ShiftPerspectives #2 - Special Edition

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FUTURELAB

SHIFT PERSPECTIVES

FOREWORD BY ALAIN THYS, FUTURELAB

Innovation and creativity are probably two of the least effective processes in any company. After all, 80-90% of innovations fail to achieve their stated objectives. And those are only the ones we know about. But at the same time, we know that to survive and grow, businesses need to continuously identify new market opportunities and differentiate themselves from the competition. In other words, they need to be creative. Innovate. So how do you do this without burning 80-90% of your money, customers and the motivation of your people in the process? Well, you can start by reading some of the articles in the issue of #ShiftPerspectives which once again has brought together some quite interesting views from thought leaders around the world. Then you can do something truly remarkable. You can act upon this knowledge, instead of just continuing to do what you’ve always done. Because that is, in the end, the real reason why innovations fail. We know we should listen to customers and build propositions based on insights, yet we prefer to work on the ideas we consider cool ourselves. We know we should stay pure to the original design intention, yet we keep watering it down because of competitive price-points. And we know we should think about new business models and experiences, yet we still do just another product. So here’s my challenge to you. Stop talking about real innovation, creativity and all the wonderful things we should be doing, and just do them. If you want to be “the next Apple” then break the mould and make sure that 80%-90% of your products are successes rather than failures. You’ll have more fun, make more money and may actually do something meaningful for your customers and the world at large. Happy innovating!

AUGUST ISSUE

SHIFT PERSPECTIVES

FUTURELAB

introducing our new website A new concept - a business think tank. You will be able to post your own ideas, thoughts & opinions on set topics and interact with other users. You will be able to download or read the quarterly emag online, and find all the issues in one place. You will find interesting views and comments from our authors, as well as lead posts for the Shift ThinkTank discussion topics

www.shiftperspectives.net AUGUST ISSUE

SHIFT PERSPECTIVES

FUTURELAB Langdon Morris HOW TO CREATE A WINNING BUSINESS MODEL Paul Williams YOU MAY BE WRECKING YOUR OWN INNOVATION Seth Godin HOW TO BE A GREAT CLIENT TOP WAYS TO DEFEND THE STATUS QUO CREATIVITY Johnathan Salem Baskin WHAT COMES AFTER INNOVATION Mitch Joel CTR-ALT-DEL - IT’S TIME FOR A BUSINESS REBOOT Chris Lawer AVOID THE RISKS OF USING CUSTOMER INPUT FOR INNOVATION DEVELOPING A CONCISE DEFINITION OF CO-CREATION Idris Mootee WHAT IS WHITE SPACE MAPPING? Gerald Nanninga STRATEGIC PLANNING ANALOGY #314: ONE STRATEGY Scott Anthony THE DANGER OF PART-TIME BUSINESS BUILDERS David Polinchock THE BLIND MEN AND THE ELEPHANT Mike Brown STRATEGIC PLANNING DOESN’T HAVE TO KILL CREATIVITY David Armano ADVERTISING: INNOVATE OR DIE. VOL.1

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SHIFT PERSPECTIVES

FUTURELAB Langdon Morris is a partner of InnovationLabs and an affiliate of WDHB Consulting Group. He is recognized around the world as an expert in innovation. Recent clients include: NASA, American Heart Association, SAP, Gemalto, the Federal Reserve Bank of the US, France Telecom, Stanford University Medical Center, the University of Minnesota Medical School, Cap Gemini, DuPont, Wipro, L’Oreal, Accor Hotels, and many others. He is author or co-author of six acclaimed books, and he has also written numerous white papers. He is also Senior Practice Scholar of the Ackoff Center at the University of Pennsylvania where he is researching complex social and business systems (www. acasa.upenn.edu/); a Senior Fellow of the Economic Opportunities Program of the Aspen Institute (www.aspenscale.org); a member of the Scientific Committee of Business Digest, Paris (www.business-digest.fr/english/index. html); and a member of the leadership council of the Aerospace Technology Working Group (www.atwg.org). He gives speeches and workshops on innovation around the world, and he has taught MBA courses in strategy at the Ecole Nationale des Ponts et ChaussĂŠes in Paris and Universidad de Belgrano in Buenos Aires. www.innovationlabs.com Original Post

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How to Create a Winning Business Model

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s a critical source of competitive advantage, innovation certainly deserves the attention it receives. But innovation is also notoriously difficult to manage. And while recognized innovators are widely admired for their achievements, every business leader knows that the pursuit of innovation is exceptionally challenging even as it is entirely necessary.

LANGDON MORRIS But business model innovation is also widely misunderstood, and consequently few organizations are reaping the significant benefits that can come from doing it well. We’ve been thinking about this for some time, and working to understand why business model innovation may be important for every company. We’re also working on a systematic program to organizations develop breakthrough business models of their own.

The roots of the problem lie in the fact that innovation takes place at the crossroads of two critical uncertainties: uncertainty about Four Types of Innovation the future, and uncertainty about what will be best for our organization. Organizations typically must allocate their innovation investments among four types Given these issues, executives face two key of innovation: incremental, breakthrough, questions: new venture, and business model. (This is spelled out in considerable detail in PermaFirst, What innovations should our organi- nent Innovation.) zation be pursuing? ’ BVS ^c`^]aS ]T W\Q`S[S\bOZ W\\]dObW]\ Wa And second, How should we create them? to maintain market share. But it’s a maintenance strategy, and rarely confers much We respond by noting that among the four of an advantage. It’s necessary, to be sure, types of innovation that any firm could pur- but by no means is it sufficient to support sue (more detail on this below), business growth. model innovation should be highly attractive and pursued aggressively. Why? Be- ’ BVS aSO`QV T]` P`SOYbV`]cUVa ]TTS`a O cause business model innovators are earn- shot at stardom, but as they are quite rare, ing very attractive returns on capital, and pursuing breakthroughs is a properly recfinding new market opportunities that oth- ognized to be a high risk approach ers have overlooked. ’’ ’

SHIFT PERSPECTIVES

FUTURELAB AcQQSaaTcZ \Se dS\bc`Sa QO\ ^]aWbW]\ O Q][^O\g T]` bVS dS`g Z]\U bS`[ Pcb bVSg O`S OZa] VWUV `WaY QO^WbOZ W\bS\aWdS O\R T]` U]]R `SOa]\a bVSg O`S `O`SZg ObbS[^bSR 7\ b]ROg¸a PcaW\Saa S\dW`]\[S\b bVWa ZSOdSa bVS T]c`bV ]^bW]\ Oa bVS []ab Obb`OQbWdS( PcaW\Saa []RSZ W\\]dObW]\ QO\ PS \]b ]\Zg bVS []ab Q]ab STTSQbWdS T]`[ ]T W\\]dObW]\ Pcb T]` []ab TW`[a Wb¸a OZa] bVS []ab ^`][WaW\U `]cbS b] acQQSaa @SQS\b `SaSO`QV Pg 70; VOa aV]e\ bVOb PcaW\Saa []RSZ W\\]dOb]`a O`S SO`\W\U bVS []ab Obb`OQbWdS `Sbc`\a ]\ W\\]dObW]\ W\dSab[S\b O\R OZa] OQVWSdW\U bVS PSab `ObSa ]T U`]ebV 7\ TOQb WT g]c Z]]Y Ob bVS []ab acQQSaaTcZ O\R OR[W`SR Q][^O\WSa ]T bVS ZOab beS\bg gSO`a g]c aSS bVOb []ab ]T bVS[ VOdS T]QcaSR ]\ RSdSZ]^W\U W\\]dObWdS PcaW\Saa []RSZa EVOb Q][^O\g e]cZR \]b eO\b b] PS W\QZcRSR ]\ bVWa ZWab ]T PcaW\Saa []RSZ W\\]dOb]`a( /[Oh]\ Q][ /^^ZS 1]abQ] 4SRSf 5]]UZS 7YSO A]cbVeSab /W`ZW\Sa AbO`PcQYa EOZ ;O`b O\R HO`O O`S ]T bVS e]`ZR¸a []ab acQQSaaTcZ Q][^O\WSa O\R PcaW\Saa []RSZ W\\]dObW]\ VOa PSS\ bVS YSg b] bVS acQQSaa ]T SOQV ]\S Defining Business Model Innovation 0cb eVOb SfOQbZg Wa O PcaW\Saa []RSZ/b Wba aW[^ZSab O PcaW\Saa []RSZ

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aW[^Zg RSaQ`WPSa V]e O Q][^O\g [OYSa []\Sg 7b¸a bVS ^`]RcQba O\R aS`dWQSa Wb ]TTS`a bVS eOg Wb RSZWdS`a bVS[ O\R bV`]cUV bVSaS SZS[S\ba Wb Wa bVS Sf^S`WS\QSa bVOb Wb Q`SObSa T]` Qcab][S`a 0caW\Saa []RSZ W\\]dOb]`a Xcab TW\R eOga b] Q`SObS PSbbS` Sf^S`WS\QSa T]` bVSW` Qcab][S`a O\R Oa O `SacZb ]T R]W\U a] bVS []ab acQQSaaTcZ O[]\U bVS[ SO`\ ^`]TWba bVOb ]bVS`a RWR \]b `SQ]U\WhS Oa SdS\ ^]aaWPZS 4]` SfO[^ZS( Google RWaQ]dS`SR V]e b] aSZZ e]`Ra Ob OcQbW]\ O \Se PcaW\Saa []RSZ bVOb b`O\aT]`[SR bVS Q][^O\g W\b] bVS e]`ZR¸a \c[PS` ]\S ORdS`bWaW\U OUS\Qg O\R a]]\ bVS`SOTbS` W\b] ]\S ]T Wba []ab OR[W`SR Q][^O\WSa Amazon.com RSdSZ]^SR O \Se PcaW\Saa []RSZ T]` aSZZW\U ^`]RcQba ]\ZW\S VOa `ORWQOZZg `SaVO^SR bVS P]]Y PcaW\Saa O\R Wa \]e e]`YW\U b] SfbS\R Wba []RSZ W\b] SdS`g [O`YSb Apple T]c\R O b`S[S\R]caZg acQQSaaTcZ eOg b] aSZZ a]\Ua bV`]cUV WBc\Sa ^S`[O\S\bZg `SaVO^W\U bVS [caWQ W\Rcab`g Fedex aSb c^ O agabS[ bVOb RSZWdS`a ^OQYOUSa T]` bS\ b] TWTbg bW[Sa []`S bVO\ bVS >]abOZ AS`dWQS QVO`USa Southwest Airlines aSZZa OW`^ZO\S bWQYSba T]` ZSaa bVO\ Wba Q][^SbWb]`a Pcb Wb VOa \SdS`bVSZSaa PSS\ bVS []ab Q]\aWabS\bZg ^`]TWbOPZS CA OW`ZW\S T]` be] RSQORSa Wal-Mart, Costco O\R Ikea, [SO\eVWZS RSdSZ]^SR UZ]POZ

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SHIFT PERSPECTIVES

FUTURELAB Paul Williams launched Idea Sandbox in the spring of 2005 driven by his passion to help others create remarkable ideas. Paul spent the first 15 years of his marketing career working with The Disney Company, ARAMARK Corporation, Starbucks Coffee Company. He had a few engagements in between, including marketing for a manufacturer of green, energy-efficient lighting in Florida called Harris Lighting. Consistent themes in each of Paul’s job roles have been: Â’ >OgW\U QO`STcZ ObbS\bW]\ b] customer details – not sacrificing the customer experience. Â’ 0cWZRW\U O\R [OW\bOW\W\U strong brand guardrails. “It’s okay to get big, but stay small (I call this jumboSHRIMP). I’ve merged the skills and lessons learned at these organizations to build a sandbox. An idea sandbox, created specifically‌ to help companies pay better attention to their customers, build their brand in a meaningful way, and to be be remarkable.â€? www.idea-sandbox.com Original Post AUGUST ISSUE

You may be wrecking your own innovation PAUL WILLIAMS

I

nnovative ideas – the kind that can transform your company – are inadvertently being demolished. When first presented, many ideas meet wrecking-ball comments such as‌

“How’s that going to work?�

Ninety-nine percent of innovative ideas aren’t simply blurted out in their final form. They need development to reveal their full potential. Instead of destruction, try construction. Use the idea as a foundation and see how tall we can build the framework. If we want to be as innovative as possible, instead of saying “Yeah, but‌â€? try “And, if‌â€?

“Good luck getting that done!â€? “We don’t have time for something like that.â€? And the classic, “Doesn’t work‌ Trust me‌ We tried that years ago.â€? We’ve all heard (or perhaps said) killer phrase comments like these. These are offered as a “public serviceâ€? to the team to prevent us from going off track and wasting time.

What’s the worst that could happen? We’ve wasted 120 seconds on a thought that, in the end, won’t work? But what’s the best that could happen? Perhaps we construct something that does solve the challenge. Even better, maybe it morphs into something completely different – something incredible!

As a bonus, we’ve made the suggester feel valued and perpetuate creative, open thinking – the stuff that leads to future innovative breakYes‌ we’ve kept the meeting on schedule. But we also, have made the suggester feel stu- throughs! pid, are causing people to hold back their cre- In these competitive times, when innovation is ativity, and may have destroyed the next big considered one of the single most important idea. factors to the continued success of a compaSpare the “Yeah but‌â€? wrecking ball, use Instead of immediately leveling them, what if ny‌ “And if‌â€? to construct your own innovation. we built on new ideas? But, what have we really accomplished?

Â’Â’ ! Â’

SHIFT PERSPECTIVES

FUTURELAB

Two-By-Two Diagram: Simplifying the Complex Some call it a matrix, others a two-by-two diagram. I call ‘em awesome.

Product Measurement Which products are profitable to which customers? PLOT: Product Profitability -and- Customer Type

Two-by-twos allow you to plot complex information in a matter that allows you not only to see the relationship between two things, but also to make better judgments and decisions. I often use these during brainstorming sessions with clients as a way to filter our stacks of great ideas to the fewer, bigger, and better solutions.

How to Use Them 1. Determine the two important qualities you want to use to measure or filter your ideas. For example‌ We want to better understand the relationship between employee sales and their customer service scores. This two-by-two would begin something like this‌

Customer Service Which aspects of our service needs to be worked on? PLOT: Degree of Importance to Customer -andSatisfaction Levels

We can see Julia ranks where we hope all of our employees would be‌ she is making high sales and earning a high customer service score. We can also use two-by-twos as a diagnostic tool to understand where adjustments are needed. Looking at the diagram, we can see that Winston needs help with customer service. O’Brien needs both sales and service help.

Television Ads Ranking Which commercials are connecting with customers? PLOT: How Memorable -and- Relevance Marketing Promotion Logistics Which marketing promotion is easiest to implement? PLOT: Ease of Implementation -and- Investment Innovation Gauge Let’s prioritize our innovative ideas. PLOT: Remarkability of Idea -and- Difficulty to Implement Two-by-twos are not only for the board room, try them at home‌ What dinner menu to prepare for your date Ease of Preparation -and- How Delicious Choosing a Daycare Compassion of Staff -and- Distance from the Office Inexpensive Sunny Vacation Destinations Cost of Travel to Get There -and- Number of Days with Sun

2. Next, I’ll plot where each team member according to both their sales and their service score.

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You can plot anything‌ other measures you may find helpful include‌

Two-by-twos are simple, effective, and versatile – they make it possible to plot nearly anything. Give them a try‌

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SHIFT PERSPECTIVES

FUTURELAB SETH GODIN is a bestselling author, entrepreneur and agent of change. Godin is author of ten books that have been bestsellers around the world. Seth is a renowned speaker as well. He was recently chosen as one of 21 Speakers for the Next Century by Successful Meetings and is consistently rated among the very best speakers by the audiences he addresses. Seth was founder and CEO of Yoyodyne, the industry's leading interactive direct marketing company, which Yahoo! acquired in late 1998. He holds an MBA from Stanford, and was called "the Ultimate Entrepreneur for the Information Age" by Business Week. http://sethgodin.typepad.com/ Origina Post

AUGUST ISSUE

How to be a great client

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s a client, your job isn’t to be innovative. Your job is to foster innovation. Big difference.

Fostering innovation is a discipline, a profession in fact. It involves making difficult choices and causing important things to get shipped out the door. Here are a few thoughts to get you started. Before engaging with the innovator, foster discipline among yourself and your team. Be honest about what success looks like and what your resources actually are.

SETH GODIN

After you write down the ground rules, revise them to eliminate constraints that are only on the list because they've always been on the list. Hire the right person. Don't ask a mason to paint your house. Part of your job is to find someone who is already in the sweet spot you're looking for, or someone who is eager and able to get there.

Cede all issues of irrelevant personal taste to the innovator. I don't care if you hate the curves on the new logo. Just because you write the check doesn't mean your personal aesthetic sense is relevant. Run interference. While innovation sometimes never arrives, more often it's there but someone in your office killed it.

Raise the bar. Over and over again, raise the bar. Impossible Demand thrashing early in the a week ago is not good enough. process. Force innovations and You want stuff that is impossidecisions to be made near the ble today, because as they say beginning of the project, not in at Yoyodyne, the future begins a crazy charrette at the end. tomorrow.

If you can't write down clear ground rules about which rules are firm and which can be broken on the path to a creative solution, how can you expect the innovator to figure it out?

Be honest about resources. While false resource constraints may help you once or twice, the people you're working with demand your respect, which includes telling them the truth.

Simplify the problem relentlessly, and be prepared to accept an elegant solution that satisfies the simplest problem you can describe.

Pay as much as you need to solve the problem, which might be more than you want to. If you pay less than that, you'll end up wasting all your money. Why would a great innovator work cheap?

When you find a faux innovator, run. Don't stick with someone who doesn't deserve the hard work you're doing to clear a path. Celebrate the innovator. Sure, you deserve a ton of credit. But you'll attract more innovators and do even better work next time if innovators understand how much they benefit from working with you.

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Top ways to defend the status quo 1. “That will never work.� 9. “Well, this might work for other people, but I think we’ll stick with what we’ve got.�

2. “... That said, the labor laws make it difficult for us to do a lot of the suggestions [you] put out. And we do live in a lawsuit ori- 10. “We’ll let someone else prove ented society.�� it works... it won’t take long to catch up.� 3. “Can you show me some research that demonstrates that 11. “Our team doesn’t have the this will work?� technical chops to do this.� 4. “Well, if you had some realworld experience, then you would understand.� 5. “I don’t think our customers will go for that, and without them we’d never be able to afford to try this.�

12. “Maybe in the next budget cycle.� 13. “We need to finish this initiative first.� 14. “It’s been done before.�

15. “It’s never been done before.� $ “It’s fantastic, but the salesforce won’t like it.� $ “We’ll get back to you on this.� 7. “The salesforce is willing to give it a try, but [major retailer] won’t 17. “We’re already doing it.� stock it.� All quotes actually overheard, or 8. “There are government regu- read on blogs/comments about lations and this won’t be permit- actual good ideas. ted.� AUGUST ISSUE

99%

SHIFT PERSPECTIVES

FUTURELAB

of the time, in my experience, the hard part about

creativity isn’t coming up with something no one has ever thought of before. The hard part is actually

executing the thing you’ve thought of. The devil doesn’t need an advocate. The brave need

supporters, not critics. Â’Â’ $ Â’

SHIFT PERSPECTIVES

FUTURELAB I’m Jonathan Salem Baskin, and I’ve worked for 27 years translating branding strategy into something more than images and words, leading marketing communications for worldleading brands and advising others. My experience taught me one, overwhelming truth: The best way to discover better answers consistently is to ask better questions relentlessly. I have dedicated my work and writing to this purpose, in the hopes of improving the delivery and experience of brand marketing for businesses and their consumers. http://dimbulb.typepad.com Origina Post

What Comes After Innovation?

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or all of you dim bulbers who are students of business fads and buzzwords, I think we’re about to witness one of the major turning points in our chosen field of dabble: “Innovation� is about to get replaced with something else. I don’t know what it is, or when it’ll happen, exactly. But I can just feel it. Can you? Innovation has had a great run, mostly because it’s so gloriously vague; in fact, it has a conflict inherent in its definition, as “to innovate� is to try to somehow update something that’s already established. That old/new thing is manna from heaven for a business fad because such dichotomies scream out for endless explanations, amplifications, and projects that require complicated gantt project management charts to describe what defies simple, declarative sentences. Companies have been challenged on innovation much the same way as comrades in the Soviet Union were dared to be patriots. It was never an end result that could be measured, but rather an aspirational ideal, pursued via an incessantly variable process that was never properly realized, or thereafter durable. Like party officials, a generation of management consultants and busi-

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JONATHAN SALEM BASKIN

ness school grads made a comfortable living lecturing companies on innovation and, like all really good buzzwords, companies incorporated it into their values, mission statements, messaging, and the other subtle strains of branding nonsense. A generation of middlemanagers had their job descriptions rewritten so they could focus on educating and monitoring their fellows on their innovation-ness. Only now, most of the those middle-managers have been let go; companies large and small are well along dismantling the Berlin Wall of Innovation -- separating the purity of business fad from the realities of the marketplace -- because, like their brethren in East Germany, they effectively awoke one morning to see that there was no there there. Lives aren’t better. Stuff doesn’t get sold more often, or more profitably, just like all those mock-heroic propaganda posters couldn’t distract a population from the unpleasant reality of their lives. What we’re left with are the empty concrete high-rises, and the drab mediocrity of balance sheets leaden with a has-been fad. Innovation was never a stand-alone philosophy, religion, or management approach, any more than globalization, outsourcing, or customer-centricity. It was simply the catchy patina of insight and poetry that smart marketers -- in aca-

demia, and in the services vendors who feed in the wake of its affirmation -- applied to the boringly constants and unsexy truths of business management. God forbid Harvard Business School or McKinsey admitted that the keys to effective competitive business strategy now were no different than they were 100 years ago; the details have changed, but that’s the stuff of vocational training. And there’s no serious money in that business. So as companies today are reevaluating the resources they commit to pursuing innovative purity, I’m sure the gurus are dreaming up the next fad and commensurate buzzword. My pick: collaboration. All the nonsense of social media -- from the technology, to the social and asyet incomprehensible economics -- seems just tailor-made for something far more than a marketing department experiment. Companies will get lectured on its importance above all else. Graduate courses will be taught, and expert consultants will create immense slides and charts on what it means. Perhaps the next generation of employees, though a smaller group, will get their lives committed to this higher ideal. Everyone will focus on enabling it the “right� way. Come to think of it, that’s innovation!

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SHIFT PERSPECTIVES

FUTURELAB M a r ke t i n g Magazine dubbed him the “Rock Star of Digital Marketing� and in 2006 he was named one of the most influential authorities on Blog Marketing in the world. Mitch Joel is President of Twist Image – an award-winning Digital Marketing and Communications agency. In 2008, Mitch was named Canada’s Most Influential Male in Social Media and one of the top 100 online marketers in the world. His first book, Six Pixels of Separation, named after his successful Blog and Podcast (www. twistimage.com/blog) will be published in the Fall 2009 on Grand Central Publishing – Hachette Book Group (formerly Time Warner Books). http://www.twistimage. com/blog Original Post

CTRL-ALT-DEL - It’s Time For a Business MITCH JOEL Reboot Maybe the Internet changed much more than we think? Maybe businesses have to reinvent not only themselves, but the entire industry they serve? Its very survival could depend on it. The truth of the matter is that the business world is changing. Not year by year, but moment by moment. Big business is being beat-up by two guys, a clever spin on a traditional industry, a rental lease on some garage space in Menlo Park and a couple of iPhones. What's a business to do? There's this great little story (no one knows how much of it true or how much of it is fiction, but here it goes): In the 1500s, Hernan Cortes was the captain of eleven ships with more than 500 soldiers headed for Mexico to conquer the Aztecs. After his ships arrived in Mexico, the sailors and soldiers were not in the best of shape. Some of them fell ill on the journey and some had lost their motivation. Several of Cortez's crewmates wondered what would happen to them in this strange new land. If they faced challenges or resistance, how would the crew return home? The crew asked Cortez what the plan would be to get back home. The captain had the perfect response: He burned the ships. There was no going back. The old ways of doing things were about to be rethought.

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In fact, there were no more "old ways of doing things"... a new way had to be defined. The story of Cortes and the burning of the ships ripples through to the present time. So much has changed in terms of what it means to be a business owner: the global economy, how we connect to our consumers, technology and new platforms, and the marketing and communications we create to connect more effectively with them. The new breed of entrepreneurs must burn the ships. The traditional ways just don't cut it any more. I've modernized the concept of "burn the ships." It's time to: CTRLALT-DEL. New channels, new tools and new business, like new lands, calls for new strategies, tactics and plans. It's time to reboot business. Hoping for innovation on the traditional quarter by quarter strategy is not going to save your business or your industry. The pace and rate of technology is at the point where these new media channels and platforms are simple for anybody to use (kids, teens, adults, boomers and older), and they're not only using them, they are creating their own experiences and sharing them with the world. How do you compete? You CTRLALT-DEL.

Success is going to come from those who really analyze and implement the latest shifts and trends in business, technology and media, and how it affects their organization (from innovation and business development to marketing, PR and human resources). This concept of CTRL-ALT-DEL is not simply about "change management." CTRL-ALTDEL is about "change business". It's about "change industry" and it's about "change business models." Zappos is more than a great example of superior customer service, iTunes is more than a great example of how to sell songs for $0.99, and Kogi BBQ is more than a great example of how to use Twitter to sell Korean BBQ tacos. They are all prime examples of how specific businesses hit the CTRL-ALT-DEL on their business model, and in the process reinvented the industry they served. Being on Twitter, having a Facebook Page or uploading videos to YouTube is one thing: thinking about how to CTRL-ALT-DEL your business and imagining what that will look like in the next 2-5 years, is a whole other game. The tools and platforms are just that: tools and platforms. The real "game changers" are those who figure how those tools and platforms to help them to reboot their business model. Which businesses do you love that have used the CTRL-ALT-DEL buttons on their business model?

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SHIFT PERSPECTIVES

FUTURELAB I am MD of Strategyn UK. We create product and service strategies for client companies using our patented innovation methodology. We work with a company’s executive management to invigorate growth and drive shareholder value through creating an internal engine for innovation. Our structured innovation process takes approximately 4 months to complete and the result is a precise view of where in the market there are opportunities for our client companies to create value. This process has created billions of dollars for value in market cap for client companies. Our list of clients includes Microsoft, Unilever, Colgate, MetLife, StateFarm, Motorola, J&J, Medtronic and AIG to name a few. Specialties: Innovation, New Product Development, Breakthrough product creation, OutcomeDriven Innovation and Research I also lead The OMC Group - a UK-based network of customer strategy consultants. Collectively, we have several years’ senior, international management and consultancy experience in consumer and business-to-business companies and the public sector as well as strong academic research pedigrees. We work in the fields of strategy, innovation management, organisational learning, marketing and brand management, customer insight and customer-focused capabilities development.

http://chrislawer.blogs.com Original Post

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Avoid the risks of using customer CHRIS LAWER inputs for innovation

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hen managed correctly, open, customer-driven innovating firms enjoy competitive advantage arising from a number of sources. These include; better “unlearning� of established assumptions and practices, higher innovation potential and predictability and faster sensing and response to valid and valued customer requirements. Also, customers perceive higher switching costs arising from their own knowledge and emotive investments in the firm which can help with building loyalty. The risks of customer involvement Nevertheless, as firms begin to develop new capabilities for capturing, sharing and applying customer inputs, there are important risks they should be aware of when doing so. These include:

1. Companies may fall in to the trap of predominantly captur-

ing expressed customer wants, becoming victims to the “tyranny of the served market� as described by Prahalad and Hamel

in their 1994 book, Competing for the Future. Here, firms may unwittingly limit themselves to bland, anecdotal, low-risk, incremental innovation if they are too explicitly, customer-driven and responsive.

2. Companies can get bogged down when using

4. In extreme cases, internal sharing of customer anecdotes

and stories can divert manager’s attention from what is truly important. Subsequently, they may curtail investment in resources to build deeper customer knowledge and lose their disruptive potential.

House of Quality or Voice of the Customer methods to interpret customer statements into ideas and potential solutions; they may even place unnecessary limits on the total set of customer inputs to make the process more manageable and timely.

5. Lead-user programmes can promote the significance of

select or ignore certain customer inputs based on their own beliefs and assumptions as to what is or is not important. In doing so, valid and important innovation opportunities may be lost. In their 2005 Harvard Business Review article, “Managing Customer-Centric Innovation�, Selden and MacMillan suggest that it is essential that frontline employees are put “at the heart of the innovation process�. Yet to do so effectively, customer-facing staff must be trained to sense and capture the right inputs from customers.

from customers. They come from a variety of sources – web sites, contact centres, lead user toolkits, customer satisfaction surveys, managers that “walk the talk�, focus groups and so on. What’s more, they arrive in a variety of different formats and technologies, few of which are consistent and actionable. Firms talk about customer needs in terms of solutions, specifications, benefits, expectations and so on; but in most case such statements of value do not allow them to identify precise opportunities for innovation.

the technical, specialist needs of the most active, knowledgeable customers at the expense of the requirements of the wider market.

6. Companies can quickly 3. Customer statements can become inundated and overbe “gamed�; that is, staff may whelmed with inputs and ideas

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FUTURELAB

The customer inputs are king The one common denominator in all the above-mentioned risks of customer involvement concerns the means by which companies capture, filter, share and apply inputs from the customer. Companies, lacking any knowledge of what appropriate customer inputs are needed may often ask the wrong questions, or worse, they may not know what to do with the information once they receive it. Customers, though happy to share their “requirements�, do not know what information the company really needs. No wonder then that such mutual confusion and ambiguity often leads to unexpected failure when companies pursue rigorously the customer-driven path to innovation.

But latent unarticulated needs do not exist With so many risks, some firms may be tempted to ignore the customer and shut out their inputs. (How often have you heard the “but no customer ever invented the Sony Walkman!� justification for this position?) Unfortunately, their argument for doing so also misses the point about customer inputs.

tomers do not know they have, was made popular in a customer behavior model developed in the late 1980s by Noriaki Kano, a Tokyo University of Science professor of science. Since then, much has been written about the many techniques developed to capture customers’ latent, unarticulated needs.

late their need for an in-car navigation system (a solution), but they did know they wanted to minimize the likelihood of getting lost, and to minimize the time it takes to find a route to a specific destination. They also knew they wanted to be notified of traffic problems to avoid delays enroute (a job).

The misconception however can be stated very simply. It is that latent unarticulated customer needs do not actually exist.

It’s not that customers don’t know what they need; it’s that they don’t know what solution will satisfy their needs. This is natural. Customers are not expected to be able to articulate a technically sound and forward-thinking solution – that is the company’s job. On the other hand, customers are perfectly able to articulate what jobs they are trying to get done and what outcomes they use to measure the successful execution of a job – even if products to help get the job done do not yet exist. When a need is defined as a desired outcome (as in the desire to minimise the likelihood of getting lost or the time it takes it to find a route to a specific destination), the argument for ignoring direct inputs from the customer is shattered; this is because there is no such thing as a latent, unarticulated outcome.

The mistake arises from a misinterpretation of Kano’s model. He used the term latent need to mean a feature that customers didn’t know to ask for, not an independently stated need or an outcome they did not know they had.

“� It’s not that customers don’t know what they need; it’s that they don’t know what solution will satisfy their needs.

I suggest that a solution is the tangible feature or product attribute that addresses and satisfies a customer’s need to get a job done. Confusion about latent needs enters the equation when the word need is used to mean solution. Customers do not have latent, unarticulated needs; rather, what they do have is latent, unarticulated It is widely assumed that in addition to solutions. their articulated needs, customers have latent, unarticulated needs. The term latent For example, in the 1980s consumers did need, which is defined as a need that cus- not know they wanted or could not articuTypically, the case for ignoring direct inputs from the customer rests on one single pillar: customers cannot articulate their latent, unmet needs. Yet this is in fact a major misconception that can severely limit a firm’s innovation potential.

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I believe that many managers conveniently use unarticulated latent needs as a rationale to avoid capturing customer inputs in the innovation process. Often, this may be because customer inputs are at odds with their own personal motivations or beliefs. If they would rather pursue their own ideas, this myth provides just the ammunition that is needed to cast a lingering shadow of doubt on the research. The argument is perfect: “If customers cannot articulate their latent needs, then any research conducted by the company is incomplete. Therefore, we should use our own insight and intuition, not customer inputs, to decide what to build.� ’’ ’

SHIFT PERSPECTIVES

FUTURELAB 7b Wa SOag b] ^]`b`Og Qcab][S`a Oa S[]bW]\OZ WZZ]UWQOZ W\RWdWRcOZa eV] O`S W\QO^OPZS ]T Y\]eW\U ]` Q][[c\WQObW\U eVOb bVSg eO\b Pcb bVS SdWRS\QS R]Sa \]b ac^^]`b bVOb O`Uc[S\b /a eS VOdS aSS\ Qcab][S`a R] Y\]e eVOb bVSg eO\b ³ eS Xcab VOdS b] ZWabS\ T]` bVS ]cbQ][Sa bVSg eO\b b] OQVWSdS \]b eVOb TSObc`Sa bVSg bVW\Y bVSg eO\b /TbS` \SO`Zg gSO`a ]T b`gW\U Q][^O\WSa `S[OW\ T`cab`ObSR W\ bVSW` STT]`ba b] TWUc`S ]cb V]e PSab b] caS Qcab][S` W\^cba b] RSZWdS` ]\ bVS ^`][WaS ]T Qcab][S` R`WdS\ W\\]dObW]\ 2SPObS Q]\bW\cSa Oa b] eVWQV Wa bVS []ab STTSQbWdS [SbV]R T]` QO^bc`W\U bVS d]WQS ]T bVS Qcab][S` / \c[PS` ]T e`WbS`a ]\ W\\]dObW]\ W\QZcRW\U 1ZOgb]\ 1V`WabS\aS\ O\R 2]`]bVg :S]\O`R QaeSO` Pg ]PaS`dObW]\OZ `SaSO`QV =bVS`a acUUSab caW\U ^S`a]\OZ W\bS`dWSea RgORa b`WORa T]Qca U`]c^a O\R Qcab][S` dWaWba =bVS`a TOZZ POQY ]\ bVS ZSOR caS` [SbV]R 0cb O`Uc[S\b ]dS` eVWQV [SbV]R b] caS Wa c\\SQSaaO`g ³ O\]bVS` [WabOYS T`S_cS\bZg [ORS Wa bVOb bVS [SbV]R [ObbS`a []ab Pcb Wb R]Sa \]b) Wb¸a eVOb Qcab][S` W\^cba g]c O`S Z]]YW\U T]` bVOb Wa Tc\RO[S\bOZ b] acQQSaa 4]`bc\ObSZg bVS`S Wa O PSbbS` eOg 7\abSOR ]T `SZgW\U ]\ bVS ZWbS`OZ d]WQS ]T bVS Qcab][S` ]` O acPXSQbWdS b`O\aZObW]\ ]T bVOb d]WQS Q][^O\WSa QO\ aSSY b] QO^bc`S bV`SS RWabW\Qb bg^Sa ]T W\^cb bVOb O`S Tc\RO[S\bOZ b] bVS W\\]dObW]\ ^`]QSaa O\R Wba acQQSaaTcZ SfSQcbW]\ AUGUST ISSUE

To create a breakthrough product or service or to successfully enter a new market, a company must know the following:

aWhSOPZS ^S`QS\bOUS ]T PSdS`OUS aOZSa 1cab][S`a OZa] ]TbS\ eO\b O ^`]RcQb ]` aS`dWQS b] ^S`T]`[ []`S bVO\ ]\S X]P Ob O bW[S GSb Q][^O\WSa bS\R b] T]Qca ]\ bVSW` ]TTS`W\Ua ]\ ]\Zg ]\S X]P PSQOcaS ORR`SaaW\U bVS O\QWZZO`g X]Pa ]TbS\ \SQSaaWbObSa RSdSZ]^W\U \Se ]` RWTTS`S\b Q][^SbS\QWSa ]` Q`]aaW\U ]`UO\WaObW]\OZ P]c\RO`WSa EVWZS RSdSZ]^W\U bVSaS QO^OPWZWbWSa [Og W\RSSR EVOb X]Pa bVS Qcab][S` Wa b`gW\U b] USb R]\S `S_cW`S \Se aYWZZa O\R `Sa]c`QSa ORR`SaaW\U OZZ bVS X]Pa Qcab][S`a O`S b`gW\U b] USb BVS ]cbQ][Sa bVS Qcab][S` Wa b`gW\U b] O ^`]RcQb ]` aS`dWQS c\RS` O UWdS\ aSb ]T OQVWSdS eVS\ ^S`T]`[W\U bVSaS X]Pa W\ O QW`Qc[abO\QSa QO\ QS`bOW\Zg `SO^ `SeO`Ra dO`WSbg ]T Q]\bSfba

2. Desired Outcomes: Metrics to drive

BVS ^`]PZS[a O\R Q]\ab`OW\ba bVOb abO\R innovation W\ bVS eOg ]T OR]^bW]\ ]T O \Se ^`]RcQb ]` aS`dWQS 7\ ORRWbW]\ b] eO\bW\U b] USb []`S X]Pa R]\S Qcab][S`a eO\b b] USb O a^SQWTWQ X]P 1. Jobs to be done: Key inputs for growth R]\S []`S STTSQbWdSZg 0g ^`]dWRW\U bVS[ eWbV bVS [SO\a b] R] a] O Q][^O\g Q`S1cab][S`a Pcg ^`]RcQba O\R aS`dWQSa ObSa dOZcS BVS TW`ab abS^ W\ bVWa ^`]QSaa Wa eVS\ bVSg \SSR VSZ^ b] USb O X]P R]\S QO^bc`W\U T`][ Qcab][S`a bVS [Sb`WQa ]` C\RS`abO\RW\U eVOb X]P O Qcab][S` eO\ba [SOac`Sa ]T dOZcS bVOb RSTW\S V]e bVSg b] USb R]\S eWbV O ^`]RcQb ]` aS`dWQS Wa eO\b b] USb bVS X]P R]\S O\R eVOb Wb [SO\a Q`WbWQOZ b] O ^`]RcQb¸a acQQSaa :Saa ]PdW- b] USb bVS X]P R]\S ^S`TSQbZg ES QOZZ bVSaS ]ca V]eSdS` O`S bVS U`]ebV ^]aaWPWZWbWSa [Sb`WQa bVS Qcab][S`¸a RSaW`SR ]cbQ][Sa bVOb [Og `SacZb T`][ Y\]eW\U eVOb ac^- ^]`bW\U O\QWZZO`g ]` `SZObSR X]Pa Qcab][S`a eO\b R]\S eWbV bVS ^`W[O`g X]P ]T W\bS`Sab EVS\ SfSQcbW\U bVS X]P ]T R`WdW\U b] O a^SQWTWQ RSabW\ObW]\ T]` SfO[^ZS Qcab][=TTS`W\U a]ZcbW]\a bVOb ORR`Saa ORRWbW]\OZ S`a [Og eO\b b]( X]Pa T`S_cS\bZg `SacZba W\ bVS Q`SObW]\ ]T O P`SOYbV`]cUV ^`]RcQb ]` aS`dWQS 4]` Sf- ;W\W[WaS bVS ZWYSZWV]]R ]T [SSbW\U b`OTTWQ O[^ZS PSdS`OUS ^`]RcQS`a VOdS abO`bSR RSZOga S U `]ORe]`Ya `caV V]c` V]b[OYW\U ^`]RcQba bVOb \]b ]\Zg _cS\QV a^]ba O\R W\QWRS\ba bVW`ab O X]P Pcb OZa] S\OPZS caS`a b] ]P- ;W\W[WaS bVS ZWYSZWV]]R ]T USbbW\U Z]ab bOW\ dWbO[W\a \cb`WS\ba O\R VS`Pa bVOb [Og ;W\W[WaS bVS bW[S Wb bOYSa b] ORXcab O `]cbS W[^`]dS ^S`T]`[O\QS W\ QS`bOW\ Q]\bSfba S U eVS\ R`WdW\U A]0S 0SdS`OUSa @SR 0cZZ 3\S`Ug 2`W\Y ;W\W[WaS bVS bW[S Wb bOYSa b] `SOQV bVS RSaO\R 5ZOQSOc DWbO[W\ EObS` ORR`Saa bVS bW\ObW]\ `SZObSR Tc\QbW]\OZ X]Pa Qcab][S`a eO\b bVS ;W\W[WaS bVS T`S_cS\Qg ]T Xc\QbW]\a O\R R`W\Ya b] ^S`T]`[ eVS\ _cS\QVW\U bVSW` bc`\a bVW`ab AcQV ^`]RcQba \]e OQQ]c\b T]` O

SHIFT PERSPECTIVES

FUTURELAB

3. Identifying Constraints: Barriers to Customer Success It should also be noted that when captured correctly, desired outcomes are stable over time. People who were driving their cars back in the 1960s for example, wanted to minimise the likelihood of getting lost and reduce the time it takes to arrive at a specific destination (others may wish to increase the number of attractions en-route if they are driving for pleasure) – just as people do today and always will in the future.

Another way to create value is by helping customers overcome constraints that inhibit them from getting a job done. It is common for numerous constraints to stand in the way of product use or adoption. Determining why a product or service would not be used – even if it satisfies all the stated outcomes – identifies a third, often very promising avenue for potential growth.

Desired outcomes have this unique quality because they are fundamental measures of performance inherent to the execution of a specific job. Indeed, they will be valid metrics as long as customers are trying to get that job done.

Summary

The outcomes that should be the focus for improvement however do change over time as new and better technologies are introduced.

By dissecting a job – that is a task for which a product or service is used – into its discrete steps and then asking customers what performance and quality metrics they use to measure success in executing each step, we can obtain a set of customer desired outcomes. When the resulting outcome statements are used as inputs into the innovation process, variability is held in check, and the risks of customer-driven innovation are overcome. Moreover, companies are finally able to reliably boost their efforts at customer-driven innovation.

When in-car navigation systems became portable from one vehicle to another for example, customers were better satisfied with their ability to minimise the time it takes to transfer one system from one vehicle to another.

References

Consequently, knowing what outcomes customers are trying to achieve gives a company short-term as well as long-term direction in selecting which ideas and technologies to pursue.

This meant that the opportunity to create new value along that dimension was diminished and that manufacturers had to determine which other outcomes were important and unsatisfied before new value could be created.

Hamel, G. and Prahalad, C.K. (1994) Competing for the Future, Harvard Business School Press, Boston Selden L and I. C. MacMillan (2006) “Manage Customer-Centric Innovation - Systematically�. Harvard Business Review, April, pp. 108-116 A. Ulwick, (2006) What Customers Want: Using Outcome-Driven Innovation to Create Breakthrough Products and Services. McGraw-Hill, New York

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FUTURELAB

Developing a Concise Definition of Co-Creation as a Foundation for Innovation and Competitive Advantage A perspective of the firm as an autonomous knowledge creator that learns about customers and creates value for them is increasingly redundant. Now, firms are exploring alternative modes and building capabilities to co-create new knowledge and innovate superior and mutual value with their customers. Such a shift in assumptions about the value of customer-held knowledge has profound repercussions for how companies innovate as well as the nature of value itself. Some even argue that the very locus of innovation is slowly migrating from within to outside corporate boundaries and that this movement demands a new consideration of questions relating to how firms actively access and deploy the knowledge held by customers. In the following twelve statements, I develop a logic that concludes in a concise definition of “co-creation� and how firms may derive competitive advantage by facilitating co-created value. Traditionally, customer value has been defined and differentiated by product quality (Features, Attributes and Benefits - the old Kotlerist FAB of 1950-1990s marketing textbooks).

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Open source product innovation (or “co-production� not cocreation) emphasises the technical co-production of new and improved products, their features and attributes with customer's direct involvement in the ideageneration, concept development stages of the innovation process; it is limited to the design, development and testing of enhanced functional “things�, “objects� or “technologies� with individuals or in communities of users. ! Increasingly though, value is migrating from products to experiences as customers seek out personalised value to satisfy their situational needs. (Drivers: demand for better experiences, technology enablers, enhanced cognition, new sources of knowledge, increased socialisation, product functional similarity, etc.) " Customers are therefore placing increased value on the quality of the experiences they have when they interact with firms and their products (and services). # The quality of an experience is determined by how relevant or personalised the experience is for an individual customer; Experience quality is a combination of the functional and emo-

tional elements specific to the situational and temporal context of each customer or context. $ The locus of value-creation therefore shifts from product quality and design innovation to experience design and quality innovation, or service design. % As value-creation is “innovation�, traditional firm-centric innovation processes are becoming distributed in order to provide the means to deliver ongoing, adaptable, personalised, unique experiences for individual customers in unique space – time – event contexts (or “experience environments�). & Therefore, the locus of innovation is shifting towards the individual in distributed experience environments. ' In distributed experience environments, the firm and customers come together to create value; value in the form of personalised unique experiences for customers; knowledge, capability for both and revenues and profits for the firm; the by-product of which is know-what and know-how to continue to deliver and shape that value.

Therefore, co-creation defines the processes of distributed value-creation between firms and customers or between customers directly, to create personalised experience value and knowledge, or enhanced cognition defined in the broadest sense and goes beyond “rational inference, know-what and know-how, to include perception, interpretation, value judgments, morality, emotions and feelings� (after Nooteboom’s Cognitive Theory of the Firm, 2009). Markets are therefore forums for the co-creation of personalised experiences; value is differentiated according to the quality and relevance of personalised experiences for customers (as in Prahalad and Ramaswamy, The Future of Competition, 2004). To facilitate co-creation, firms must therefore develop platforms that bear capabilities for the creation and release of heterogeneous, personalised customer experiences or distinctive, unique value. These platforms provide the foundation for deriving competitive advantage arising from enhanced service and experience quality, knowledge capability, and novel learning mechanisms for developing dynamic capabilities for ongoing innovation performance.

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FUTURELAB

SHIFT PERSPECTIVES

“We’re cautious. We’d rather exceed expectations than miss but I think it’s going to be a continued difficult economy.

Apple is trying a different way to navigate out of this .

We’re trying to innovate.�

Steve Jobs

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SHIFT PERSPECTIVES

FUTURELAB Idris Mootee is a highly acclaimed strategy and innovation expert and keynote speaker who has a long history of working as a strategy adviser serving C-level executives and start-ups. Idris leads retreats, facilitates executive strategy meetings, speaks at prestige conferences on the topic of strategy, business model design and innovation, and conducts executive level workshops around the world. He is the author of four business books (some are published in mulit-languages). Quoted in publications including the WSJ and NY Times. He holds advanced degrees in business and management. Idris’ presentations range from 40 minutes to 90 minutes. Each presentation is researched and customized specifically to company and its industry.

http://mootee.typepad. com

Original Post

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What Is White Space Mapping?

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hen people talk about exploring white space in innovation, often they refer externally to unserved markets or businesses that are outside their core. It is basically where unmet and unarticulated needs are uncovered to create innovation opportunities. White space is where where products and services don’t currently exist based on the present understanding of values. White space is also a tool that allows us to look at the landscape with new lenses. White space can moreover be defined as a unique set of attributes, identifying new openings where your competitors currently aren’t focusing or it is being considered part of what traditionally considered a remotely different industry. White space is also an important outcome of a customer inquiry and discovery process that leads to new profit growth opportunities by defining potential gaps in existing markets. This process can be used to identify entirely new markets . It can also be used to map incremental innovation in products or services - new source of customer value that can be translated to economic value.

IDRIS MOOTEE

Many are reluctant to enter any white space because of the unknowns. Some can cannibalize existing products or services and some require a very different business models. And some require extensive system design and support. As a result, no one wants to take any risks and naturally retreated to their core and close adjacencies. Deciding what’s the core is an art and then deciding what’s considered adjacencies is another art. Do we look at the core from competencies, brand or assets? How do we use white space mapping? The first step in the white space mapping process is to determine if you will approach it from an internal or external perspective. Externally focused, the process begins with mapping the market, products or services based on whether these markets are currently served, underserved or unserved. The goal is to find gaps in existing markets, product or service lines that represent opportunities for your business. Some of these gaps may be opportunities with little or no competition. Others may identify non-consumers. Still others may uncover an entirely new mar-

ket space that has the potential to transform your industry. Internally focused, white space mapping becomes an inward looking tool to map your company’s ability to address new opportunities or threats and how efficiently and effectively it can react to these opportunities from a process, systems and structural perspective. In this scenario, white space mapping becomes an instrument to identify barriers to your company that inhibit it from pursuing new products, new markets or threats unless a new business model is developed. As markets mature, competition intensifies, new technologies are invented and new consumer behaviors are constantly emerging. As such, white space mapping is becoming an important strategic exercise for organizational learning and strategic planning as organizations actively look for new sources of differentiation. For a company to remain relevant over the long term, it must respond to these shifting conditions intelligently and white space mapping needs to be part of their strategic planning efforts.

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FUTURELAB I have nearly 30 years of experience in business, having worked with a number of leading retailers, including Best Buy, DSW, Supervalu, Shopko, Filene’s Basement, Tweeter Home Entertainment, Save-A-Lot, and Value City, among others. Most of my work has been in the area of Strategic Planning, but I have also done work in marketing, finance and consumer research. I am bi-lingual (speak both marketing and finance) which helps me take a more complete and balanced approach to business problems/issues. http://planninga-fromnanninga.blogspot.com Original Post

AUGUST ISSUE

Strategic Planning Analogy #314: One Strategy GERALD NANNINGA THE STORY

ciding what should get done does not necessarily ensure that it will, in fact, get done.

Early in my career, I was working on a project with another guy in the department. He seemed more In the story, there was a disconnect between what motivated than normal to get this project done. the company wanted to get done and what I wanted to get done. Project success and my personal He also wanted me to be more highly motivated. success were at odds with each other. As a result, Trying to get me excited, he said, “I was talking to I was not fully motivated to make the company the boss, and he said that if we do a really good goal a reality. job on this project, I will get a big promotion.â€? These types of situations happen in the business So I started thinking‌this guy had less seniority world all the time, often on a far larger scale than than me and a lesser position. If he were to get the project in my story. Businesses will make grand a big promotion, it would mean that he would pronouncements of wonderful new strategic inibecome my boss, putting an additional layer be- tiatives. They will explain how these new stratetween me and the top of the organization. In es- gic plans will make everything for the company so sence, his reward would have the indirect effect of much better. acting as if I we getting demoted, or at best havThen, over time, you stop hearing much about that ing my career path made worse. grand strategic initiative. Worse yet, there is no So, if WE work hard, HE benefits at MY expense. real evidence that the key elements of the strategy What’s in this for me? Would not I be better off ever got accomplished. Status Quo prevails. if the project has a little less than a stellar performance? The status quo looked a lot better to A year or two later, the business will make grand me than the so-called “rewardsâ€? that would come pronouncements about an entirely new and different set of strategic initiatives. Forget those old from working harder. initiatives. Let’s embrace the new ones. Of course, I could see the look on the face of the guy I was the success in implementing the new initiatives working with. He was starting to realize what was turns out to be no better than the failure of the going through my mind. Now he regretted having old ones. Why? Usually in these situations, there is a disconnect between the ones declaring the told me about his potential promotion. initiative and the ones who are supposed to accomplish the initiative (just like what happened to THE ANALOGY Business is ultimately about getting things done. me). Unless you fix the disconnect, the strategic One of Strategic Planning’s key roles is to help de- initiative will not succeed. termine what should get done. However, just deÂ’Â’ $ Â’

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FUTURELAB THE PRINCIPLE

same page. The book uses blogs by the getting paid. In addition, all the mechanics Windows 7 project manager to illustrate figured that they would soon be out of a The principle here is that strategic plan- how Microsoft created strategic integrity job (replaced by chefs) if they cooperated. ning needs to be more than just a source through this process. of great ideas or mandates. It also needs to get involved in the messy work of im- In my story above, my rewards and incen- Finally, I’m more comfortable managing a plementation. Otherwise, the forces of the tives were not aligned with the project, so repair shop than a restaurant. So we destatus quo will usurp control and render I was less than fully motivated to make the cided to keep things as they were.� project a success. There was the potential the strategy powerless. for me to lose strategic integrity. Common sense should tell us that this would be an expected response. If you I was reminded of this principle today while reading an interview with one of the au- What is amazing to me is that this is con- truly wanted to make the conversion from thors of a book called “One Strategy.� The sidered a radical enough new idea to war- auto repair shop to gourmet restaurant, book, which was published late in 2009, rant a book. Isn’t this just common sense? you would need to get rid of all those barriers to conversion and stick around to tells the story of the project to design and Let’s assume for a moment that I owned make sure that the forces of status quo do release Windows 7. an auto repair shop and decided to turn it not win. The premise of the book is as follows. Most into a gourmet restaurant. I tell the head companies have two strategies: The “ex- mechanic to make the change and then go But I guess it is not common sense, since plicit� or “directed� strategy (the declared away for a few months. When I come back, strategic failure (lack of strategic integrity) strategic desire from the top) and the I find out that nothing had changed. When is so common. “implicit� or “emergent� strategy (what I ask the mechanic why the new strategy Part of this is the fault of the professional emerges from the everyday activities of was not implemented, he says: strategy community. We often don’t like the organization). If those two strategies getting our hands dirty with the messy are not aligned, you will fail. task of implementation. The book’s prescribed solution is to seek We voluntarily cut ourselves out of the “strategic integrity�—where both stratedaily conversation where the “emergent� gies are one and the same. This is done by strategy takes place. This is a mistake. No working on all those forces which cause wonder so many companies see strategy the “emergent� strategy to vary from the professionals as irrelevant. intended “directed� strategy.

We often don’t like getting our hands dirty with the messy task of implementation.

This includes things like policies, procedures, organization, rewards, incentives, management style, and so on. In addition, there needs to be constant communication between the keepers of the directed strategy and the keepers of the emergent strategy so that they can stay on the AUGUST ISSUE

“You didn’t give me any money to make the conversion from auto repair to gourmet restaurant. I had no policies or procedures for running a restaurant. All the employees here are compensated as a % of the labor costs in automotive repairs. If they stop doing auto repairs, they stop

Part of this is the fault of the operators who try to block strategists from “meddling� in their affairs. Strategists cannot help remove the barriers if they are forbidden from entry into the world of everyday business activity. ’’ % ’

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So how can we help fix this situation? 1`SObS 7\QS\bWdSa T]` 1]]^S`ObW]\ If the natural tendency is for the two sides to not want to work together, create incentives to overcome these natural tendencies. Tell the strategists and the operators that neither is rewarded unless both do their part to build the One Strategy. Suddenly, their success is dependent upon each other, so there is more incentive to work together. 0ZS\R bVS BSO[a The operators are more likely to trust the “meddling� of the strategists if some of the members of the strategy team are current or former operators. In addition, the strategists are more inclined to get their hands dirty if members of their team are used to getting their hands dirty. So if you want one strategy, build one blended team. Professional strategists and professional operators both have something to offer. Blend them together, so that they offer assistance to each other rather than offering two distinctively different strategies.

AUGUST ISSUE

SUMMARY Strategic plans are doomed if they are mere words handed off to people who are incented to keep the status quo. Strategy & Implementation need to be blended into a single, ongoing process.

FINAL THOUGHTS

!

I witnessed a company where about 90% of the organization believed that the “directed� strategy would have a negative impact on their career path. This was like my little story above, only multiplied by the thousands. As you may have guessed, the 90% revolted against the 10% and won.

<SdS` c\RS`SabW[ObS the potential `SaWabO\QS ]T ^S]^ZS who feel that change bV`SObS\a bVSW` ^S`a]\OZ OUS\RO

Â’Â’ & Â’

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FUTURELAB Scott is the Managing Director of Innosight Ventures. He previously was the President of Innosight’s consulting arm where he worked with Fortune 500 and start-up companies in industries such as media (print and broadcast), consumer products, investment banking, transportation and logistics, healthcare, medical devices, software, petrochemicals, and communications equipment. In 20052006 he spearheaded a year-long project to help the newspaper industry grapple with industry transformation (Newspaper Next), and in 2003-2004 led a multi-month project to help the government of Singapore understand how to create an environment that fosters entrepreneurialism and innovation. Scott is a featured speaker on topics of growth and innovation. He is a judge in the Wall Street Journal’s 2009 Innovation Awards. He is a faculty member of the Leadership, Innovation, and Growth Program at GE Crotonville. Scott is also a member of the Board of Directors of Media General. Scott has written three books on innovation: Seeing What’s Next with Harvard Professor Clayton Christensen (Harvard Business Press, 2004), The Innovator’s Guide to Growth with Mark Johnson, Joe Sinfield, and Elizabeth Altman (Harvard Business Press, 2008), and The Silver Lining: An Innovation Playbook for Uncertain Times (Harvard Business Press, June 2009). He has written articles in publications such as the Wall Street Journal, Harvard Business Review, BusinessWeek, Forbes, Sloan Management Review, Advertising Age, Marketing Management and Chief Executive, is a regular contributor to Harvard Business Online and serves as the editorial director of Strategy & Innovation. http://blogs.hbr.org Original Post

AUGUST ISSUE

The Danger of Part-Time Business Builders

H

ow many entrepreneurs do you think consider their venture to be a hobby? That is, their venture is one of a long list of things they are working on? Probably not too many — especially not many successful ones. Yet, that's how many companies treat their new growth businesses.

SCOTT ANTHONY form to the base business rather than explore the disruptive frontier.

Leaders sometimes think this is a rewards problem. They will note how an entrepreneur who owns a startup business will just work harder because they are positioned to capture all of the economic returns. I think that's partially true. But the reality How so? Many companies ask people to is that there is a big difference between be part-time business builders. Consider waking up in the morning thinking only companies that form "innovation teams" about a new business and waking up in where members are expected to work on the morning thinking about a range of difseveral businesses concurrently. Or com- ferent things, regardless of the rewards. panies that ask people to fit businessbuilding efforts into their "spare" time. It might seem hard to have scarce reIt's possible to be a valuable part-time sources focus fully on a single opportunicontributor to a project. And it's possible ty. But the reality is, this single focus is by to play a vital role in an innovation effort far the best approach to build a disruptive that closely adheres to a company's core growth business. And it doesn't have to business model. be a resource drain if you keep teams lean and focused (more on this in a future post But building a truly new business can't be when I talk about "Penrosian slack") and a part-time endeavor. There are simply make reasonably quick decisions about too many challenges that require constant shutting down, re-vectoring or acceleratattention. Remember, most start up busi- ing businesses. nesses fail, and that's with diligent, minute-by-minute attention from the founding team. At best, setting up growth initiatives in a fractionalized manner slows innovation substantially. At worst, this setup leads companies to veer in the wrong direction as part-time business builders implicitly slide back into known models that con-

Building a new business is hard enough as it is. Don't make it harder by asking people to be parttime business builders. Â’Â’ ' Â’

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FUTURELAB What do I do? I help brands align their online and offline experiences into Oneline™ experiences, to create a better business, drive revenue and differentiate in a world that’s too similar. I help brands understand how to better connect with their audience and that today what you do is far more important then what you say. You can go to Engage Me to learn more about the specific services that I can bring to you. You may have known me as the Founder and Chief Experience Officer of the Brand Experience Lab, which was called “A playroom for marketers and agenciesâ€? by Ad Age when it first opened. Or, you may know me from my days writing Experience Manifesto, a blog I wrote for over 5 years. Or maybe you know me as LBBINC (my previous company was Location Based Branding) on Twitter. http://blog.polinchock.com Original Post

The Blind Men and the Elephant DAVID POLINCHOCK I’m sure you all know the story of the blind men and the elephant. If not, here’s a brief description from Wikipedia:

For example, social media is clearly hot right now and certainly there are brands that are using social media very well. But, for example, I’m not sure all brands should be on Twitter or In various versions of the tale, a will have fan pages. They are fine group of blind men (or men in products when you need them, the dark) touch an elephant to but for example, how many peolearn what it is like. Each one ple would friend Preparation H? touches a different part, but only one part, such as the side or the tusk. They then compare notes on what they felt, and learn they are in complete disagreement. The story is used to indicate that reality may be viewed differently depending upon one’s perspective. I was out walking the dogs today and this image popped into my mind. I was thinking about the ad industry at the time and the various elements all vying for attention. I hear people talk about how brands can’t survive without this or that and it seems at times that we’re all blind, feeling our way around the brand. One person only sees social media, the next only traditional media, the next only digital, a fourth only retail and so on. But not enough people are seeing the whole picture.

AUGUST ISSUE

Would you follow them on Twitter?

When people ask me to define “brand experience,� I say that it’s everything you do. And thanks to tools like Twitter and Facebook, everything you do is even more important today. Deliver a bad experience and the whole world knows, right then and there. It’s comforting to see more agencies add strategic, big picture thinkers to their ranks and brands need to start adding more big picture thinkers as well.

Someone needs to be looking at everything you do, the big picture. Looking at how all of the pieces fit together to create one, consistent brand experience.

What part of the elephant do you see? Are you able to see that there are other parts? Do you understand how all of those parts work together to create something better?

Brand managers need to stop seeing only the one part and they need to start seeing the whole picture. In the future, that’s what brands will live & die on. ’’ ’

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FUTURELAB Mike Brown is a Strategic Innovation Catalyst at Brainzooming™. He has been at the forefront of leading Fortune 500 culture change, contributing new approaches in research, developing simplified tools for strategic planning, and aligning sales, marketing, and communications strategies for maximum business results. Additionally, he’s won multiple awards for his strategic brand-building approach to customer experiences in NASCAR and conference event marketing efforts. He has accomplished these successes through a teaching orientation and providing non-experts with dynamic tools so they can succeed like experts. Mike is the author of the ebook, “Taking the NO Out of InNOvation,â€? a guide to breaking through personal challenges to living a more creative and innovative life. Additionally, he authors the daily Brainzooming blog on strategy, creativity, and innovation. He’s been a frequent, repeat speaker for organizations, associations, and universities, http://brainzooming.com Original Post

AUGUST ISSUE

Strategic Planning Doesn’t Have to Kill Creativity

I

sat through a poorly managed, businesswide meeting to allegedly solicit perspectives for an organization’s vision statement. Rather than using creative thinking exercises to help collectively form a strong vision, however, the leader directly asked the entire team what the vision should be. Participants then sat quietly as only a few people spoke (one-at-a-time) to offer opinion-filled perspectives.

MIKE BROWN Instead, ask strong strategic planning questions to get participants to share the important words, phrases, and ideas that shape a vision. Such questions include:

What is our organization passionate about doing for our people and our customers? What are we best at and where can we continue to excel? Who will our customers be five years from now? What do we think will be important for us to deBeyond being incredibly boring for everyone, liver in best serving them? think about this: What was the cost of 40 or 50 What are capabilities we want to put in place well-paid people sitting around mostly twiddling to stretch our organization and better serve our their thumbs for 3 hours, as perhaps 10 of them audiences? What are the things we need to concentrate on actively participated at any point? to dramatically exceed our goals and objectives? What a way to waste time, creativity, and goodHave small groups report their answers to these will for future strategic planning. questions. Listen intently and write down ALL Do yourself a favor. Bookmark this article, and the ideas the group shares. if you find yourself in an organization trying to develop a vision statement, PLEASE don’t take From this treasure trove of input, you’ll be ready to construct an overarching statement born from the same approach I endured! active participation and the hopes and language of your organization. Plus people will actually be Here’s what to do: excited about participating the next time you Break into small groups where multiple people need them to do strategic thinking. can actively participate at the same time to stretch the group’s thinking and share creative Oh, and by the way: The Brainzooming Group is great at facilitating these types of dicussions ideas. so you get maximum participation. We actually DON’T ASK the obvious question, “What should generate creativity and enthusiasm through how our vision be?� Going right to this question won’t we approach a team’s strategic conversations. save time or improve results. People don’t talk in Email me at brainzooming@gmail.com, and let’s ready-made “vision statements.� This one-ques- talk about how we can help you deliver great tion approach simply draws out monologues results for your organization. doing little to coalesce a group’s collective perspective. ’’ ’

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FUTURELAB I am currently building a practice around social business design with Dachis Corp. I have 14 years experience in the creative field with the majority of my time spent in digital marketing and experience design. An active participant in the industry, I write Logic + Emotion which is ranked in the top 10 media + marketing blogs according to Advertising Age. My writing and visual thinking has been cited by Forrester, The Boston Globe and has landed me in BusinessWeek on several occasions including their “Best of 2006�. Prior to Dachis, I spent time as a creative/strategic lead at notable firms such as Critical Mass, Digitas and Agency.com—putting in a combined tenure of 8 years in the large digital agency environment. I led multiple initiatives for clients such as HP, Allstate, Fifth Third Bank, Miller Brewing, Grainger, and Bally Total Fitness. Previously, I earned my interactive stripes working with The Chicago Tribune on their site initiatives. Today, I blend strategy with design and look for new opportunities around the evolving Web (otherwise known as “Web 2.0�) to enhance the customer experience and bring brands and people closer together. http://darmano.typepad.com Original Post

AUGUST ISSUE

Advertising: Innovate or Die. Vol. 1

I Â

thought I had found my dream candidate. Someone who understood the language of both design and business. Someone who could think in pictures and express concepts with prototypes. A creative problem solver. An individual with a firm grasp on “Web 2.0�. Someone who saw the potential of emerging technology as enabling us humans to make the connections we’ve always desired.

DAVID ARMANO

Analytical Expressive Curious Empathetic

I brought him in for an interview. I showed him some of our own concepts. Our prototypes and visualizations of better, more fluid interactive experiences. He was impressed. He didn’t think that marketing firms did this kind of thing. He was curious to hear more. So I did my best to articulate the role of the digitally-integrated agency in creating brand experiences.

He understood technology, but more importantly he understood why people behave the way they do.

I sensed that I probably would not be successful in recruiting him—but it was still worth a shot. He possessed a blend of skills that I was looking for.

“1. The Deliverable. Advertising agencies produce content for a living; specifically, memorable stories in print ads and broadcast spots. Moreover, these stories are to be one-of-a-kind. Storytelling does not require R&D, nor does originality in storytelling.

In the end, he went to go work for Google.

Why am I sharing this tale of love and loss? I’m sharing it because I think it’s time for Advertising to get serious about innovation. RuThe kinds of experiences that people reward mor has it that the Ad Industry is in it’s death throes. I don’t think that’s completely true—but with their time, attention and participation. if Advertising doesn’t start innovating for real— I knew he was being sought after. He had just they will be dead as a doornail. Max Kalehoff graduated from the Illinois Institute of Technol- of Nielsen BuzzMetrics recently featured a post ogy, but he had that aspect about him—like a that made the case for how the Advertising inlot of people were in the process of pursuing dustry model isn’t equipped to handle R&D. In it, he cited the following reasons: him.

Â’Â’

Â’

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FUTURELAB BVS DOZcS >`]^]aWbW]\ Like all profes- OK, you heard me ramble on about my sional-services firms, agencies sell exper- dream candidate. The one that went to tise, which by definition reflects what has Google. worked in the past. R&D reflects an intention to try what hasn’t been tried before. ! BVS 1cZbc`S Like all vendors, ad agencies are risk-averse. Proposing the untried to results-oriented clients is a risk with long odds, an unknowable payoff and a steep downside.

But it also has to be really creative. It would need to know how to both tell stories and craft experiences. It would need to be well versed in the multitude of digital channels and be able to execute in them.

A] eVOb R] 7 bVW\Y It would need to be able to present brands ways that are consistent with the lifebVS Âľ2`SO[ /US\QgÂś instyles of the people who swear by these brands. e]cZR Z]]Y ZWYS-

It would need to understand how to engage people as opposed to just telling stories to Hmmmm. Well, right off the bat, it would them. So maybe the agency would be part " BVS =e\S`aVW^ The big agencies that need to stop acting like an agency. That R/GA. have the requisite resources are all publicly would mean replacing the Dog and Pony owned these days, and Wall Street has little show with things like cultivating real cus- But none of this is enough. patience with company spending that can- tomer insights and utilizing Ethnography. Sometimes you need more than creativnot be tied to short-term results. ity, strategy, design thinking, anthropology, and a good media plan. # BVS 3\dW`]\[S\b There’s been general Sometimes you just need some plain cooky, erosion in R&D spending by U.S. businesses out of the box thinking that stops people in recently.� their tracks. And more recent contributing factors include:

Then I thought about my dream candidate. The one that went to work for Google. Google does R&D. They experiment with new products, features and services. They certainly innovate (though the case can be made that this is overstated). Traditional Advertising at the core is still about telling stories. T-E-L-L-I-N-G. Not experiencing for yourself. Hearing about it. Reading about it. Passively taking it in. Now I’m all for good storytelling, but there has to be more in order to thrive in the world of creative, empowered, individualistic, fickle consumers who spend more time engaging the social network then they do watching TV. AUGUST ISSUE

“

AB=> OQbW\U ZWYS O\ OUS\Qg

Sometimes you need to be one step ahead of the curve culturally to deliver something that’s never been seen before. Sure, some of your efforts might be better then others, but you wouldn’t be afraid of taking risks and doing things like putting people in Chicken suits for all the Web to see (and interact with).

So maybe the dream agency is part CrispMy vision of a dream agency would be filled en Porter + Bogusky. with people who think with both sides of their brains and visualize different solutions Food for thought. to the same problem. The agency would need to have a toolbox of methodologies, but still be nimble enough to act quickly. Maybe the dream agency will be part IDEO. Â’Â’ ! Â’

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Shift Perspectives discussions suggestions company analysis interesting links, articles & videos polls Q&A’s www. sh ift pe r spe ct ive s .net AUGUST ISSUE

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