Innovation Stories: Internet Research, Wooden Engines & The Gap

Three stories that caught my eye today:

First up, Stowe Boyd found this quote about competing with internet research firms Gartner and Forrester:

In our view, firms wishing to disrupt the Gartner and Forrester models must have two particular attributes. First, they need a significant differentiator. It can be in specialization, the business model, service delivery or other areas. Equally importantly, they must be able to scale. That means substantial funding, an effective sales operation, well-honed M&A skills, or a combination of all three.

He then expands on this by explaining his specialization strategy:

I think the key factor in microadvisory firms will be narrow focus. In my case, for example, I exclusively focus on social technologies, and as a result I can remain deeply aware of what’s happening in that (growing) niche. Others will track mobile, or enterprise software, or CRM.

This allows a different sort of scale — not breadth but depth.

As I said a few years ago, ‘I am giving up on balance, I am going for depth instead.’

I think that this is exactly the right approach to take. Instead of trying to be as comprehensive as the big players in the market, you can actually make up ground by going deep. This is another example of ignoring your weaknesses while building on your strengths. Of course, your weak areas still need to meet the minimum baseline, but once you’re over that line, it makes a lot of strength to put resources into areas where you’re already ahead.

The second thing that caught my eye is this:

That’s exactly what it looks like – a full-size replica of a Ferrari engine, made out of wood. It’s innovative, but I’m not quite sure where the market is for it. On the other hand, whatever the target market is, I’m not in it, so maybe I’m underestimating it’s size.

I’ve talked before about innovative craft-based business models, but I was thinking more along the lines of something like Saddleback Leather Co. On the other hand, this is clearly a unique model, or a labour of love, or both…

You can afford to be that iconoclastic if you are making a one-off item that only has to find one person that thinks it’s cool. It’s quite another to be so removed from the market if you are aiming squarely at the middle. The Gap is doing precisely that, which is what makes the flap over their new logo so gobsmacking. I like this take from Peter Lloyd at IdeaConnection:

In our marketing democracy, all top-down leaders eventually face the fate of national crowned heads, sovereigns, and tyrants. And most of them do it to themselves. Right after they lose touch with the source of their power, their consumers. Then, like Gap North America President Marka Hansen, they’re forced to tap dance backwards:

“Now, given the passionate outpouring from customers that followed, we’ve decided to engage in the dialogue, take their feedback on board and work together as we move ahead and evolve to the next phase of Gap.”

Like Lloyd, I am astonished that the idea of talking to customers only occurred to them after all this happened. That’s also why aiming for the middle stifles innovation – the middle doesn’t like change.

Innovators need to aim for the extremes, either the cutting edge, or the laggards. Which takes me back to the Stowe Boyd post. Extreme specialisation is one good way to do this. Going deep ensures that we are in touch with our customers, making it much easier to be innovative.

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

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7 thoughts on “Innovation Stories: Internet Research, Wooden Engines & The Gap

  1. So, if she weighs as much as a duck, and the duck weighs as much as this Ferrari engine, it means she’s made of wood, which means… wait. What?

    Going for depth (going deep) is a good idea. It fosters an understanding of core theories and principles driving something, allowing for measured change which complements the original, resulting in synergy. Ooh! Looky! Buzzwords with real meaning!

    What really stood out to me about this post was, admittedly, the wooden V12. As a gearhead, automotive bits are irresistible, but the last two paragraphs really hit the mark.

    If we’re all so familiar with hindsight, why don’t we work harder at learning from it and trying to be more proactive moving forward?

    And aiming anywhere but the middle is simply bril, sir. I’m writing that one down. Right now.

    Cheers.

  2. I’m curious to hear what you think of the wooden V12 Brian, since you’re probably more appreciative of such things than I am! I thought it was cool, which is why I put it in, even though I couldn’t really work out what to say about it…

  3. There’s another specialization advantage you didn’t touch on here…you turn potential competitors into symbiotic allies. In the test-prep field that I’m in, I see people who have success in one area (say SAT prep) try to branch out into college counseling. Well the college counselors who used to give you referrals won’t anymore, because now you’re the competition. Furthermore, building the depth of knowledge and skill necessary in a wide variety of areas (and keeping up on new developments) becomes increasingly difficult. Now, maybe this is the craftsman in me rather than the fast-scaling entrepreneur, but that’s my take…

  4. I think that’s a great point Peter!

    As you know, I’ve always been really interested in your business – I think it is a craftsman approach rather than one that scales. And as you point out, there are some real advantages to taking that angle. Thanks for the comment!

  5. I love that term: “microadvisory”! And there are certainly tradeoffs among breadth, depth and accuracy.

    As I noted in my book review of Empowered, by Forrester Research analysts Josh Bernoff and Ted Schadler, the broad range of case studies and analysis offered by the authors is informative, engaging and empowering. However, the large-scale Forrester study they draw upon to substantiate and/or elaborate some of their insights is based on questionable data (self-reports of self-assessed influence from a biased sample), and ultimately undermines their arguments (in my judgment).

    And I don’t remember wooden replicas of engines being among the case studies :)

  6. The Forrester research doesn’t always ring true to me, though I haven’t dug into to their methodology to see why. But I had the same issue with Groundswell by Bernoff and Charlene Li.

    I don’t know if wooden engine replicas will ever make it into a book as a case study, although I might have to file that idea away to maybe use myself at some point! :-)

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