innovation. Sometimes customers with more extreme uses for products will adapt products to suit their purpose and then the manufacturers find out what is happening and take these adaptations on board. If you’ve seen the videos of big wave surfing, many of the board modifications were made by the surfers and then adopted by the makers.
On other occasions, a customer might give an idea back to the producer but often they won’t give the feedback unless it is asked for. Getting to know your customer better is a good way to improve your innovation performance.
One of the featured companies in the Brisbane Innovation Scorecard was Aluminum Boats Ltd. This company is in a tough industry where costs are rising and the strong Australian dollar makes competitiveness a real challenge in export markets. Nonetheless they have managed to grow the business and continue to win contracts. For this company, the customer is central to the innovation process and the strategy of the company. To get the type of innovation they need, the company forms long-standing relationships with key partners. As stated by the managing director of the company, Roy Whitewood,
We set out to be different from the beginning. Most boat builders in our class tend to work on one-off projects.
Four years ago we chose a different direction for Aluminum Boats. We selected big clients and work with them to solve problems. We innovate openly with our clients in design and process. In this way we also manage all aspects of our boat building with the highest quality materials and latest construction techniques.
On receiving the award for product innovation at the launch of the Brisbane Innovation Scorecard, Stuart Pascoe, Aluminium’s GM, talked about the commuter ferries that were the focus of the prize. He talked about not only listening to the customer, but also the customer’s customer. So not only did they work with the ferry operator to design the right boat for the job but they also talked to the commuters who used the ferry. When they asked commuters about what is was like to live on an island in the bay and commute to Brisbane, it seems that many didn’t like the slow travel times. One of the reasons for the slow commute was the problem of hitting dugongs. These are protected animals. The result was a dugong-friendly fast ferry and as Stuart puts it in an interview, a hit might give the dugong a headache but it won’t kill it.
.jpg)
After the launch of the scorecard, I took a taxi back to the university to catch up on work. I was set to make a few phone calls on the way when I realized that the taxi driver was a very talkative fellow, so I put the phone away. One thing about Australian taxi drivers is that they are very likely to ask you everything about your life, without any sense of this being inappropriate. This driver wanted to know what I had been doing in the city, so I told him about the launch of the Innovation Scorecard and the companies that had been recognized for their leadership in innovation. When I mentioned Aluminium Boats he turned to me and said that he knew the company well and thought they were an excellent business.
It turned out that my driver was a volunteer coast guard and was a part-timer skipper of one of their boats. He said that they had a few boats but the one designed by Aluminium was by far the best. When I asked him why, he said that the company had spent a lot of time talking to everyone who worked on these boats. They really wanted to know what it was like to be searching for people in the water at night and what it was like to spend a long time on the boats during an emergency. My driver had told them about vision problems in low light conditions and the need to have a special set up in the cockpit with night-vision. This need was incorporated into the final design. Tim writes about empathy-driven innovation and Aluminium Boats is a very good example of what he is talking about.
The thing is that Aluminium is organized for ‘listening’ and its not just something that is part of their marketing. Having 90% permanent staff in an industry where subcontracting is common, fewer customers where long-term relationships can be formed and sticking with design and construct jobs are all strategic choices that help them to listen better.
As Stuart Pascoe, GM says
We don’t bash the problem over the head with a hammer. We go out, meet the agencies and find a way around it.
Don’t Hire Experience, Hire Learners
Posted by Tim in book riffs, evolving economic entities on 10 August 2010
A few weeks ago, the Australian Financial Review published an article discussing how Australian employers value job candidates with an MBA. The short summary is: they don’t value MBAs at all. One headhunter was quoted saying something along the lines of “most employers say that if you have to choose between getting an MBA or getting two more years of experience, you’re much better off with the experience.”
This is one of the dumbest things I have ever read. Ever.
Here’s the problem with this idea: if you get two more years of experience what are you likely to be going? You’re most likely to be doing exactly what you’re doing right now. This has no practical value at all.
Jason Fried and David Hansson make an important point about this in their book ReWork. They say:
Of course, requiring some baseline level of experience can be a good idea when hiring. It makes sense to go after candidates with six months to a year of experience. It takes that long to internalize the idioms, learn how things work, understand the relevant tools, etc.
But after that, the curve flattens out. There’s surprisingly little difference between a candidate with six months of experience and one with six years. The real difference comes from the individual’s dedication, personality, and intelligence.
I’ll add one other critical factor to this – the real difference comes from peoples’ ability to learn. The problem with experience in the same job is that you stop learning. So staying in the same position that you’re currently in instead of doing an MBA, or doing anything that’s different is a problem – you’re not learning anything new.
I’ve hired a lot of people over the years, and my track record has been pretty good. Reading ReWork made me realise something – I can’t remember ever hiring someone that had a lot of experience in the job I was hiring them to do. Why? Because I’ve worked in areas that were changing. People with experience in the job had a bunch of bad habits that weren’t suited to the changing environments. It was always better to hire someone that could learn. Learners are much better equipped to deal with change.
If your industry is stable, with very little change, then you can afford to hire experience.
On the other hand, if your industry is changing, then experience is too expensive. You’re much better off hiring someone that is a skilled learner.
There are plenty of ways to identify skilled learners. They move from position to position relatively frequently (even if they’re in the same organisation all the way through), the initiate things, they talk about learning when you discuss their career trajectory with them. Some of them might even take some time off from work specifically so that they can learn some new skills.
Forget experience – hire learners.
Strategy is What You Do
Posted by Tim in book riffs on 9 August 2010
I spent a very enjoyable day today working with a group of people that basically act as innovation consultants. They each work with firms in order to help them develop and embed innovation processes.
In the course of the day, several of them said something that went something like “we’re not sure how their innovation plan fits in with their strategy.” One of them also said this about one of the firms that he works with: “Their strategy seems to be pretty good, even though it isn’t written down.”
This raises an important point – your strategy is not what you say, your strategy is what you do.
The split between strategic planning and strategic action is extremely dangerous. Too often, firms will write out a strategy and then think that their problems are solved. This never works.
Think of it this way – if your strategy isn’t written down, do you still have a strategy? Of course. Strategy is the set of choices you make about what business your in, and how you’ll win.
If your firm is operating, you are in some business, whether you’ve written it down or not. In the same way, one way or another you have some set of qualities that entice people to pay for whatever you’re providing. These constitute your strategy. It doesn’t matter if it is formally written out or not.
So if one of the parts of your strategy is to make innovation a priority, it doesn’t matter how many you times you write that in your strategic plan, or in your mission statement, or in your values. The thing that matters is what you do on a day-to-day basis.
The advantage to writing out a strategy is that it can make it easier to decide what to do when it’s Tuesday morning at 10:30 am and you sit down at your desk with some free time. If you’ve already thought out your strategy, the choices that you’ve made in doing that can guide you in your current choice of how to best spend your free time. But the strategy isn’t in the document, it’s in the choice you make at 10:30 am.
In other words, your strategy is not what you say, your strategy is what you do.
Craft-Based Innovation – Dodocase
Posted by Tim in business models, innovation strategy on 8 August 2010
Check Kevin Rose‘s of the Dodocase for iPad, one of the more gorgeous things I’ve run across recently:
Schumpeter defined innovation as the formation of new connections which drive economic growth. In The Nature of Technology, Brian Arthur reinforces this idea by saying that all new economic ideas build on the combination of things that already exist. In this case, Dodocase has come up with an innovative craft-based business model by combining the idea of artisan book-binding techniques with the new technology of the iPad. Both of these are then combined to answer the question ‘what if our iPad case looked like a Moleskine notebook?’
There is so much emphasis these days on getting to scale that we often lose sight of the value of craft. Here is the video that documents the construction of the outer case – you can see the craft in the process:
The bamboo part of the case obviously requires some skill to build as well.
The really interesting part of the Dodocase story to me is the price: it lists for about $60 US – which as about as much or less than you’d pay for nearly all of the mass-produced iPad cases that are available. Traditionally, we’ve often thought that the problem with craft-based business models is that it is a much more expensive way to produce things.
But as the Dodocase shows, this is not always the case. The real problem with craft is that it is slower. There is currently a 4-6 week wait list to buy one.
Innovation is about coming up with new combinations of ideas. They don’t always have to be cutting-edge things. The Dodocase is a great example of combining ideas that have been around for a long time – people have been binding books in this way for centuries, and the Moleskine-style design has been around for ages as well. They’ve combined these two ideas to come up with something that is unique.
And pretty cool…
(hat tip to CrunchGear for pointing me to these two videos)
Convergence Culture & Innovation
Posted by Tim in book riffs on 5 August 2010
Mitch Joel points to this excellent video by Henry Jenkins, which outlines some of the key points from his book Convergence Culture:
Mitch uses this to point out the importance of storytelling in marketing:
The brands that win are the brands that tell a great story. When it comes to transmedia storytelling, the brands that win are the brands that tell many great stories and are able to connect them all together. One way to get better at telling great stories, comes from understanding the structure, form and ingredients of a great story.
He then includes 15 books that help explain how to create a great story.
I think that this is also critically important for innovation. One of the issues in innovation is that we not only have to come up with great ideas, and figure out ways to make them work, but we must also figure out how to get them to spread. This is a storytelling problem.
Transmedia is the idea that we now have multiple media channels that we can use to tell our stories. Michael Wu criticises the simplistic view of this which views the multiple channels as simply more routes to take in broadcasting from us to our customers. He includes this graphic, which shows the ideal in the third panel:
He encourages using these multiple channels to encourage interactions among the people using our ideas.
This is an essential innovation lesson. Getting our great ideas to spread is the last step of the innovation process. We now have many new methods that can be used to do this. If we’re smart, we won’t simply use these as new channels that allow us to do the same old thing. Instead, we’ll also be innovative in our use of the new media pathways. That’s the best way to improve the chances of getting our ideas to spread.
Sustainable Innovation
Posted by John in innovation on 4 August 2010
Last week Tim and I were at the launch of the inaugural “Brisbane Innovation Scorecard”. It was a really nice event with 200 people in the room for lunch with many high-profile speakers. I have been involved with the project since March and its amazing to see something go from a small concept to such a major event. You can get a digital copy of the report here.
There were several interesting results from the survey including:
* Customers and suppliers are major sources of innovation for all types of firms
* New and improved goods were highly correlated with international sales
* Open innovators, those using external sources of innovation, were more likely to have combinations of innovation in goods, services, manufacturing processes, and logistics and distribution methods. They were also more likely to be selling into international markets.
* Most innovators do not use formal methods of IP protection. Secrecy agreements are reported to be the most common method to protect innovations.
The strongest thread of evidence from the survey data was that open innovation was linked strongly to innovation performance. We still need to track these data over time but to get a clearer picture of how open innovation drives growth but it does fit with other international evidence about the importance of collaborative innovation.
The highlight of the scorecard launch were the awards for business leaders in product, process and service innovation. These awards received a fair degree of media coverage on television and the newspapers. The ABC did a nice short story that you can watch here.
While its always nice to get coverage like this, it was just a little bit frustrating too because we didn’t manage to get the main message from the study across. The focus was on companies and their inventions- not how they were leading innovation. We had many examples of companies that had come up with a neat invention but in very few cases could we see how there were processes in place to sustain the innovation process over time.
When I talk about sustainable innovation, I don’t mean it in the environmental sense. I’m actually thinking of how ingrained the innovation process is in the DNA of the business. Inventions that are responses to a crisis or the result of one person’s dedication are probably a one-off. Great businesses grow through consistently trying out new ideas from inside and outside the company, trialing the ideas and then scaling up the ones that work. It’s an onging process, rather than a one-off event, as one of the prize winners puts it:
So innovation not only becomes an essential part of the way we do business but hopefully will generate the nest series of innovations. The great part of these innovation projects isn’t just the outcome, it’s the learning that everyone is involved in.
Tom Maguire- GM Corporate Affairs and Innovation, Teys Brothers.
And there is a similar theme with GHD, the winner of the services innovation award:
We know that our people are clever and creative. Our innovation program offers a platform for people to collaborate on ideas, and provides a transparent, formal process through which their innovation can be recognized.
Jeremy Stone- Group Manager Innovation, GHD.
Leading innovation isn’t just about being heroic, it’s also about managing a process of idea generation, selection and diffusion. In the long run, embedding the process so it’s not dependent on particular individuals will sustain the creation of valuable innovations.
I Could Have Done That!
Posted by Tim in innovation on 3 August 2010
Nancy Duarte beautifully tells the story of the architect Filippo Brunelleschi and how he won the right to build the Dome for the magnificent Cathedral in Florence.
It’s a terrific story, and you should go read it – it’s ok, I’ll wait.
…
So, the climax of the story is that Brunelleschi does something clever with an egg to win the job. When the other architects that were bidding for the job saw his trick,
The other architects protested that they could have done that, too, to which Filippo replied that they could have built the dome, too, had they seen his model. Impressed, the judges awarded Filippo the commission to construct the dome.
This reminded me of one of my own stories:
One of the best live shows that I saw during my university days was Beat Happening and Girl Trouble. All of us were a long way from home in Washington when I saw them in New Jersey. While Beat Happening was playing what I thought was a pretty mesmerising show, my friend Tom leaned over to me and said “we could do that.” I looked at him for a long time, then said “but we don’t, do we?”
The point of both stories is that you need to act. It’s not enough to say “we could do that” if you don’t actually do it. The power is in the action, not in the idea.
Grab Bag: Constraints, Change & Networks
Posted by Tim in connect, innovation on 2 August 2010
Three posts jumped out at me today, so I thought I’d share them with you and add some thoughts:
- First, John Borthwick wrote a fascinating and thoughtful review of the iPad. He says that the native applications that will make it a genuinely unique device haven’t emerged yet, but that when they do, they will be the ones that take advantage of gesture. I think he’s right. He also had this to say about some of his favourite apps to date:
In the early days I was fascinated by camera A and camera B application — it lets you use your iPhone camera on your iPad, over WIFI. It’s one of those wow app’s — you show it to people and you can see their eyes open as they think of the possibilities this opens up. I think the possibility set that it opens up relate to the device as an extension of other connected devices. There (are) a small handful of other applications I found that have done interesting things integrating iPads with other devices — ie: Scrabble, iBrainstorm and Airturn. Airturn is brilliant in it’s simplicity and well defined use – using a Bluetooth foot pedal to turn the iPad into a sheet music reader. Apple might well have not put a camera on v1 of the iPad for commercial reasons (ie upgrade path) but the business restriction has opened up an opportunity.
CameraA/B is a good example of how those design choices are driving innovation. One of the first pictures I did was a requisite recursive image.
This reinforces my idea that constraints drive innovation. Limitations focus our attention, and since we are idea-generating machines, they help us find ways to work around them creatively. If you are trying to innovate, embrace constraints.
- Seth Godin wrote an excellent post with 26 words from A to Z that he has either invented or redefined. It is actually a pretty good summary of the major themes in his work over the past decade or so, with a lot of links that reward further exploration. I was particularly struck by his word for Z:
Z is for Zoometry: Originally a term from zoology (pronounced zo-ology, in case you were curious), zoometry is the science of instigating and learning from change. This is the revolution of our time, the biggest one in history, and it’s not just about silly videos on Youtube. One by one, industry by industry, the world is being remade again and again, and the agents of change are the winners.
This both explains why innovation is critically important (there’s a pretty high chance that your industry is being remade too), and it outlines an essential skill in the modern economy – initiating and adapting to change.
If we’re innovators, we must build our zoometry skills.
- Finally, Mark Earls asks then answers the question What Are Social Networks For? His answer:
Social networks are not channels for advertisers or for the adverts/memes you, your clients or any of your so-called “influentials” create, social networks are for all of the people who participate in the network.
Social networks are not best understood as channels down which folk send things; social networks are webs from which members pull down learning (from each other).
Now how does that change what you’re trying to do?
I think he’s right about the nature of social networks, and I think that the question he asks at the end is critical. It’s a waste of time to build things designed to ‘go viral’, because it’s not something that we control.
Build things (and ideas) that people can use, and if you’re lucky, they’ll share them with their friends. That’s the way the network economy works.
Innovate What You Know? part 2
Posted by Tim in innovation strategy on 1 August 2010
Here’s an actual conversation I had a few years ago with a programmer for whom I was doing some work:
Tim: I did some usability testing on your website.
Tim’s Friend: Great!
Tim: There are some problems though – it renders poorly on Netscape and looks like garbage on a Mac.
Tim’s Friend: I don’t care – anyone that isn’t using Internet Explorer on a PC isn’t serious, so we don’t need to worry about them.
This is the flip side of my last post talking about innovating by solving your own problems – sometimes, your own problems are fairly unique.
The situation back then was that my friend was a brilliant programmer. He had written a nice piece of database software taht was meant to manage inventory for his company. Once it was done, he and the owner of the firm decided that it would be a good program to sell to web developers that needed to integrate websites with databases. In particular, it seemed like it had potential for people making e-commerce sites.
The problem was that the software was very good at solving their initial problem, but it was no good for solving any other peoples’ problems. The issue with cross-platform compatibility was just the tip of the iceberg. After that conversation, I didn’t even dare mention linux, and one of the problems with the software was that while it did a few extra things, it was essentially the same as php. But they wanted to charge over $10,000 for it.
There were other problems too. It didn’t really have a user interface at all – the presumption again was that only programmers would be using it, and they’ll know what they’re doing, so why waste time on usability?
Also, the program required its own server, so if you were using it to build sites, they had to be installed on machines with the server installed. Again, not user friendly.
To recap: my friend had built a really nice program with very poor usability that only worked on one platform, and wanted to sell it for $10k more than the really nice free program that did basically the same job, while working on multiple platforms with a pretty nice user interface.
This venture was unsuccessful.
It’s pretty easy to say in hindsight that my friend should have been more aware of what was out there. But this is one of the difficulties with solving your own problem when you innovate – it’s often very hard to keep track of these things.
This is why I am cautious about the “scratch your own itch” approach to innovation. Solving your problems has many advantages, but I think that this approach must be combined with a reasonably good knowledge of what others might need themselves.
The best approach is to use empathy to drive innovation in solving a problem that you care about as well. The focus you get from solving your own problem is important, but so the ideas you generate through having empathy with the needs of others is just as critical.
-
You are currently browsing the archives for August, 2010
Metrics
Tim was named #5 in the Top 40 Innovation Bloggers in 2011 at Innovation Excellence.
Tim and John were both named in the Top 40 Innovation Bloggers in 2010 at Innovation Excellence.
Forex Robot
