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Ethnography Alone Cannot Generate Transformative Insights

Consumer anthropology offers such refreshing insights into the marketplace, re-humanizing the relationship between people, things and stores in very profound and moving ways. This movement also has helped stores get their noses out of spreadsheet and theories and keep their eye on the customer experience.

Whether in-store or online, this ethnographic sensitivity has positively been leveraged to optimize the present experience or redeem oversights and chokepoints of history. This type of insight begins by taking an objective snapshot of the experience, detaching and seeing how to make them relatively, immediately better.

All of these good things come from the business discipline of consumer ethnography. These changes make customers happier and help drive more sales per square foot (or per pixel): a win-win.

Yet, time and time again, we have seen clients who tried to use a pure consumer ethnographic approach to their innovation programs fail. Why? What happened?

The purpose of innovation and the job of pure ethnography are at odds. The purpose of innovation is to generate new value. You accomplish this objective with foresight, creativity and fresh thinking. The job of ethnography is to give insights about the past or present. Therefore, innovation aims for the future, and ethnography strives to stay rooted into either the past or the present. Simply put, it is a different lens, different way of seeing.

This is why organizations that first try design thinking often end up with mediocre results in a program. They approach the first two phases of the process (empathy and define) with an academically rigorous approach to consumer behavior. This primary field data is potent, but only half of the story.

The other half revolves around a mix of intention, strategic prowess, ambition, business acumen, a growth instinct and the ability to trend cast into the future. The data from secondary sources and indirect competitive trends and the exercises around new channels, new markets and brand elasticity fuel the conversation, insisting that it is well defined, vigorously focused and ultimately measurable.

This other half can be defined as the project (or business) objective. Pure ethnographic work without this other half to temper it lacks a forward thrust needed to truly innovate.

What is needed for a successful innovation program is a mix, a vital intersection of ethnographic field insights with an overarching commercial objective. This marriage of openness to the full context of history and the present moment to delivering new ways to solve old problems under a specific banner is the archway of profundity, a vast pipeline of possible solutions.

Pure ethnography alone will not get you to the point of having a transformative business or organization or a wide-ranging portfolio of value-generating concepts. On the flip side, having a business objective and no deep context of the market also means having a limited sight of vision of the opportunities. Together, at the intersection of human context and market focus, exists the key that unlocks real growth.

Talent-Supporting Structures

A fallacy about organizational management prevents many firms from getting the best out of their best people: the notion that everyone who excels in their jobs will eventually become managers, directors, etc. True, some may have a talent for management, while others flourish in active roles that have nothing to do with managing.

Yet, the “up or out” paradigm that exists in the corporate world cripples the growth trajectory – and a life of mastery that adds value to the firm – of key talent who simply love what they do.

So many companies accept this status quo assumption unthinkingly. Certainly there are exceptions, but they seem too few. We decided to experiment at the Southern Growth Studio.

Many of our best producers have no intention of formally managing. Several innovation practitioners in particular plan to “do the work, get deeper into it, rather than talk about it to death.” As managing partner, I look at them as expert craftspeople and we are blessed (as we say down here) to have them on the team.

The most critical factor is that they, the experts, manage themselves. Account teams use their skills to set a project framework and scope, a budget and to handle client relationships, but do not directly manage these specialists.

To retain this talent, we are developing career paths that include no expectations of management for growth at the firm. Furthermore, we are willing to provide economic incentives for continued service at a high performance rate, including phantom equity, bonuses and generous commission for work they bring into the Studio. These experts are offered ongoing training of their choosing.

Finally, while management and leadership are worthy and noble roles in the health of an organization, it is in our culture to have a very flat structure, which helps stimulate collaboration and innovative thinking in all we undertake. We need rarified skills and passionate talent obsessed with the work itself to create world-class work.

Everyone can chart their own career path, either as an expert craftsperson or a manager. The pay scale is the same if not slanted in favor of the really expert craftspeople. Talent is harder to find than a trained manager.

As the globe moves further away from the Industrial Revolution and deeper into the Creative Economy, the question of how we remunerate our specialists is an issue every organization will have to answer. In the Creative Economy, talent is the highest currency.

If you have any experience you can share, please do. We are eager to learn more about this emerging paradigm of work.

Spotting Your Organizations Orthodoxies

Often the very factors of success around which you launch, build, and manage an organization can turn on you like a venomous snake. The framework that worked so well, for so long, now limits the growth of the place. At some points the factors have turned into choke points.

But your organization is geared by its way of doing things, its orthodoxies. So you keep pushing harder, doing more of the same, denying new competitive threats and emerging trends.

You never make the decision to cannibalize your own leadership, like Gillette, and yet new, disruptive threats emerge onto the landscape, like the Dollar Shave Club to extend the example.

Remember the cautionary tale of DEC.

Started in the late 1950s and peaking in the 1980s, DEC was a $14 billion business, one of the most profitable companies in America. They were expected to usher in the age of real computing. But their leader, Ken Olsen, was trend-resistant, and even worse, an autocrat. He didn’t believe PCs would have any place in business and were nothing more than toys for playing video games. By 1992, the board asked him to resign, the company continued to lose billions and was ultimately dismantled – bits and pieces going to various other companies.

They were stuck, rigidly fixed, inside an orthodox. So, what is an orthodoxy? A deeply or widely held belief, self-imposed boundary or rule. Orthodoxies often begin as rules of the game developed by successful pioneers in the business. They represent a mindset that was once highly effective to business growth, but no longer has long-term value.

Look for orthodoxies. If your organization can spot and name them, they can be turned into real value.

Exposing orthodoxies helps reveal existing assumptions, blind spots, and limiting behaviors. Challenging or overturning them can lead to new opportunities from looking at our business model in a new way.

Spot orthodoxies in these areas: Who is our customer? What form the product or service should be? How we go to market? Who are competitors are? The way we decide on new products and pricing? How we do things around here, the [fill in the blank] way.

Like a 5-year-old asking “why” five times, ask about these long-running orthodoxies. They are not, nor do they have to be, absolutes of reality. They can change.

Here are three simple questions you can ask to spot and begin to overturn orthodoxies:

1. What are things you never hear anyone say about our organization?

2. What if Disney bought us to enter this business? What would they change and how?

3. What opportunities have we missed because of orthodoxies?

List them. List the vulnerabilities that were exposed. Then, come up with five ways to activate new thinking, new actions and new value that were limited by the identified orthodoxy.

 

To see the Dollar Shave Club’s disruptive strategy in action, visit  www.dollarshaveclub.com.

Once Upon a Time in Business

In business and daily life, we are wired for stories as a species. One creation myth begins by saying God created humans because he needed good stories. Stories bind us together, creating an emotionally connected narrative through which we make sense of the world. I want to share a Here’s What I Love About My Career story with you.

The background is a co-creation session where we were exploring grooming products. The third group consisted of Extreme Men, masculine dudes: Iron men, Paratroopers, Special Forces, and one stereotypical Hipster. From his wave-like, flowing beard to his shaved head and skullcap, this Hipster was the rouge element in the session. He reeked of marijuana, was a few minutes late, and made sure to point out many of his tattoos. He also talked about his job a lot, a clerk in a Vape store.

As we worked through concepts and conversation, he was quick to proclaim his Hipster creed. For example, he rebelled vehemently against anything that required recharging or refilling, preferring the virtues of a straight razor and shaving foam. This quest for authenticity was not shared by the others, who valued efficiency, a rewarding sensory experience, and convenience. After saying “thank you for the social theory, but please do not assume your view of reality is reality for everyone else in the room” and respectfully stopping his monologue, we moved to the next concept.

Without missing a beat, he emoted, “Now, this one, this one is something I’d love!” He continued, “guys, I have a confession to make. I have a hairy back and this would make it much easier for me to reach.” Then he shared something so endearing, it softened the hearts of hardened men: “My mom used to shave it for me. Now, my girlfriend does.”

One of the special forces members stood up, banged once on the table, pointed, and praised: “she’s a keeper!” The room broke out in spontaneous applause.

This very human story serves as a testament as to the innate power of people to support and encourage one another. At this moment I squealed like a happy pig. Joy infused the air. Wisdom was being shared from one tribe to another. Bonds were forming. Kindness was overflowing. In a nanosecond, a completive instinct rang out and a voice broke within: “what a blessing and honor to do this work.” At root the session wasn’t about the product concepts, but humanity’s essential unity. One subject was just a means to getting through the illusory veil of separateness.

Then, the analytical side of me tapped its imaginary pencil on the conference room table, indicating that it was time to get back to work, tally up the votes on the concept, foster conversation around what changes my new friends would make to the prototype, and lead a discussion around pricing.

Stories are the taproot of humanity. They define culture. What stories are you gathering and sharing at your business? How do they transform you personally and your organization for the better?

Ethnography Alone Cannot Generate Transformative Insights

Consumer anthropology offers such refreshing insights into the marketplace, re-humanizing the relationship between people, things and stores in very profound and moving ways. This movement also has helped stores get their noses out of spreadsheet and theories and keep their eye on the customer experience.

Whether in-store or online, this ethnographic sensitivity has positively been leveraged to optimize the present experience or redeem oversights and chokepoints of history. This type of insight begins by taking an objective snapshot of the experience, detaching and seeing how to make them relatively, immediately better.

All of these good things come from the business discipline of consumer ethnography. These changes make customers happier and help drive more sales per square foot (or per pixel): a win-win.

Yet, time and time again, we have seen clients who tried to use a pure consumer ethnographic approach to their innovation programs fail. Why? What happened?

The purpose of innovation and the job of pure ethnography are at odds. The purpose of innovation is to generate new value. You accomplish this objective with foresight, creativity and fresh thinking. The job of ethnography is to give insights about the past or present. Therefore, innovation aims for the future, and ethnography strives to stay rooted into either the past or the present. Simply put, it is a different lens, different way of seeing.

This is why organizations that first try design thinking often end up with mediocre results in a program. They approach the first two phases of the process (empathy and define) with an academically rigorous approach to consumer behavior. This primary field data is potent, but only half of the story.

The other half revolves around a mix of intention, strategic prowess, ambition, business acumen, a growth instinct and the ability to trend cast into the future. The data from secondary sources and indirect competitive trends and the exercises around new channels, new markets and brand elasticity fuel the conversation, insisting that it is well defined, vigorously focused and ultimately measurable.

This other half can be defined as the project (or business) objective. Pure ethnographic work without this other half to temper it lacks a forward thrust needed to truly innovate.

What is needed for a successful innovation program is a mix, a vital intersection of ethnographic field insights with an overarching commercial objective. This marriage of openness to the full context of history and the present moment to delivering new ways to solve old problems under a specific banner is the archway of profundity, a vast pipeline of possible solutions.

Pure ethnography alone will not get you to the point of having a transformative business or organization or a wide-ranging portfolio of value-generating concepts. On the flip side, having a business objective and no deep context of the market also means having a limited sight of vision of the opportunities. Together, at the intersection of human context and market focus, exists the key that unlocks real growth.

Equity Firms Should Leverage Innovation

On the strategy side of our business, we work with many private equity-backed companies. We get called in when the growth trajectory and investment thesis aren’t being realized as projected.

We complete a diagnosis, based on a holistic evaluation of the market, competition, culture, marketing and operations of the firm. Applying a variety of in-depth primary and secondary forms of research and analysis, we develop a roadmap of real, organic growth.

Given the left-brain methods, a lexicon used by the best business schools and the Harvard Business Review, the analytic rigor and accurate modeling of probable growth, down to the intoxicating bar graphs and spreadsheets filed with the right proxies, we earn the trust of the company’s board – usually comprised of their biggest investors, associates in a private equity firm – founders and leaders.

They know these idioms, share a level of comfort with the form of the presentation, and find solace in the fact that we use our mastery of this business school approach to management consulting. Without fail, those who follow our advice perform better in the market.

Then, we mention the “I” word and it is as if we are insulted their mothers; the conversation is over. Innovation, too often misunderstood, is not a disease, nor is it an airy-fairy notion. In fact, private equity firms should place an imperative of genuine innovation on the companies into which they invest, as it is a real, repeatable and cost-efficient lever of top-line revenue generation.

Maybe it is because innovation started in the design and engineering fields, rather than part of the core B-school business management or finance tracks that imprinted their thinking about business?

Maybe it is a shared sense of risk-aversion that wards off anything outside of an industrial-revolution era sense of business practices that people prone to PE work may exemplify? Maybe they just haven’t seen the real and tangible benefits of a disciplined innovation program and its bounty firsthand?

Whatever the reasons for the blank stares and lack of interest in innovation by many PE firms we have met around the globe, we predict that once one major PE firm retains an innovation firm for its portfolio and sees the incremental, breakthrough and disruptive – and massive – growth, that innovation will become a core engine of growth in this sector.

PE firms are slow to change behavior, given their cautious worldview and the gravity of their investment; however, once they find something that works, the whole industry changes course.

Given that several established innovation methodologies are now being taught in leading business schools – from MIT to Stanford to Rotman and others – and that book after book about market leaders who use these techniques are being digested, it is just a matter of time. Once private equity groups understand how innovation works and how it can be used to inspire transformative growth, innovation will be one of the foremost toolkits in a segment that ignores its power.

Culture Trumps Concepts: Innovation Necessity

When many people hear the word “Innovation” they think of a service that created a category: Xerox or FedEx. Or, they think of one that made bold, brilliant moves to earn a leadership position in an emerging space: Google, Facebook, Uber and Airbnb.

They may claim that innovation is one of their organization’s core values or core pillars, but no one there can quite articulate how their formal innovation programs works.

Or, you hear bitterness in their voice: “They tried Innovation, once.” This is a composite sketch of many similar stories.

They procured modest funding, were given some time away from their other role, and were charged to bring back something big, something disruptive. On the organization’s dime they went to a few conferences, read a few books, even took a workshop. By retooling themselves they reoriented how they see the business, their mental model of reality. Worlds of possibilities began to open to them – new products, services, adaptations to the business model and, yes, a new platform that would position the organization for optimum growth fueled by radically disrupting the industry.

Rife with potential and inspired by this license to innovate, they morphed together several methods and tools. They got fresh, first-hand insights from the people who use their products and services. They enrolled a few others to join this positive, creative revolution inside the company. The team was electrified, intent on creating not only some cool things, but by the prospect of really helping people have a great experience with their company’s products and services.

The initial business case seemed irrefutable. With the zeal of a business prophet a presentation was given to senior leadership. A portfolio of concepts that could, with modest investment, change the course of the organization for the better were ready to implement.

Then, all of the momentum crashed into a wall. “We’d like to thank you and your team for this new thinking,” says one executive. “We’ve invested a lot into this program, but now is just not the time to actually try these ideas in the market.”

“From this point, just go back to your former role full-time,” says the crestfallen one’s director.

From this point in the organization’s history, this is the perception of Innovation – a few rebel cells in an otherwise orderly body. Yet in reality, the concepts were valid, tethered to the larger context of the company’s identity and strategy. Generating valuable ideas was not the problem.

If you want a value-generating innovation program, you have to first craft a culture that accepts innovation before the commission of a project. Start with the executive team.

Culture first, then concepts – otherwise, you’ll have a business that thinks it has checked the Innovation Box, proven it’s just a fad, and gets back to the same old things, a calcifying culture.

Blind Spots, Objective Leadership & the Dead

“Once in a while you get shown the light/In the strangest of places/If you look at it right” – The Grateful Dead

 

To celebrate the iconic lifestyle brand of the Grateful Dead and their recent sold out 50th anniversary reunion stadium run, let’s talk about vision and its shadow side, blind spots.

 

Vision allows organizations the most competitive, legal advantage, perspective – perspective on the market, cultural and economic trends, and on itself. Perspective is the most rare and rarified tools of great leaders. The ability to zoom in and zoom out and see issues from every possible side, like lenses in a prism, allows objectivity on issues that defy habit, compulsion and fear.

 

Real vision is both visionary and pragmatic. While you survey the range of possible approaches, you scan for the most winning and advantageous opportunity with full knowledge of the risks and rewards.

 

Think of this level of leadership vision as being fully conscious. Such leaders are too rare. In fact, you can name them there are so few, the brave women and men who start movements, change the way we live for the better and create or leapfrog an industry.

 

This type of leadership can be trained and is achievable, but most do not want to endure the rigors of such intellectual honesty, emotional vulnerability and ardor. Instead, the majority of leaders never reach their potential. As a result, their organizations do not thrive as optimally as possible.

 

So, they temper their vision and constrain the vision of those who work for them. After all, it is more comfortable to ignore blind spots and maintain tunnel vision than it is to see things as they are today and how they could be in the near future.

 

Perspective and objectivity are hard, hard work. Without an intention to be the best or a driving, demanding culture like the military, few answer their call to greatness. Instead, they waste time answering emails in meetings they didn’t need to attend, a perfect place to hide, complete with a cloak of busyness.

 

By extending vision as a metaphor, we can look at common eyesight problems and infer organizational shortcomings, a lack of authentic leadership and tensions within a culture.

 

Tunnel Vision: Reduction in vision may be called tunnel vision, which aptly describes the problem. The image is clear in the center of the visual field, but the outer edges of the range of vision are blurry.

 

Hemianopia: With hemianopia, half the field of vision is blacked out in both the eyes. There is no treatment, either medical or surgical, for improving this condition, but sometimes it improves on its own with time. Field-expanding prism lens glasses and magnifiers may help.

 

Blind Spots: A blind spot is an area of the visual field that is obscure.

 

I’ll leave the reader to connect the dots about which optic metaphor may fit the leadership of their organization, both the diagnosis and the prognosis. Know this, however, if your leaders have vision and objectivity, and can look at issues from many points of view, count your lucky stars, and be grateful you can see them.

Three Steps to Keep from Drowning in Big Data

“We have so much data, but no answers.” This phrase echoes down the halls of all of the larger clients with whom we meet. In a quantitative world, where there is every dimension of research and analysis available, unreality multiples.

 

The business world is drowning in data and, by the level of panic and anxiety, lost its rudder.

 

The ability to have machines figure out existing systems, such as playing chess or optimizing a logistics supply chain, is a great boon to humanity—and it is the role of proper and attentive management. But even the smartest predictive analytics cannot provide answers that move customers or consumers, nor can they re-imagine an industry, nor can they redesign a service experience.

 

Yet, we expect Big Data to act like Santa Claus with a Calculator, granting us every greedy wish we can conjure and to answer our unexplored and unmet needs as well.

 

We have entrusted the most ingenious and inventive humanity to a faster processor rather than to a whole-brained mix of human intuition, creativity, tempered with reason and business savvy.

 

No machine can empathize with clients and prospects. For this obvious reason, human-centric design is the foremost competitive leverage any company can employ. A machine, at the end of the day, will work off the inputs you provide, whereas real people will convey depth, feeling, trust, preference, and imagination.

 

Big data quantitative modeling has its place at the table, but don’t expect any of the “insights” to tell you how to grow, how to innovate, and how to make critical new product decisions.

 

You can drown in the ocean of big data looking for such answers. These answers will not present themselves fully as the output of a machine.

 

Therefore, ensure that these steps are part of your overall strategic process:

 

  1. Employ people who know how to interpret data on behalf of your organization. Ideally, a team of number crunchers, marketers, and social scientists should review the trends together. With this mix you can spot the trends, create concepts on how to capitalize on them, and understand some of the factors at hand. Figure out what questions to explore more deeply is the key work at this stage.
  2. Talk with consumers (customers in a B-2-B world) about the trends you are discovering. Once you have ferreted out the right questions and have some heuristics indicating a shift in buying patterns and behavior, it is best to talk to real people about the trends and how they are affecting them. Try a mix of consumer empathy intercept interviews, co-creation workshops, and group conversations about the changing landscape. Respect them. Empathize. Not force a point or agenda at this stage.
  3. Sketch new concepts, new products, and new experiences. After you break down what the data is implying from various viewpoints and get a real sense of the market, new concepts of products and services can be generated, tested, refined, then measured and brought to the market. This is a human act of creation. Getting user feedback and making adaptive revisions is part of the cycle.

 

In the wonderful, recursive, messiness of our humanity, there is an unlimited resource of creativity. Tap into it to spark something new to life.

 

Big data is a great asset, but becomes more valuable when coupled with the messy creative process that has to power to transform people and companies.

The Only Difference: Mindset

The same truths not brought into action present themselves as lessons, on-going themes. This one rings with more truth every time I encounter it. Mindset is the real pivot point, the only true sustainable, competitive advantage (other than exclusivity, which is always temporary) for organizations that want to flourish.

 

Mindset permeates corporate cultures, whole regions, and serves as a leaping off point of positive influence for social movements. Indeed, perspective is everything.

 

On a recent trip to Nashville I met with some very bright and inspired entrepreneurs, from all corners of the globe. There is a palpable buzz about town that is met with an infrastructure (co-working spaces, programs, access to capital, and a critical mass of talent). Several meetings were held in coffee shops where every table was filled with an emerging business plan or business model canvas sketches. In every part of town there are signs of resurgence: start-ups taking over old buildings and houses, creating communities, clusters of focus and energy.

 

Then, I come home and compare it to Memphis, where we have some noble efforts (Forge, Start Co., BioWorks, Co-Work space, the new Eco-System, Emerge, the Studio’s efforts, to name several), but no boiling over into a movement. The energy stays, if I am to be honest, fragmented and the same groups tussle over the same finite set of resources and talent. Most tragically, there is access to capital. Even more tragically, the mindset never gets to the point where you feel a sense of everything clustering together, converging into a cultural movement where the air seems pregnant with possibility.

 

Things just seem harder here, other than traffic. Then again, a little more traffic from more talented people moving here to start companies would not really be a notable problem.

 

Say it with me, Memphis. We can. We are outstanding. Change the mindset to one of risk taking and opportunity. Step up and invest in a local company. Get on a board and demand transformation, insist on growth and innovation. Do your part.

 

Be the growth by cultivating a growth mindset. It is a magnetizing principal. Just look at Nashville, or Austin, or Palo Alto, or what is happening in Downtown Los Vegas now. Invest your time, your talent, your energy, and your capital, but most importantly, invest your open mind to the possibility of positive change and growth. The potential is here, but it is up to you (and I mean you, personally) to manifest it. The region needs you. This is your call-to-action. Be the catalyst or we’ll all be forced to move. Create new avenues of growth. It’s all in the mind, after all.