A couple of months ago I was discussing models that help to think about focusing innovation efforts with Hutch Carpenter.  I said I would post one that I use, and Ooops!  I forgot to do that.  So here's a model that I often use when discussing the type of innovation capability a client wants to build.  My working definition of innovation is "doing something new that adds value to the business."  It's not just about making new products or technology.  For that reason, the people, processes and skills necessary to innovate can vary greatly, and we need to be very clear about what is necessary for each specific situation.

This model is based on two points that drive the approach to the innovation effort.  First, the degree to which the lines in each box are orderly or chaotic represents how well the end solution can be defined before the project starts.  Second, success criteria is determined differently at each innovation dimension. Let's look at how they differ.

Dimension 1 - I call this Innovation for Optimization.  The product or service that the company develops will stay the same, and innovation will focus on new ways to manufacture and deliver the offering to the market.  New technologies, processes, and organizational structures may be introduced.  Clear benchmarks for success exist, and the results can be tangibly measured with existing metrics.  The consumer will not notice a difference in the product or service, but may share in the benefits of the innovation through cost savings and ease of access to the product or service.  An example would be a new manufacturing technology that reduces production costs by 50%.

Dimension 2 - I call this Innovation for Improvement.  The goal is to improve the existing offerings themselves.  It may be that the product becomes easier to use, or new technologies will enable enhanced functionality.  In this dimension, success criteria may not exist already, and can be derived by learning directly from the market. It may involve learning what pain points the consumer has with existing products, or uncovering new uses that an upgrade can deliver.  An example would be the addition of calcium to an orange juice product.

Dimension 3 - I call this Innovation for Invention.  The goal is to develop new products and services that will provide the same benefits as existing options, but in new and better ways.  In this dimension, success criteria for the specific product attributes does not exist, and consumers may not be able to articulate the potential solutions. However, the benefits are well recognized. An example would be new products that increase the ease of eating yogurt on the go.  A yogurt company may develop new technologies or formulations to enable drinkable yogurt or yogurt in a tube. New internal benchmarks for manufacturing and cost structures may need to be created, as the company is making different products.

Dimension 4 - I call this Innovation for Disruption.  The result of this type of innovation is that it fundamentally changes the competitive landscape.  Very often - but not always, this type of innovation focuses more on changing existing business models than on changing the products themselves.  We can see this type of innovation playing out in the publishing and other media industries, as existing business models are becoming irrelevant.  New products and technologies play a part, but they are enablers that allow consumers to access media more easily and inexpensively than ever before.  The sources of power are shifting in the market, and existing benchmarks become irrelevant. Consumer research is very important here, but as a source of information about what is valued, not as a source of solutions as in dimension 2.

Since my work involves ensuring that new offerings are relevant to the market, the focus is from the perspective of how the consumer (or other end-user) will perceive the differences.  It also sets the stage for how directly the consumer can give input to what the end result will be, and guides the type of work we need to do.  From my experience, most companies are very good at Optimization, and they can often stretch to create innovative improvements.  This work can be handled in existing development processes.  In future posts, I will describe the fundamental difference in the work necessary to innovate in the 3rd and 4th dimensions, as this is where the existing development processes typically break down.

We hear a lot about the need to break down silos, to look outside of the usual venues for innovative ideas, and to embrace new points of view. In this day and age, we have access to more information from more sources than ever before. At first glance, it would seem that the task of collecting different ideas and points of view would be easier than ever.

Unfortunately it doesn't always play out that way. Because there is so much information out there, the new challenge is in filtering out what is relevant from what is not, and this task is as daunting as finding new information used to be. Think about this the next time you search for information. How are you determining the relevance?  What are your filters? I do believe that people need filters to help them to cut through all the daunting information out there.  However, what I'm finding is that it is now the filters that are limiting the diversity of the ideas and points of view, rather than the desire to seek out what is new.

Filters are useful to the extent that they are used to focus the mind to recognize relevant information. But how often do you notice when people are using irrelevant filters? For example, if a certain author or expert provided useful information in the past, their point of view may be less likely to be questioned in the future. It becomes a shortcut that is intended to save time, but can result in blind following and group think. As I've said before, there is no excuse for not thinking about what you are doing. Especially in the realm of innovation, every problem is unique and a new filter must be created for every query for new information. This doesn't need to take a lot of time, but it does require that you stop and think before blindly accepting or dismissing new information or sources.

What filters are you using as you make decisions about new ideas or points of view? If you ask yourself if they are relevant to your current task at hand, you may be surprised at your answer.

Last night I attended a panel discussion on Smart Medical Devices, put on by the Biomedical Engineering Society.  There was a lot of discussion about the definition of Smart Devices, new technologies (which were very impressive), and ultimately the discussion found its way to pointing out the need for biomedical engineers to act as translators between the engineering and medical communities.

Sound familiar?  This is exactly the type of discussion that goes on in design thinking circles. Just as it's important for designers to understand human needs to design better products, the same is true for designers and engineers who need to understand clinical needs to develop better products and to guide technology development.  What I truly appreciated was the engineers' description of translation.  This is much less confusing than the thought process of a specific discipline.

This should not be surprising. What struck me, however, was the fact that this capability was discussed as something that was necessary, but the problem was in finding engineers who were interested in spending time in the field.  It was suggested that typical engineers would rather develop cool new technologies, and weren't as interested in solving problems in a low-tech way.

In my work, I have never encountered a designer, engineer, or marketing person who was unhappy that I was able to identify the problem that needed to be solved, and present it as criteria that was relevant to them.  However, I have often found that most designers, engineers, and marketing people who work in development processes are much more interested in solving problems than in identifying them.  My main takeaway from this event is that there is a burgeoning frustration with people trying to solve their way to problem identification.  It just doesn't work. 

As I've discussed in many previous posts, problem-solving and problem-posing are very different activities and require different skills.  It's unrealistic to expect a doctor to define the engineering challenge, just as it is to expect the consumer to define your new product breakthrough.  Problem-posers have developed the skill to discern the motivation behind what is said, regardless of what market you are in.  Last night's discussion was yet another highlight of the same issue.

I received an email from a regular reader of this blog asking the following question:

I need to think about an interesting topic to do a 10 min presentation to my Global Consumer Insights Vicepresident. If you were him, what would you like to hear about from a CI manager of a WW consumer goods company?

Here are a few thoughts from conversations I've had with clients recently:

Remember that the consumer is a source of information, not answers.

Think about what you really mean when you talk about statistical significance.

Insights are derived, not observed.

Innovation is not random.  There is a way to identify and evaluate the market relevance of opportunities before investing in development.

When taking the time to derive a consumer's motivations, remember that the most valuable result of the work is to pose the right (ie: market relevant) problem for the organization to solve.  Don't shortcut this work and jump into problem-solving mode before you know whether or not you're solving the right one!

I'm sure others could add to this list, and I would love to know what you think.

This weekend I read a fascinating article by Columbia professor Dr. Robert Jervis in the Boston Globe.  He wrote about the way our brains make connections, how these connections inform our decisions, and how this process could have contributed to the incorrect decisions the CIA has made when drawing conclusions about terrorist threats.  He made two points that were of particular interest to me.

The first point is his assertion that humans are very good at recognizing patterns and making connections that are relevant to our world view.  In the work I've been doing, I would call this a linear connection.  The second point is that once humans reach a conclusion, they are not very good at questioning their initial assumptions.  They tend to disregard or manipulate data that could call their conclusions into question. (I'm sure we've all had frustrating experiences with this human trait.)

After reading the article, I was struck by the similarities between the problems the CIA is experienceing, and th eproblems many companies have when trying to innovate.  And as is often the case with companies it became clear that, while I'm sure the CIA has plenty of good problem solvers among their ranks, I would bet they are lacking people with good problem-posing skills.  Successful innovators are very good at questioning assumptions, making non-linear, synesthesia-like connections, and posing new problems.  These people are more open to finding the path that reconciles the data they have, rather than paying attention only to the data that reconciles the path they have chosen.  Sound familiar?

All of this then made me question one of my own assumptions.  I believe that people who can make relevant (as opposed to random) connections between seemingly disparate ideas have a heightened ability to make cognitive connections.  I have imagined this very physically, as a brain with more physical connections being made. But is it really this way?  Maybe these people lack the ability to make the well worn connections that others make, resulting in the need to make new connections more often.  Or maybe it's not physical at all.  Is it due to a difference in the way we perceive information, or a tendency to suspend judgment until all data is reconciled?

I don't have an answer as to why this happens, but as I work to build models to objectively select people with good problem posing abilities I'm realizing that the need to identify and nurture their skills is broader than I had anticipated.

Of course your company isn't running a casino on purpose. But is it running one accidentally? You can tell based on its approach to innovation investment.

Does your company solicit new ideas for products and technologies in a more random fashion, investing in those that either can be executed with current resources, or do not pose much risk to the status quo?  Do people know the success criteria for a breakthrough idea?  In other words, is there a way to tell if a new offering with no current benchmarks is likely to succeed?  Usually the answer is no.

Does this sound familiar?  If it does, then your company probably casts a wide net in terms of investing in innovation.  Since most ideas are likely to fail, it's better to invest in more, and more varied, options to hedge your bets.  Notice I said bets, because that's exactly what the organization is doing.  The innovation process is essentially providing a mechanism to place bets knowing that most will lose, and hoping that the one(s) that succeed will cover the losses.  Isn't that what happens in a casino?  It provides a place for people to come and place many bets, hoping that a few wins will cover the losses.

On the other hand, does your company understand its market, define new opportunities to better meet the market's needs, and develop technologies that enable new products and services to satisfy those opportunities?  This may not be nearly as sexy an option at first glance, however it does provide a way to tell if radical new ideas have a chance of succeeding before investin in their development.  The chance of failure in developing something truly new and different is greatly mitigated. This is the difference between investing and betting.

In a real casino, the house always wins when most bets are lost.  In a real company, the only way the house always wins is to ensure success.  So why are most companies pursuing the casino model?

It's funny how the planets sometimes align around a topic.  This week it's the chicken and the egg question regarding technology and consumer research. 

It all started last week when I was talking with a friend from a local technology start-up about the need to understand consumer (or other end-user in B2B situations) motivations in order to ensure the relevance of new product offerings.  Then today I saw two interesting posts that essentially dance around the same question; when developing breakthrough innovation, which comes first?  The first post is from Don Norman, and suggests that historically breakthrough innovations begin with technology, and that what he's calling design research to uncover unmet needs is only useful in developing incremental improvements.  The second post is from Roy Luebke and is a response to Norman's post, suggesting that design (observational) research can point to all types of innovations.

What was interesting was that I was able to agree and disagree with both of them, based on a) how narrowly or broadly consumer research is defined, and b) the expectations for what either research or technology will deliver.  Let's look at both.

First, Norman describes the tasks of design research, and points to the fact that pure technological invention was what drove the creation of many inventions from the airplane to text messaging.  And I would say that taken literally, he is correct.  If you've been reading this blog for a while, you know that I view contextual research as a source of information, not answers.  (I use the term contextual research because it does not focus the outcomes too narrowly.) And consumers could never be expected to come up with such breakthrough inventions as the ones he describes.  When viewing contextual research as a source for answers, the most you can expect is a good list of improvements to existing products.

Second, Norman then points out that it is technological invention that is the source of breakthrough innovation.  Again, he is right in that the inventions he described would not be possible without new technology.  However, they would not be successful if they didn't satisfy a consumer motivation.  In reality, consumers rarely change their behavior to accomodate technology.  They adopt when the technology is put into a form that seamlessly fits into their lives.  All of the inventions on Norman's list enable consumers to do something they already wanted to do (travel, communicate, etc), but in a better, faster, less expensive, etc way. Knowing the motivation ahead of time can save a lot of time and money, as well as help a company to define what business they are really in.

In that sense, Norman's post appears to be based on the idea that the consumer will give you the answer, and that after the technology is developed product success is hit or miss.  I would have to disagree with both of those assumptions.

On the other hand, Luebke acknowledges that learning from consumers can point to many different types of innovation.  That is true, but he doesn't comment on the fact that contextual research should be tailored to collecting the information that will inform the decision that needs to be made.  For example, a consumer can be asked directly to evaluate current product features.  Understanding their motivations, however, is what is necessary to guide the development of new products and services they would never think to ask for.  This is the type of constraint inventors typically love to solve with new technology.  This is how learning from consumers can drive technology development - it provides a purpose, not a directive.  This is where research and invention come together.

Ultimately it doesn't matter whether we are starting with a technology or a market segment.  Technology can certainly enable the creation of totally new products and services.  But these new products and services will not succeed unless they satisfy the market's motivations better than existing alternatives.

I was thinking about the value of intangibles and the "knowing where to tap" story came to mind.  If you don't know it, it goes something like this:

A jet engine manufacturer was experiencing failures in one of their large turbine engines.  After trying everything they called in an expert turbine engineer to consult on the problem.  After studying the situation for a few minutes, the engineer asked for someone to bring him a ladder and a hammer.  He then positioned the ladder up against a section of the turbine, climbed to the top, and tapped the turbine several times with the hammer.  He then instructed them to turn on the turbine, and it ran smoothly.

A week later, the manufacturer received the invoice for the work, and was shocked that the total came to $5000.  He called the engineer and asked if he could break down the costs, as $5000 seemed like a large amount of money to pay for a task as simple as climbing a ladder and tapping with a hammer.

Another week later, the manufacturer received a new invoice.  It said, "For observing the situation, climbing the ladder, and tapping with the hammer  - $5.  For knowing where to tap - $4995.  The manufacturer then got the point, and paid the invoice immediately.

What is valued at your organization?  Does it reward the real value regardless of whether it is tangible or intangible?  The same can be asked of your consumers.  Do you know what they truly value?  Are your products and services representative of that value?

Yesterday I was referred to a blog post written by Danah Boyd, an academic researcher at Microsoft and Harvard.  Her work focuses on the impacts of the internet and social networks on society.  She wrote about a horrible experience she had while presenting at the Web2.0 Expo.  The post is long but worth reading.  While Danah did take responsibililty for content or delivery problems with the talk, there were several lessons to be learned by those of us whose job it is to create thoughtful, intentional experiences.

First, Danah mentioned minor issues such as the fact that she was not allowed to have a laptop from with to present.  She then went on to describe that the podium she had to use was flat, which enabled the audience to see that she might be reading from notes.  This was exacerbated by the fact that the lights were so bright, she could not see anyone in the audience, making it hard to connect and establish a rapport with them.  And the final kicker, there was a running twitter stream that was displayed behind her, so that she could not see it, but the audience could.

What this created was an open invitation for the audience to carry on a conversation about the talk as it was happening. Not only was it distracting from the talk, it was happening literally behind the speaker's back.  This behavior is rude enough to begin with, and sadly, this audience devolved to the point of making rude comments and juvenile wisecracks.  It was like a bratty kid looking for attention in public.

New technology allows us to do many things we couldn't do before.  But the freedom to do these things comes with the responsibility to use the tools wisely.  I'm sure someone thought it was 'cool' to display a live twitter feed about the talk.  If handled responsibly and with a little more forethought, it could have served to engage the audience and allow Danah to better connect with them by seeing where their interests and energy were going.  Critical thought, active listening, and discussions that challenge existing ideas respectfully all help us to move further faster.  New technology can facilitate that type of interaction better than ever before.  However, when something like this happens people tend to shy away from the technology itself, which could actually set us all back.  It would be much better to stop and think about the experiences we want to create, and question whether what we are doing will actually help us to deliver them.

As you develop products and services at your company, how much thought is given to the actual experience a consumer will have when trying to learn about, purchase, and use your offering?  When developing a new technology, or launching a new product, are there unintended consequences that could result in the actual experience of use?  Obvoiusly there are no right answers to these questions, but it is important that someone is asking them.  Are they being asked at your company?

Last year, I wrote a post about Design Thinking in response to an article in Brandweek that I felt was misleading on the topic. In it, I pointed to Roger Martin's work as some of the very best at describing what Design Thinking actually means. Last week I got into a Twitter discussion with Steve Finikiotis after he pointed me to a Harvard Business Ideacast featuring Roger and his ideas on Design Thinking.  I agree with Roger's views, however I have noticed some unintended consequences as the terms are put into practice. I boiled down these issues to three main points that I would like to discuss.  

First, I philosophically agree with Roger regarding the need for contextual research, abductive reasoning, and problem posing.  However, what I find in practice is that the term Design Thinking can be potentially problematic in its interpretation. This is because design is a functional discipline in most organizations, just like marketing, engineering, or finance. Most design education focuses on teaching the fundamentals of honing the craft and developing tangible design skills.  The work Roger describes of creating plausible hypotheses and solutions based on contextual research is often done by people who do not have traditional design backgrounds.  As a result, I have seen the term create some organizational confusion regarding work that I have found to be discipline agnostic. 

My second point is related to the first. Roger talks about how designers and business people need each other in a way that should break down silos to allow the necessary connections between their disciplines to be made. Again, I agree wholeheartedly, yet in practice, the term Design Thinking can cause the unintended consequence within an organization to segregate, rather then integrate the disciplines.  Richard Farson, a psychologist who has written quite a bit about design, discusses the need to focus on the "meta" level of all functional disciplines as a way to rise above the executional level within a functional discipline and frame the common problem at hand. When I've presented the "meta" idea to client organizations, it tends to help to philosophically integrate the disciplines within a team, and resolve the terminology issue.  It is something to think about.

Finally, Roger very eloquently speaks of the need to integrate creative and analytical thought. (see abductive and adductive reasoning) Amen to that! However, I find the integration of these two types of reasoning to get us part of the way there, but in order to accurately connect seemingly unrelated concepts we need a different type of cognitive skill.  For example, we certainly need to integrate creative and analytical reasoning to hypothesize a consumer's motivation behind what they say, and to develop new solutions to satisfy those motivations.  However, the ability to accurately translate from a specific plausible hypothesis to a related plausible solution appears to be a different type of cognitive skill that is employed in addition to the integration of the types of reasoning. In the work I've been doing, we're just beginning to scratch the surface of what that is. When I have something concrete, I'll be sure to share it.

I'll end by saying that I'm certainly not intending to criticize Roger Martin's work. On the contrary, from what I've seen he has done a better job than anyone in terms of creating awareness of the need to integrate creative and analytical thought processes and solutions. For that, he has earned my heartfelt gratitude. However, we cannot expect him to do everything alone, or to have every answer.  It is our responsibility as practitioners to raise the issue when we sense inconsistency between theory and practice, and continue to work together to hone these concepts.