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Alas, Poor Henry and the Problem

According to legend, Henry Ford scoffed at market research and what we now call Consumer Insights, proclaiming, “If I had asked people what they wanted, they would have said faster horses.” While there is a certain degree of wisdom in this statement, it has been misquoted to justify bad, hubris-inspired product failures by too many corporate egos.

Yes, to Ford’s credit, sometimes the visionary impulse of the inventor lives outside of convention. However, Ford made a mistake by thinking of his customers as unimaginative drones and an objectified, uncreative herd.

In reality, this quote is an act of fiction and cannot be traced back to the writings or sayings of Henry Ford. Ford was too smart and too shrewd to ignore customers or to act like a tone-deaf, singularly gifted inventor. He knew his audience – and this insight drove him to find ways to design a process that enabled the vision of an affordable car for the masses. The key to success and good design that wins in the market: knowing your audience.

If you give people a chance – and also employ formal discovery, ideation, and brainstorming processes and methods – they can help your company define the real problems in the market. You have to let consumers or customers (if you are a B2B company) co-create with you to identify the unmet needs and their real desires. After you understand their world and their perspectives, you can validate these findings with a mix of empirical, observational, and even intuitive modes and methods.

The real key to creating a disruptive, breakthrough innovation is discernment. By knowing the context of the people in the market, you know the gaps. In these gaps dwell the seeds of future market leadership.

The issue is one of orientation. If you approach an innovation project or a venture with a rigid, fixed notion of what the market needs, and you have not actually bothered to check with the market, you have paid a great disrespect. You have also created a wall between you and reality. You are creating in a vacuum.

Consumer or customer insights can help your company define the real needs and design a wildly new solution that solves a human problem.

So, if you walk into a new product meeting and the pipeline manager begins by saying “Henry Ford said … ,” just laugh, tell him or her that you find the brazen notion amusing and you appreciate the creative thrust that birthed the product concept; however, we need to test the need and validate that it is a problem the market will pay for.

Here, your customers can give you visceral context of what the market will or will not accept. Letting them back up into problem solving around the market need will give you many more product concepts.

A few of these ideas may be pure gold.

Next Step, Innovate the Open Young Minds

Our last Let’s Grow column focused on an outgrowth of our efforts with some sharp peers, the Memphis Innovation Bootcamp.

One objective of the Bootcamp is to build a community of innovators. The more we socialize these methods and tools, the larger the social and business problems can be met with creativity, empathy, and the widest range of possible solutions.

Thus far, we have held mini bootcamps with companies, university and college students, and non-profits. The number of innovators is growing; however, the impact—thus far—is limited to product development and a little bit of city planning, thanks to our peers at the Memphis Mayor’s Innovation Delivery Team.

No offense, but it is an almost insurmountable challenge to open the minds of career-track, socially-conditioned professionals to see the city through the lens of pure possibility. To remedy this business-centric application of innovation, we are making strides to take the Bootcamp to high schools, both public and private.

If we can teach Design Thinking to the emerging generation it will achieve many benefits, including: stopping the brain drain from the region, mixing multi-generational teams of volunteers working together to make the region a healthier and more vibrant community, seeing the region with eyes of potential, stimulating a culture renaissance, and, most important, teaching creativity and critical thinking to the generation who will inherit Memphis.

The impact of design thinking in education has two overarching, positive benefits: First, it insists upon a multi-disciplinary approach—design thinking demonstrates that bringing together seemingly disparate perspectives can be key to discovering effective solutions. Therefore, this approach shows students that the most complex problems are best solved using an interdisciplinary approach.

Second, the power of collaborating with others: design thinking emphasizes that through collaboration (rather than cut-throat competition) is critical to the learning and problem solving process—a mindset that will be valuable to their scholarly, professional, and personal lives.

But the real benefit is teaching the power of empathy with others. Design thinking teaches students that the best solutions are empathy-driven and created for real people with real problems. By understanding that an answer to a problem is only as good as the user finds it to be, students understand that solutions that really connect to others are more valuable than solely empirical or logic-based problem solving methodologies taught today.

The world is what we make it. Teaching students empathy, collaboration, and methods for being cunningly creative will empower the city for generations to come and inspire all of us to make it a better place instead of merely accepting the status quo as is.

Innovation, as a discipline, tends to be special assignment work that is reserved for the creative hotshots, iconoclasts, those in hot spots like Palo Alto, or on an esteemed university campus, such as M.I.T. Yet, the lack of a real practice of innovation cripples businesses and communities. The dirty secret is that anyone can do it with a little training.

Another secret is that innovation work and its methods are not competitive; rather, as a model, innovation holds the very keys to a collaborative, sustainable future for companies, non-profits, cities, and individuals. You just have to do it. Not talk about it, read about it, or speculate, but do. Action wins.

To this end, several peers in the community who are passionate about Innovation and its positive impact on business and the social sector started meeting to share their passion. The natural outgrowth was the Memphis Innovation Bootcamp. Organizations on the founding team included Merck, FedEx, University of Memphis, and the Southern Growth Studio.

The Design Thinking methods were adapted from Stanford’s D. School. MIB is a three-day, intensive, hands-on introduction to the latest concepts in design thinking and innovation. We have held two sessions, founded an advisory board, and are building up an infrastructure of innovators who can get behind projects that make the region a better place. MIB is a three-day, intensive, hands-on introduction to the latest concepts in design thinking and innovation.

Mission of MIB

Create a network of innovators who produce human-centered solutions that positively transform lives, communities, and businesses.

Approach

MIB – A 3 day hands-on, real-world, exciting, transformative immersion experience that imparts application-ready design thinking capability.

MIB Connect – MIB connects local businesses, organizations and governments with local and global resources, to establish a network of robust Design Thinking programs.

MIB Engage – MIB staff engages with a select group of local organizations to impact the community and help establish Design Thinking capability.

Think of it as a Memphis Innovation Revolution or innovation for the rest of us.

Shift Things Around

When leading a series of innovation workshops in our home town for the Mayor’s Innovation Delivery Team with division leaders at Memphis’ City Hall, our task was steep: change long-standing behavior patterns. Turn doers into innovators. Have proven professionals who are deeply imbedded in their roles get out of their current paradigm and empathize with the community and citizens they serve. Break the cognitive lock created by doing the same thing every day and see the city with fresh eyes.

While we created several fast-paced and role-playing exercises to accomplish this goal, we wanted to evoke the sense that this was not business as usual from the outset.

We arrived early to plan for the session. The space itself was set up for parliamentary-style debates. On the wall were daunting signs that read, “DO NOT MOVE THE FURNITURE.” There was no choice but to break the mandate of City Hall.

To shift the roles, we had to shift the rules, respectfully and playfully. To change the space is to change the poetics of space. By altering the configuration of the room, we alter the expectations of the participants. Everything shifts.

When the division leaders entered and saw a space that once was set up for debate and competition now set up for playful collaboration and exploration, it was a clear sign that this would be not only a meeting, but an experience—and it was. Even the mayor stopped by and reveled in the workshop’s findings and the animated level of potential in the room. The participants were energized, engaged, and an active, crucial part of the creative problem solving process.

The lesson: shift things around. Move people into new roles for a day or just a meeting. Move furniture. Change desks for a day. Experiment with breaking set patterns, for a limited time. Not only is it re-energizing for the participants, but it also yields beneficial insights that might grow a business or make the world a better place.

Turning Good Ideas into Great Products

One innovation method is to invite customers (in a B-2-B situation) or consumers (in a B-2-C scenario) into the creative process with you. Here, they will ideate, workshop concepts that arise in the session, augment concepts provided for them, and create some new product or service ideas that do not yet exist.

There are several forms of co-creation, and I will sketch out two here, as demonstrations of the method.

Category co-creation is where you explore categories and have a team explore and solve a problem from the widest frame possible, such as how do things in nature carry water. While it may sound unwieldy, such an exercise can unfetter the minds of engineers and product managers in the beverage, lotion, or other related industries, resulting in a game-changing design.

Another form is concept co-creation, where you provide very crude (i.e., hand-drawn) concepts of new ways to approach an old problem and allow people to dialogue, and draw what would make this a better solution for them. This exercise can be used not only for hard products, but also for service experiences. In fact, Mayo Clinic used this method to great effect when redesigning their patient experience.

The premise of co-creation is to break the force-feeding “I like” and “I don’t like” ratings of traditional market research. By inviting real users to create with you – and by often making real-time feedback on prototypes, companies can keep their hands on the pulse of what moves and inspires the people who use their products and services.

The real value of co-creation is the difference of having people rate a good idea and inviting relevant users into the alchemical process of working together to make a good idea into a breakthrough market opportunity. Co-creation helps to refine the working assumptions and hunches in the product design process, and the method also helps weed out pet ideas of the internal stakeholders, before they bomb in the market. By collaborating with the people for whom the solution is being designed, you get to a solution faster and often with more elegance.

While a lot of ideation work happens before the co-creation session, you also need to know that you may not get “the answer” in the session; however, you will gain deep insight, get real market feedback, and reframe the problem you are trying to solve.

Co-creation sessions add multiple points of value. Often, they unlock the code of growth that can make your company a category leader.

Beyond the Brainstorm

As a critical phase of any innovation project, ideation brings the generative possibilities to life. While there are similarities with traditional brainstorming, there are also some key differences. Let’s explore both.

Both brainstorming and ideation are processes invented to create new valuable ideas, perspectives, concepts, and insights, and both are methods for envisioning new frameworks and systemic problem solving.

Both can be useful in every type of business, in the non-profit world, and in the public and social sectors. Both fall in the category of creative processes, though in fact they both are creative and scientific, just not linear.

Ideation and brainstorming share some ground rules (generate as many ideas as possible, do not classify them at this stage as good or bad, one conversation at a time, for example). They share some exercises, such as Worst Idea Ever, leaving your day-job role out of the room, clustering, and more. They share many similar rules, courtesies, tactics, exercises, methods, and objectives.

Ideation, however, is not merely an eloquent variation of time-tested brainstorming. While brainstorming uses a variety of exercises to unlock new thinking about old subjects—and follows a trajectory of immersion, incubation, and insight generation – ideation is more visionary in nature, seeking to see and discern solutions for problems that are not yet defined in many cases.

Ideation also uses a variety of methods to reframe the fundamental mental model of a subject—think of seeing the same thing from different lenses—in order to see it anew. The concept of Sprints also stimulates the ideation session and also helps focus the intended scope within the parameters of a set time. Many of these sprints have built-in methods of building on other ideas and concepts inherent in the process.

An Ideation Exercise

One generative exercise for any CPG company to explore growing market share is hold a session where a team role-plays a wide array of alternative revenue models for a particular brand.

As far as the ground rules for this ideation session, any ideas should be welcomed—and the cultural antibodies of HOW WE HAVE ALWAYS DONE THINGS need to be silenced. This session will not only challenge your existing model and inspire new, profitable thinking, but will also unlock new avenues of growth the existing paradigm of doing business usually will not allow considering.

We know what you’re thinking: “our whole business is built around creating products and distributing them in certain channels by set, predictable methods.” Don’t worry. The feasibility of enacting one or more of these new growth areas can be vetted rigorously after the session. This workshop is for creating and surfeiting desirability.

Here are the eight revenue models to explore:

 

  1. Unit Sales
  2. Ad Fees
  3. Franchise Fees
  4. Utility Fees
  5. Subscription Fees
  6. Transaction Fees
  7. Professional Fees
  8. License Fees

 

Each of the eight models offers a multitude of ways to create sales or fees. Even thinking about your current model, take Unit Sales for example, with uninhibited gusto can lead you to discover new ways to drive sales, such as selling in different channels, creating a premium niche, displaying in different categories or departments, etc.

Once you have all of the output of the revenue model innovation exercise, your team can discern the most probable means to augment your existing revenue model. Whether the session yields a dramatic breakthrough or simply incremental growth that increases sales and brand value, this exercise is a worthwhile and cost-effective method of realizing more value within your current portfolio.

 

The Gold Left on the Table

We always feel badly for clients of a full-cycle innovation project. After the many ideation and co-creation sessions, there are far too many viable concepts to pursue. In many cases, millions of dollars of market expansion, new products with tested, validated appeal, and new licensing opportunities get swept aside just because there are too many possibilities.

While we have formulas for figuring out the right mix for a product line portfolio, far too many concepts never get their stage time on the market.

Sometimes the products would transform the business from selling in one channel to selling in a different one. Other times a service brand could enter the market selling a hard product. Yet other times it is a revolution to a business model with investment risks—for example, a product-based company had a viable and feasible way to pilot test a service-based store that sold products. This move could have been the beginning to a franchising event that would have the potential to more than triple the growth. In another case a strong licensing partner could have taken a whole suite of new, branded products to a new market.

In all of these cases, gold is left on the table. All of the examples above hail from the myriad of our client mix, but it could equally well represent any firm with a serious innovation discipline.

Here’s the question: who is responsible for the gold left on the table, the aftermarket of valuable ideas? Because if no one is, they will wither away in a Final Report and your organization will never harvest the total value of its innovation efforts.

Should Innovation-centric firms create a new role? A Gold Sweeper. This person would work with all the various departments to see that the most viable ideas get the stage time and consideration not allotted at most organizations. Furthermore, they can formally document all of the gold left on the table.

The amount of value that never sees the light of day can be the catalytic driver of growth, if there is a process and person dedicated to seeing tested and viable concepts make it to the market.

Foresight is Better than Insight.

Given advances in market research, innovation methods, and data analysis, insights should aim for being less descriptive and more predictive.

The highest and best value of business is to find new opportunities and plug into emerging trends, rather than make deeper sense of what already exists. These envisioning roles and departments should be renamed the Foresight department rather than Insight.

Insight is valuable, no doubt, but in our era of data dashboards and operational excellence, any analyst can provide a snapshot of revenue, market penetration, inventory, performance, project progress with the click of a mouse. Even slight forecasting, such as revenue projections with a known product or service, can be handled as a basic descriptive budgeting exercise.

Giving a description of what is is simply a matter of good business practice today. Insightful, but nothing special.

What really levers growth is being able to discern unmet needs in the market and shape shifting the business model and operations of an organization enough to welcome a burgeoning opportunity.

If business really exists to bring value to its shareholders and customers, then it has a moral imperative that they do two things at the same time.

One: Attain operational excellence and be able to describe what is happening at any moment in the lifecycle of the firm. The ability to extract meaningful and actionable insight from the data on operations, cash position, profit and loss, sales, marketing, and even aspects of the culture is paramount for success. Businesses must be conscious of how well every factor is mapping toward their strategic goals, budgets, and forecasts.

Two: Employ human-centric foresight generating practices such as Design Thinking and map out Sustaining, Disruptive, and Breakthrough innovations to gain or maintain a leadership position in the categories where you do business.

While insight is critical, without foresight a business will not sustain its own growth and will wither while trying to wrangle the last drops of life out of the entity.

Insights fuel management decisions and aid smart marketing. Foresight creates leaders who define what a category means. You need both or risk being operationally near- or far-sighted; however, foresight appears to be in short supply.

Innovation Risks Bring Rewards

Suppose we told you that you could spend $185,000 and turn it into $25 million or more in a few years. You would accuse us of phishing, an investment scam, or dismiss the proposition as foolhardy. Yet, these are the types of returns we see from clients and those in the world who invest in breakthrough innovation at their companies.

Whether it is a product firm, a service organization, or a business-to-business company, these types of return on investment take on nominal risk and garner a large reward. This risk: an unblinking willingness to do something outside of your current operating and business models, and a small amount of capital and talent.

To explore, take one half of an internal resource and tell them to choose an innovation firm for a vexing challenge the organization has not been able to solve to date. The innovation firm will cost between an estimated $75,000 and $125,000 for the entire challenge. Then, recruit a variety of internal people to serve on the project team, giving them about 20 to 25 percent of their time and a small travel budget, if needed.

Design an eight- to 12-week innovation sprint. During the first week, the devoted internal resource and the innovation firm will create a project plan, kick off the project team, and immerse themselves in the value-creating journey.

The first step is to design the challenge carefully – the devoted half resource and Innovation Firm can handle this task. Then, take the project team into the field to actually talk with those for whom they will design a solution. Call this the Empathy phase. This deep qualitative work, done by a mix of roles (managers, sales, RnD, IT, etc.) helps in several, key ways: breaking the deadlock of rushing to product development with someone’s pet idea and also understanding how the organization’s creations impact the real lives of people. This is human-to-human business. After many interviews are collected, the team debriefs the interviews and develops themes.

Next, the problem is defined.

A portfolio of ideas will be generated, vetted, refined, and tested again. In this process, the testing cycles cost less than large batches of quantitative modeling, and are typically more on target. After a portfolio of concepts has been through this cycle three or four times, you can spend the remaining time writing a business case.

From Swiffer to the Spin toothbrush to the Dirt Devil to children’s CT scanning devices to better treatment at the Cleveland Clinic, this radical investment story is similar. But it comes with a warning.

If you are not allocating a tiny portion of your overall spending on innovation, your competition probably is. With their additional $25 million, they will be able to buy you at the fire sale.

Use Your Senses.

Design Thinking serves as a valuable tool for defining problems, exploring core empathy with customers, and discovering new, surprising, and game-changing innovations in products, services, and experiences.

However, Design Thinking has its limits, the core shortcoming being that it uses only one of the five senses and other ways of knowing as the primary mode of creation. Because Design Thinking came out of the design and engineering world, the solutions tend to be visual.

There are more modes of creation and knowing, which allow different styles of thinkers to fully participate in innovation projects. The world of innovation needs to widen its dominant modes of discovery to include inventions that present themselves in ways other than visual.

The various forms of clairvoyance provide new methods of ideation and conceptual thinking. We recommend exploring at the idea generating stage first with each mode. You never know what mode may crack the code of growth and provide real value to your business.

Keep in mind that, in the ideation phase, a basic download has already occurred and we seek new ideas, which is more of an art than a science. Later in the process, we apply the critical facilities in the Validation phase of the project.

Here is a short list of some of the non-visual sensory modes:

Feeling/Touching: Clairsentience. Here, a person acquires insight primarily by feeling. Kinesthetic learners thrive when they can feel an idea or touch a concept, making creation a “hands-on” experience. Actually doing an activity can be the easiest way for them to learn. Mapping out an experience, as in asking “how does it feel when … ?”, can make the feeling mode valuable and immediate. After all, innovations make tired categories easier to use and create a better experience. Sometimes, the way the category should feel arises in these sessions – and serves as a tuning fork for the entire project lifecycle.

Hearing/Listening: Clairaudience. In this mode, insights form first as a sound – sometimes a whole word and sometimes a hum or a syllable – and people who excel in this style discern deeply, listening with a “third ear” attuned to auditory impressions. We recommend a Deep Listening session – where we seek to define the tone and pitch of the category of the innovation. Many ideas spring out from these “seed syllables.”

Smelling: Clairalience. The olfactory senses have long been called the gateway of the soul. How should a product or place smell – and how do you map out the associations that arise in the process. How does a poorly performing category smell now, whether it’s a store, a doctor’s office, or a restaurant. Smart companies, like Westin Hotels, know the value of defining a particular scent.

Knowing: Claircognizance. The hunch. Sometimes you know something from the gut. This form of knowledge is an intuitive download. Many business people, artists, and scientists have written about intuition. After an immersion into a problem, practice ways to tap the intuition of the team members. Acknowledge the knowing as it presents itself to group members in a way that is non-judgmental. As Dr. Norman Sheely says, “Every invention is an intuitive download.” Einstein agrees: “The intuitive mind is a sacred gift.”

Tasting: Clairgustance. In this mode, you turn on your taste buds – and taste a substance without putting anything in your mouth. Popular culture has a keen expression: “That left a bad taste in my mouth.” Woe be on the company that leaves a bad taste in a customer’s mouth. How should an experience taste? That is the question.

Design Thinking works for visual thinkers, but it is a big world with a complex range of senses. All of these senses can be harnessed to create breakthrough innovations.

Trendcasting and Innovation

Did you wake up this morning to realize that the world has changed and your business has not changed with it? Many companies of all sizes are dying a slow death in a saturated market with outdated business models. They fail to get out ahead of what’s next.

Business leaders commonly attribute growth issues to a stagnant market or corporate dependency on an inferior product. These are excuses – the heart of the issue is a short-term and reactive corporate mindset. The antidote is to install a culture of proactive forethought to replace the more typical reactive market strategies.

We encourage our clients to take up trendcasting – the practice of tracking and forecasting global trends that will affect their business. This relatively new term has been used mostly for tracking and predicting consumer behavior, but we believe that it is also useful for studying industries and a productive innovation tool for those seeking growth and transformation.

To do this, you should task a group of employees with professionally diverse backgrounds to become a band of trend-spotters and form a think tank of sorts within the company. The team’s objective is to uncover emerging trends that are three to five years out. To start, they have to take a snapshot of where things are today so that they have defined a baseline for future trends. Done right, this is not just a research effort to read analyst reports and round up their assessment of existing trends. The idea is to see what others do not and to predict the next wave of trends. Have the team investigate the macroeconomic factors at work in both the global economy and the industry. They should also study the regulations underway and those that might come down the pike. Once they have a handle on current established trends, they can begin to evaluate all of the possible impacts that might set off new trends.

At this point, it may be helpful to bring in a third party to facilitate the discussion and prompt the team to stretch their thinking. Industry experience and basic human cognitive bias will cloud their ability to see beyond what happened in the past and project into a new and unexpected future.

Be on the lookout for fads, a pet rock-like flash in the pan. It is important to define a set of indicators and parameters to evaluate the size, impact, and likelihood of the trend materializing. This will give the team a framework to assess risk and determine if the prospective trend is just an element to be factored in to the strategy or whether it is significant enough to warrant an innovation effort.

Unfortunately, there is no magic formula that validates trends with 100 percent certainty. However, quantitative models that assess probability and risk are useful tools when considering investment. Pinpointing emerging trends is critical to defining the boundaries for a successful innovation effort. If you want to grow through innovation, you must first understand existing trends and then trendcast to discover what might be next.