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Great Ideas Are the Fuel of Successful Innovation

Coming up with great ideas must be a priority for companies who want to launch a continuous stream of successful new products. The better the ideas, the more likely your innovation engine will crank out winning new products.

Idea generation (ideation) is an ongoing process that needs to be designed and managed to consistently create great results. The discovery, cultivation and selection of ideas should not be left to chance and random “ah-ha” moments.

To be consistent at discovering great ideas, we need to know:

• Where to look (strategic direction: where to play and how to win).
• What to look for (important jobs people want to get done).
• How to discover and cultivate promising ideas from raw inputs into winning product concepts (an idea-to-launch framework).

Idea Exploration: Drilling for great ideas

An analogy I like to use is from the petroleum industry where they need to drill for and refine crude oil into petroleum products (e.g. gas, and heating oil). The petroleum industry doesn’t randomly drill wells around the globe in search of promising oil fields. It employs a sophisticated exploration process that identifies potential areas where it is likely to find underground oil and gas reserves.

Drilling for great ideas

Once a potential target oil field is identified, several test wells are sunk to verify the targeted field contains acceptable grade oil (desirability), that can be extracted economically (feasibility) and is of sufficient size to make the drilling venture profitable (viability).

A petroleum company would never dream of setting up an oil production field without first testing the commercial viability of the oil field under exploration. Nor should you when it comes to moving an idea into commercial development.

Ideation is an important process that makes or breaks your future

Your ideation process needs the same attention to the upfront exploration and validation process as the petroleum industry It makes no sense in exploring ideas that have no potential commercial success (commercial viability).
Nor trying to develop a product around an idea (e.g. a problem) no one cares about (desirability).

Nor committing to a development project that is outside your current and near term capabilities (feasibility).

Initial ideas are never fully formed and ready for commercialization

Like the petroleum industry, the initial ideas you uncover will be in a raw or crude state. They require refinement and experimentation before they become solid product concepts (refined ideas) that have the potential economic impact (high octane if you will) to fuel you innovation and product development engine.

The long and the short: No matter how good your innovation and product development processes are, if you feed it poor ( low octane) ideas, the innovation engine will sputter and not provide the power it needs to develop a commercially successful new product.

Initial ideas are neither good nor bad – they are just ideas

In designing an ideation process, we need to recognize that what often appears initially as a great ideas, is often misguided. And on the flipside, an idea that appears to be a weak and not interesting, can often evolve into a winning new product concept by combining and refining other elements of other ideas into a defining a winning concept.

Thus your ideation process needs to treat all raw ideas without bias. A uniform method of presenting ideas to be evaluated for go/no-go decisions, and a predictable and reliable process to refine, validate and if necessary reject ideas, as they move through the knowledge funnel form crude ideas into high octane ideas.

I recommend adapting a Uniform Concept Statement form to avoid the problem of good ideas being overlooked because they are presented poorly and/or dismissed through biased eyes. And conversely, eliminate weak or marginal ideas that are presented well and selected based on management fiat – not fact.

Initial concept statement should be short, no more than one page, and easy to understand. It should contain the following:

  • The need/pain or job to be done
    • People have problems with getting this important job done
    • Outcome expectations
      • Desired outcomes customers want to achieve.
      • Undesired outcomes customers want to avoid.
    • Context, circumstances, and challenges in getting the job done with 100% satisfaction
      • Where, when, who, what, and why, etc.
      • Barriers: Cost, time, complexity, etc.

The concept statement should be thought as a living document. Starting with the initial raw idea, and transforming and morphing into desirable and viable business opportunity as the idea is vetted and honed through the ideation and discovery process. The desired output is a high-octane product concept worthy of fueling your innovation and product development engine.

In the coming series of articles, we will drill deeper into creating a robust, reliable and predictable innovation front end (ideation and refinement process) that will improve your ability and success rate of identifying real problems that real people want solved.

In the meantime, fill it up with high test please!

Kevin

Posted in Front End of Innovation, New Product Development | Comments Off on Great Ideas Are the Fuel of Successful Innovation

The root cause of new product failures and a cure

Studies have shown that the failure rate for new products across most industries runs between 40% to 90% of the time. And most failures are due to non-technical reasons.

The root cause of product failures

According to Dr. Robert Cooper , a thought leader in product innovation,  89% of products that fail are due to non-technical reasons.  That astonishing!  But when we examine  the root causes of product failures we observe recurring themes:

The product was an undifferentiated “me-too” product

The new product provides no compelling reason for customers to switch.  People don’t like change, and they are likely to stick to what they know, unless they can see a compelling reason to change. (see my article Your New Innovation Promises to Change the World – But..)

Just take a walk through Fry’s in the Wi-Fi section and try to figure out which new wireless gizmo is right for you. You will be faced with lots of choices. But chances are you will stick with a brand you already have knowledge of and trust. Otherwise you will probably look for the best price on the hope the product does what it says it will.

The product was a solution looking for a problem.

The  marketing and development team failed to understand who and why customers would want the product. This is especially true with new technologies.  Just because the development team wanted the product, doesn’t assure that the market will agree.

Sometimes a “solution looking for a problem”  is an early market adoption issue. The ecosystem and social attitudes for the new invention to thrive isn’t there yet.

If that’s the situation, there are a set well-known strategies and tactics (game plan and plays)  companies can execute to create new markets.  It takes time and resources, but the end game can be quite rewarding when done right.

The new buzz around autonomous automobiles is a good example.  Society and the infrastructure (underlying technologies, attitudes, trust, and legal & liability policies)  aren’t ready for significant adoption yet. But the future looks promising. Though the future may look completely different though, then what we imagine it to be today.

And then there was Segway. Sure it was a cool invention, but what problem did it really solve?

It certainly didn’t  get the important job of traveling short distances in an urban environment done better than what was already available. After all, walking is a pretty compelling and affordable solution with lots of benefits including cost, simplicity and health benefits.

Nobody knew about the product – or what the product solved

The marketing team either failed to define a compelling customer value proposition (the solution looking for a problem) or lacked the marketing skills and resources to communicate the value proposition. Thus prospects never become aware of the solution that could help them get an important job done.

It’s the old “build a better mousetrap, and the world will beat a path to your door“. Maybe in Emerson’s day, this marketing strategy worked, but not today.

No problem, no profit

I believe the major reason behind high failure rates for new products is that companies don’t invest enough time and resources upfront to really understand the specific problems customers are trying to solve.

And/or they lack  a repeatable and reliable front end process that allows them to gain deep insights into the customer’s problem set, and a method to translate these insights into relevant requirements they can innovate around.

Instead the development team moves forward in launching their “promising” idea based on assumptions – versus facts obtained by real people with real problems. No wonder success rates are disproportionately low!

Jobs-to-be-done innovation framework increases your odds of success

Clayton Christensen, argues that people and companies have “jobs” that arise regularly, they look around for a product or service they can hire to help them get the job done.

“It’s the marketer’s task is to understand the job the customer wants to get done, and design products and brands that fill that need.”

Clayton Christensen

 

Increasing the odds of launching successful innovations

Jobs-to-be-done provides a broader, deeper and more external perspective of the customers problems, their desired outcomes, and circumstances that prevent customers from achieving 100% satisfaction.

When we achieve an empathetic understanding of important jobs people want to get done, we can create products that uniquely help our target customers get their important jobs done perfectly.

Using the jobs-to-be-done innovation theory as the foundation for innovation, I can guarantee your odds of launching successful new products will improve dramatically.

Remember, no problem, no profit.

Here’s to understanding what customers really want.

 

Kevin

Want to learn more about the jobs-to-be-done innovation framework?  Then check out my new book “The Innovator’s Playbook: Discovering and Transforming Great Ideas Into Breakthrough New Products.  Available on Amazon and as a PDF download.

Posted in Diffusion of Innovation, Front End of Innovation, Jobs To Be Done | Leave a comment

Your New Innovation Promises to Change the World – But Is The World Ready For Change?

You have a great new solution that you believe passionately will help people get an important job done way better than what they are achieving today.  But your new solution requires the customer to change how she is getting her job done currently. Even though she can imagine how your new innovation can make her life better, she just won’t make the leap. Why not?

The reality is adopting innovation requires behavioral change. And most people really don’t like change. We enjoy predictability and tend to stick with the tried and true way of getting things (jobs) done. It’s familiar to us, and doesn’t require us to invest time, money and effort in learning a new approach.

Innovation requires change

Adoption of innovative new ideas requires behavioral change

In John T. Gourville’s seminal article “Eager Sellers, Stony Buyers,” (HBR June 2006), he addresses two important questions:

  • Why do consumers fail to buy innovative products even when they offer distinct improvements over existing ones?
  • Why do companies invariably have more faith in new products than is warranted?

Gourville’s quick answer is:Many innovations fail because consumers irrationally overvalue the old, and companies irrationally overvalue the new.”

Economic Switching Cost Versus Behavioral Change

The economic cost of switching represents a real barrier for consumers. In fact, switching cost is a well-known strategy to lock customers into your platforms and products. Economic switching barriers include:

Transactional cost to move from one solution platform to the next: For example the activation fees consumers have to pay when they switch from one cable provider to another. And the cost of migrating data and other assets (including processes) from an old to new platform. For example upgrading an MRP platform to an ERP platform. It’s not simply a flip of a switch.

Learning cost. Learning takes time, and time cost money. Back to the MRP to ERP platform. In addition to the cost of migrating data, systems and processes also need to be re-created to take advantage of the ERP platform, including training employees on using the ERP application.

And then there are obsolescence cost. For example, switching from a PC to Mac. In addition to the learning curve and data migration, it’s likely there will be a host of applications and associated data (for example native files) people use on their PC that aren’t available on the Mac. Switching to Mac would entail a “loss” in the mind of the consumer.

Economic cost can be addressed upfront

In theory, the pure economic switching cost barrier can be addressed by providing a “rational” cost/benefit analysis. For example, a rival cable company, say Direct TV, can present a financial case as well as a set of benefits (e.g. NFL football package) that shows the economic and functional gain of switching.

But if the rational economic benefit to switch from one platform to the next isn’t substantial (Gourville argues it takes  10 x benefit for consumers to make a switch), the majority of customers won’t switch. As we shall see, there is more at stake than just the economic benefit.

The psychology of behavior change

John  Gourville argues that the psychology of behavior change explains why so many products fail. People tend to overvalue what they have, and companies overestimate the new value their solutions bring to the party. 

In economics and decision theory, loss aversion refers to people’s tendency to strongly prefer avoiding losses to acquiring gains. Most studies suggest that losses are twice as powerful, psychologically, as gains. (source: https://en.wikipedia.org/wiki/Loss_aversion)

According to the theory, when faced with alternatives (choices and decision), people respond using for basic characteristics:

1) People evaluate the attractiveness of an alternative based not on its objective, or actual value, but on its subjective value.

2) Consumers evaluate new products relative to a reference point, usually the products they already own or consume.

3) People view any improvements relative to this reference point as gains and treat all shortcomings as losses.

4) Losses have a greater impact on people than similarly sized gains (loss aversion).

Clearly the threat of losing data  and time required to migrating from one software platform to another is perceived as a huge potential loss, even in light of the potential upside in new productivity.

The “endowment effect” and “status-quo bias”

The endowment effect describes a circumstance in which an individual values something which they already own more than something which they do not yet own. Once someone owns something, he places a higher value on it than he did when he acquired it—an observation first called “the endowment effect” by Richard Thaler (circa 1980).

The endowment effect explains why people place more value in their existing solutions than the new ones. And why marketers tend to overestimate the value of their solutions due to their own endowment effect – that is to say, they have become too close to their own solution and no longer see the downside of loss customers perceive.

Status quo bias is an emotional bias; a preference for the current state of affairs. The current baseline (or status quo) is taken as a reference point, and any change from that baseline is perceived as a loss. The status quo bias is a cognitive bias for the status quo; in other words, people tend to be biased towards doing nothing or maintaining their current or previous decision.

In general, people may find themselves continuing to do something because they’re used to it, without questioning whether there might be a better way.  Or they believe the effort it requires to make the change is just too risky and expensive – relative to the gains they may achieve by switching.

Capturing value by minimizing behavior change

In the diffusion of innovation, Rogers references the attribute “compatibility” as “the degree to which an innovation is perceived as consistent with the existing values, past experiences, and needs of potential adopters.”  The further away a new innovation departs from established norms and experiences of consumers, the harder it will be to create and capture a new market.

By creating “behavioral” compatible products,  an innovator stands a greater change of launching a successful new product.  The more familiar with current practices and understanding, the more likely adoption will occur.

Of course radical breakthroughs often require significant behavioral change. If your innovation requires a radical change in consumer behavior, accept the fact that change can happen slowly. So best to plan for a long haul and build market acceptance one niche at a time starting with early adopters, and work your way towards critical mass adoption.

Here’s to changes, the only true constant in our brave new world!

Kevin

 

Posted in Diffusion of Innovation, Front End of Innovation | 1 Comment

2015 End of Year Quotes to Noodle

Hard to believe, but 2015 is almost over

Champagne splash. Bottle and cork, with christmas decoration

At the end of each year, I like to post my favorite quotes I come across that either inspired me, caused me to ponder, and/or have a laugh over.

Some of these quotes are related to innovation, discover and self-realization. While others are plain old fun and entertaining.


“I think of discoveries as sort of apples falling on your head, but those apples only set off good ideas if someone has prepared your head.”

– Angus Deaton, Economist

Insights just don’t happen, they are the products of preparation. One needs to be actively looking for insights and able to connect the dots that lead to true innovations. Here’s a related quote:

“In the fields of observation chance favors only the prepared mind.”

Louis Pasteur, the French microbiologist.

This is how Pasteur described his ability to invent and innovate across a complex set of problems. Are you and your organization prepared to innovate?

“Imagination: the power we all have to bring to mind, things that are not present.”

– Sir Kenneth Robinson

We are all gifted with the power of imagination. But sometimes our imaginations are discouraged and designed out of our work flow. “Just do your work as scripted and don’t mess with it.”  This is a sure tell-tale that innovation isn’t happening in your organization. How good are you and your organization at using your imaginative powers to create new possibilities?

“In the information era, change is the best equilibrium. No single structure is perfect and can solve all problems.”

– Jack Ma

Change is the only true constant we can rely on in the future. There will be no slowing down, change and chaos are the new realities. Designing your innovation offense (system) for agility and speed is a requirement.

“New product development isn’t Plan-Do, but Envision-Explore. Where there is no uncertainty, no risk, there is no opportunity.”

– Jim Highsmith – Agile Project Management

True innovation is risky business. But there are ways to manage risk. The core mantra is to learn while doing by testing early, often and cheaply throughout the innovation and development cycle.

“Every morning you’ve got to wake up with a healthy fear that the world is changing, and a conviction that, to win, you have to change faster and be more agile than anyone else.”

– Indra Nooyi – PepsiCo’s CEO

Healthy fear is good. It keeps you on your toes to compete at the top of you innovation game.

“Being a good leader isn’t enough if the process by which you’re attempting to create is flawed.”

– Jeff Campbell –Brinker Executive in Residence at San Diego State University – School of Hospitality & Tourism

As great of a leader you might be, if your innovation processes and core assumptions are flawed, no act of leadership will save you. As a leader, you need to see the big picture, and have the courage to change “the way things are done” when evidence points to a flawed process.

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in success, than to take the lead in the introduction of new order of things.”

– Machiavelli

The diffusion of innovation (i.e. crossing the chasm) is hardly a new phenomenon. I can imagine when the first caveman discovered cooking with fire was a good thing. But his fellow cavemen were reluctant to adopt fire because fire was hard to start, and had the nasty habit of smoking up the cave!

“Failure is reality’s way of showing what you don’t yet know, but need to learn.”

– John Danner and Mark Coopersmith – WSJ “How not to flunk at failure” Oct. 25, 2015

Yes, failure is good if it is put in the right context and managed properly. When dealing with the unknown, it’s guaranteed failure will occur. So embrace failure as part of the learning and discover process.

“Uncertainty is especially the enemy of passion”

– Holman W. Jenkins – WSJ “The Next Climate Scandal” Nov 14, 2015

Uncertainty causes fear and paralyzes. Left unchecked, it kills our passion. Dealing with uncertainty is a skill and attitude we must master if we want to play the game of innovation to win. Adopt an innovation and discovery process to lean into your fears and move forward to success.

“If a story is not about the hearer, he will not listen. And here I make a rule – A great and interesting story is about everyone or it will not last.”

– John Steinbeck

Steinbeck was talking about good story telling. We can also apply his insights to creating great products. Great products are all about helping people get important jobs done better. If people don’t have an important job that needs to get done, then the product will fail in the market.

“We made too many wrong mistakes.”

-Yogi Berra

How could I not include a quote from the late great Yogi Berra, may he rest in peace. I am sure Yogi was talking about baseball, but this quote is applicable to innovation and new product development.

Don’t make stupid (wrong) mistakes! Mistakes are not the same as failures. Mistakes are the same old failures made over and over again. For goodness sakes – learn from failures and don’t repeat stupid mistakes!

Wishing you a happy holiday season and prosperous new year!

Kevin

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“i-watch” form the sidelines: a great idea or too little too soon?

Dick Tracy was wearing a “smartwatch” way back in 1946. So the idea of a smartwatch is nothing new, at least not in the imagination of Chester Gould, Dick Tracy’s creator.

Isolated female hands with white smartwatch with email on the screen on a background of green grass

I don’t know if or when the smartwatch as a category will grow into a big market. From the sidelines, currently it doesn’t offer me a compelling reason to hire it to get an important job done.

But I can envision one day, using a smartwatch to interact with both my digital environment and physical world as the Internet of Things (IoT) becomes more pervasive.

I might for example, use a smartwatch to open my house door by scanning my fingerprint on it. Or use my smartwatch to pay at the checkout line, or board a train. And maybe even replace my smartphone with my Dick Tracy watch.

When it comes to the digital future – anything imaginable is probably. But the future is hard to predict, and the adoption cycle of new technologies and innovations take time to diffuse (see my article on diffusion of innovation). Smartwatches are no different.

 

Technology Adoption Lifecycle Curve: The Tornado
Figure 1: Product Adoption Curve and the Chasm

So what will it take for smartphones to become adopted by the early majority?

A common attribute shared by truly new technologies is that it takes time for the invention to diffuse into a society (market). For new technologies, it not only takes time to build out the infrastructure (for example the IP network had to exist before the word-wide-web could exist), but also time to change people’s behavior to accept and adopt the new paradigm (i.e. feeling confident and safe to shop on line).

According to Everett Rogers, a pioneer in the Diffusion of Innovation Theory, there are five fundamental attributes that determine the likelihood of an innovation being adopted:

Relative Advantage

The degree to which an innovation is perceived as being better than the idea it supersedes. The degree of relative advantage is often expressed as economical profitability, social prestige or other benefits.
For most of us, a smartwatch isn’t going to provide us a relative advantage when it comes to keeping time. It’s got to deliver something much more valuable. For example, making payments easier and more secure could represent a relative advantage to credit cards, tickets, pass-cards and smartphones.

Of course there are people out there who will purchase smartwatches based on the personal and emotional jobs to be done. For example: being recognized as a trend setter. And those who find the watches aesthetic beautiful and prestigious (i.e. wearing it as statement of wealth).

Compatibility

The degree to which an innovation is perceived as consistent with the existing values, past experiences, and needs of potential adopters. Compatibility also has an infrastructure component where the new innovation is compatible with existing technologies (i.e. it interoperates and complements existing technologies).

For example, in order for a smartwatch to become a better payment system, the POS and payment terminal systems will have to be built out (now happening), and people will have to become comfortable with using the smartwatch for payments.

Complexity

The degree to which an innovation is perceived as relatively difficult to understand and use.

With great design we have come to expect form companies like Apple, I anticipate complexity will be designed out of these devices. But it depends of course on the application.

A payment application, for example should be pretty straight forward. But using a smartwatch for healthcare monitoring is currently too complex. A recent article I read “Wearables Solve a Problem Called December,” suggest that doctors are questioning the value of these monitoring devices.

The issues with healthcare monitoring comes down to what to do with all this data patients are collecting, and what kind of liability does this information represent. For healthcare monitoring to work, the complexity and uncertainty needs to be removed from the system.

Trialability

The degree to which an innovation may be experienced with on a limited basis. Stated another way: the easier it is to try and quicker the benefit is understood and to dispel uncertainty about the new idea.

It’s pretty easy to try smartwatches out – just go down to your local electronics, phone or Apple store and give it a go. The problem though is that the applications are limited, and may not provide enough relative advantage at this time for the mass market to adopt it.

As applications are added, and prices drop on these devices, people are more likely to buy it to give it a try.

Observability

The degree to which the results of an innovation are visible to others. When people start seeing friends, colleagues, and competitors using smartwatches to get important jobs done, that is when mass adoption will occur.

According to diffusion theory, mass adoption begins once interpersonal networks become activated in spreading subjective evaluations of an innovation from peer to peer in a social system.

Critical mass for adoption is between 10% to 20% of the market. After that point, it is often impossible to stop the further diffusion of a new idea, even if one wished to do so.

Smartwatches will achieve mass adoption when they get important jobs done

No matter how great we think our technology is, if it doesn’t solve an important problem people want solved, nor provides a truly unique value proposition to get the job done better than alternative solutions – the technology will have little chance of being a blockbuster product.

I might some day in the near future, adopt a smart watch. But not until I can understand how it gets an important job done better than how I am getting it done today.

It’s only a matter of time – or is it?

Kevin

Posted in Diffusion of Innovation, Jobs To Be Done, New Product Development | 1 Comment

Choose The Right Development Strategy Based On Where You Are In The Knowledge Funnel

Developing and launching innovative new products is inherently risky. No true new idea is fully formed from the start. You simply will not know what you don’t know, until you engage real people with real problems.

There are more questions and unknowns that need to be addressed as the idea moves through the knowledge funnel from an initial idea through market success. Chances are, the initial idea will evolve, take a new shape, or perhaps morph (i.e. pivot) into something quite different, and hopefully better, than was originally envisioned form the onset

Too often, companies approach new product development (NPD) in a linear and rigid fashion. Where they gather all the product requirements up front, and then systematically follow their processes, usually a phase-gate process, and churn out a product that has been technically verified through the various gate and QA checks.

But a funny thing happens when the finished product is handed over to marketing and sales – sales aren’t happening as predicted. The market just doesn’t seem to care, or understand your nifty new product.

What happened?

Following a tried-and-true phase-gate process that has worked successfully in the past, doesn’t guarantee it will work this time. You might even have a formal ISO 9000 quality program to verify you are developing your product in the prescribed right way. But this is a totally new game.

The old game plan failed to recognize the new rules of the game. As a result, the market is unimpressed, it simple doesn’t value your solution. You got a dud on your hands, and it’s beginning to look ugly around your firm.

89% of the products that fail in the market are due to non-technical reasons

According to Dr. Cooper (credited for creating the stage-gate process which has evolved into a non-linear development process), 89% of the products that fail in the market are due to non-technical reasons.

For example, the product simple was not needed in market. Perhaps due to a lack of product differentiation (the incremental “me-too” boring product). Simply copying what a competitor has done, adding a few new features, and making it less expensive is unlikely to displace the competitor’s product. There simply is not enough perceived value to make a customer want to switch.

Or perhaps you launched the dreaded “solution looking for a problem.” You started with a really interesting technology idea, dreamed up a product that sounded great on paper. But you didn’t fully understand, nor take the time to understand, who the customers are. And what important job (or pain) your product helps them get done better than they can with current solutions.

Doing the “process” right isn’t the problem

A traditional phase-gate process is based on a “single learning loop” process (see figure 1). It assumes you know the important requirements and specifications upfront. In the case where requirements are well defined and known, the traditional development process works great. In that situation it can be the right development game plan to use to move down the knowledge funnel, a.k.a. innovation playing field.

traditional NPD process

Figure 1: Traditional Phase-Gate Product Development Process

But in the early stages of formulating a true innovation, uncertainty and risk abounds. We can never have perfect information, especially as we embark on a novel idea. Gathering requirements up front helps mitigate risk. But seldom will be the case that we really understand what customers really want (requirements) until we engage them in meaningful conversations and demonstrations.

Using rigid phase-gates to execute truly new products, are pretty rare these days. Development teams have learned that “things evolve” as we move down the knowledge funnel. Assumptions are either validated, refined our rejected. New insights emerge as we learn more about the important jobs people want done, their desired outcomes and constraints that prevent them from achieving 100% satisfaction.

And worthy competitors are doing their best to beat you for the customer’s business. I believe it was Mike Tyson who was credited for saying “Everybody has a plan until they get punched in the mouth.” If you are competing for an opportunity worth winning, competitors will take a swing at you – guaranteed.

Indeed, there is a lot of uncertainty and risk associated with developing and launching innovative new products. The way we manage risk is to use learning loops and iterative design approaches. And be faster at innovating and creating value than the competitors.

A primer on Learning Loops

So what exactly are learning loops? Why are they important? How do you use them? There have been books written on learning loops, so I will only touch on it here.

learning_loops

Figure 2: Triple Loop Learning
Source: http://www.thorsten.org/wiki/index.php?title=Triple_Loop_Learning

Single loop learning: Learning how to do “things” right. It’s about following the rules and processes, and incrementally improving upon. Single-loop learning is the repeated attempt at the same problem, with no variation of method and without ever questioning the goal.

In the case of product development, if we can start with a valid set of known requirements, the traditional product development process can work. But until we explore, experiment and gain a deep understanding of the customer’s needs, predetermined (assumed) requirements is a risky bet.

Double loop learning: Learning to do the right (kind of ) things first. Learn by engaging in reflection. It’s about questioning the goals and objectives, and the rules we use to achieve these goals. This is the level of process analysis where people become observers of themselves, asking, “What is going on here? What are the patterns? In other words adapting to the changing environment when new realities are understood.

Iterative design, agile project management, and modern “stage-gate” all incorporate loop 2 learning. These methods recognize ideas are based on assumptions that need to be validated through testing early, often and efficiently.

Triple-loop learning: Learning about learning. Reflecting how we learn in the first place. Reflecting on how we think about the “rules,” not whether the rules should be changed. Triple-loop learning opens inquiry into underlying “why’s.”…that permits insight into the nature of paradigm itself.

The results of this learning includes enhancing ways to comprehend and change our purpose, developing better understanding of how to respond to our environment, and deepening our comprehension of why we chose to do things we do.

Knowing where you are the innovation playing field

The innovation game plan (development strategy) you chose will depend on your specific situation and circumstance. For example, where are you in the knowledge funnel, your innovation time horizon, and amount of uncertainty you face? The resources (human, technical, assets, and financial) you have to invest. And your innovation and NPD culture and climate. (i.e. does your company accept change and built to be agile?)

Thus an innovation game plan should always start with an awareness of the knowledge gap you face, and recognizing the playing field is constantly evolving. It’s better to base your game plan on a set of plays that match your current situation versus locking into one development dogma over the other. And adapt quickly (be agile) as required, to innovate faster than the competitors.

In short, learn by doing, and adapt your practices to address the realities of the innovation game you are engaged in.

Kevin

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Designing a Reliable, Adaptable, and Flexible Innovation Offense

Every CEO and product manager knows that new products are the lifeblood of their organization. Not just any new product will do, rather innovative new products that help customers get important jobs done meaningfully better (from the customer’s perspective).

Without innovative and breakthrough new products, a company becomes stale, and eventually lose out to more innovative competitors. They will no longer have the wares and means to compete and win.

The market doesn’t care what you have done in the past, it only cares what you can do for it today. And you need to be on top of your innovation game today. And ready to deliver value in the future ,which comes at us faster and faster each day, as we face the realities of today’s dynamic and competitive market place.

No wonder there is a huge desire and need to innovate and launch game changing new products. How else does one compete in a hyper competitive business environment?

But the reality is, playing the game of innovation entails risk. Depending what industry research you use, the innovation success rate is somewhere between 5% to 25%!

The Design of an Innovation Offense

To compete to win, requires continuous innovation and bold strategies. The only sustainable competitive advantage a company has today is its ability to learn faster than their competitors and out innovate them. To achieve sustainable competitive advantage requires the design and execution of an innovation system (offense) that delivers the desired business results we want: reliable and predictable growth.

Innovation and product development is a complex job. It involves understanding the dynamics of the market which by its nature, can be hard to uncover. We need to answer:

• Who has the problem?
• Is big enough problem (pain/unfulfilled desire) people want solved?
• How can we solve this problem better than current solutions?
• How can we create a business model to win the customer’s mind-share and beat the competition?

In short: Are there enough potential customers who will buy our solutions at a price where we can create a thriving business?

Using the jobs-to-be-done innovation framework to answer these critical questions and build a foundation of knowledge to innovate around

The jobs-to-be-done innovation framework provides both the structure and a common language we can use to discover, understand and define viable solutions based on the important jobs people need to get done, their specific desired outcomes, and what gets in their way of achieving 100 percent satisfaction. We can innovate around this knowledge foundation.

For further reading, visit my last article “Want To Play the Game of Innovation For the Long-Haul?,” where I examine why focusing on important jobs people want done provides, a long-term focal point for innovation.

In the early stages of formulating a true innovation, uncertainty abounds

We can never have perfect information, especially as we embark on a novel idea. Even if we could have perfect information at the onset of our innovation project, the pace of change and relentless competitive pressures would quickly render it obsolete.

The way we manage risk is to use learning loops and iterative design approaches. Thus a planning loop process is a design requirement for our innovation offense.

I’ll discuss learning loops and design thinking in future articles. In the meantime, check out Tim Brown’s article “ Design Thinking” (June 2008 issue of HBR).

Brown provides a good foundation of what design thinking is and how it incorporates learning loops into the design process. He calls learning loops a systems of spaces called: Inspiration, Ideation, and Implementation. All design projects will loop back through, and must ultimately pass through each space to be successful.

Building an innovation culture and grooming tomorrow’s leader is a design requirement for an innovation offense to thrive

Innovation and new product development is a team sport. Creating a system and environment that brings together a diverse group of able people, and turns them into a high functioning team is essential for execution.

The players need to know the rules of the game, their roles, the resources, a well-defined innovation playbook (and coaching and training), and the freedom to innovate and try new things.

Business strategy and innovation go hand in hand

Innovation and product development always involves choices – what we will explore, what opportunities we will invest in, develop, and launch, and what we won’t pursue. It’s driven by, and influences strategy.

Our strategic direction defines: where we will play (and won’t play), and how we will win customers and beat the competition. Ideally strategic direction is set before an innovation offense is run.

However, our direction may not be totally clear at the start of the offense. Instead we may have identified promising “possibilities” that need to be investigated and explored to choose our direction.

The same basic plays in our innovation offense are applied to gain insights and formulate a winning strategy to execute around. By testing basic assumptions in the strategy making process, we can adapt as we learn, and make choices on what direction we will take.

The Takeaway: creating an innovation offense is a design problem

It has a specific desired outcome (creating, attracting and retaining ideal customers), and a set problems, issues and challenges associated with it.  Including dealing with the dynamics of a competitive landscape, uncertainties and risk, a set of critical decisions and choices that are made to successfully move through the knowledge funnel (see figure 1), also known as the innovation playing field.

innovation_playing_field

 

Figure 1: The Knowledge Funnel a.k.a. the innovation playing field

Your job is to design and execute an innovation offense that will reliably get you through the knowledge funnel faster and more often than the competitors. With the end game goal of delivering highly differentiate solutions that help you customers get important jobs done meaningfully better.

Play the game to win!

Kevin

Posted in Discovery Driven Design, Jobs To Be Done, New Product Development, Strategy | Leave a comment

Want To Play the Game of Innovation For the Long-Haul?

Then build your innovation strategy around the jobs-to-be-done innovation theory

The way to win customers and beat the competition is simple: help people get important jobs done better (in a “meaningful way)” than what they are currently experiencing. This is the core concept behind the jobs-to-be-done innovation theory.

When we discover important jobs people want done, and determine if people aren’t achieving 100% satisfaction in getting these jobs done, then an opportunity to innovate and create a new value proposition is likely.

Value is always defined from the customer’s perspective, not from ours or the competitors’. When we focus our attention solely on beating the competitor by one-upmanship, we ultimately lose sight of what customer’s really want. Too often we end up with either “me-too” products, or bloated and expensive products that overshoot the market.

Worse, by focusing on beating the competition as your innovation strategy (a defensive strategy), companies become vulnerable to being outflanked by a new entrant who doesn’t play by the established industry rules.

The story repeats itself over and over again as predicted by Clayton Christensen’s “disruption theory.” For example, consider the plight of the main-frame computer companies, who were flanked by the mini-computer companies, who were then flanked by the PC companies, who in turn are being flanked by smart phones. What will smart phones be flanked by?

Apple, under the leadership of Steve Jobs, was able to rethink the future using a new set of rules that focused on helping people get important jobs done. I am not suggesting that Apple specifically used the “jobs-to-be-done” innovation theory to reinvent itself.

My understanding is that Steve Jobs and his designers and development team had a deep understanding of how technology could change the way people approached day to day task in their lives. Design thinking was core to their approach. They would prototype, test assumptions, evaluate and improve.

However it was Apple approached innovation and new product development (somewhat a secret), they did it better than anyone before. I submit that when we back-test the jobs-to-be-done theory to explain Apple’s success, we discover the theory holds true.

As for Design Thinking, in my way of thinking, it is compatible and complementary with the jobs-to-be-done innovation theory. Design thinking provides a set of plays every innovation playbook should have in it.

Important and core jobs are stable overtime

In my book, “the Innovator’s Playbook,” I present the argument that core jobs are stable and provide a focal point for innovation. Core (or primary) jobs are both important and essential for people to conduct their daily lives and achieve important goals.

For example, a core job of a CEO is to communicate her vision throughout her organization. She has many tools she can utilize to deliver her vision including the written and spoken word, companywide meetings and so on. Getting her vision across and reinforcing it is an important job that a CEO does to lead her company to market success.

The important point is: core jobs don’t fundamentally change that much. What changes is HOW to get the job done. This is often by technology. New technologies provide new capabilities to get core jobs done better.

As a consequence, products come and go. They are only solution instances and have limited shelf life. But if we are truly focusing on a set of core jobs to innovate around, we can move from one business “S” curve to the next with a higher degree of certainty that we can create and retain new and existing customers.

The way we do that is to build our innovation strategy and systems (our innovation offense) around important jobs that people do. A jobs-to-be-done based innovation offense allows us to grow along both sustainable (addressing existing customers) and disruptive (creating new customers) innovation types.

Nothing lasts forever: Be ready for change

If you want to play the game (the market you choose to compete for),companies would be wise to create a balanced approach between sustaining and disruptive innovation. As Jack Ma, of Alibaba said:

“In the information era, change is the best equilibrium. No single structure (i.e. development process) is perfect and can solve all problems.”

What does stay stable though, is that people have important jobs they do to achieve specific desired outcomes. If we dive deep into people’s desired outcomes and discover the context and challenges that get in their way achieving their outcomes with 100% satisfaction, we can continue to create value and win the game of attracting and retaining new customers.

In future articles, I’ll layout an innovation strategy called OSTA (Observe, Synthesize, Translate, Act). OSTA is a discover driven based innovation strategy. An OSTA offensive strategy is a derivative of the familiar  OODA decision loop: Observe, Oriented, Decide, Act.

The difference is OSTA is specifically built to create reliable value based around the jobs-to-be-done innovation theory and the Design Thinker’s Trifecta (a.k.a. Design Thinker’s Success Triad).

To win at the game innovation, focus on important jobs people want to get done.

Kevin

Posted in Discovery Driven Design, Front End of Innovation, Jobs To Be Done, Strategy | 1 Comment

I Get It! People Really Want Quarter Inch Holes, Not Quarter Inch Drills. But Now What?

In the last article, we took our initial job statements and explored if these jobs are primary jobs (“core” jobs) or sub-jobs of a primary job. The purpose of this analysis was to create a clearer picture of the overall scope and complexity of the target job(s) under investigation. And get a preliminary read if the target job(s) is attractive and sufficient to innovate around by answering:

  • Is the target job clear and definable?
  • Is the target job too trivial and obvious?
  • Is the targeted job too broad to be meaningful?
  • Does the targeted job fit within our business strategy defined as
    • Where we want to play (the market) and where we won’t play.
    • How we will win (exploiting our current and future capabilities to innovate and launch successful products).

Recall our fictitious company Myopia Door. Before applying the jobs-to-be-done innovation lens, they viewed themselves as being in the business to make doors. Their business model was to make and sell standard doors to contractors, as well as respond to custom door spec jobs for higher end home designs.

Like many companies, Myopia’s business model had served them well to date, but now they are experiencing more competition. They are beginning to compete on price and margins are eroding quickly. Though they have made improvements in their manufacturing processes, they simple are not set up to be the “low-cost” leader in the market. They cannot win at that game.

They want more high-end custom door jobs, but they are having problems scaling this business. Not enough architects or builders are seeking them out for their solutions. And “one-offs” don’t provide enough margin contribution to justify growing the custom business as currently defined. It just adds more projects into an already over tapped development and manufacturing schedule causing delays and budget overruns.

Myopia Door needs to change the rules of the game and/or find a new playing field to compete on – but where and how?

Though it seemed like a radical idea, if not nonsensical, Myopia’s innovation team allowed itself the freedom to think differently and frame the market from the jobs-to-be-done perspective.

“People don’t need doors – People need security, privacy and interesting room transitions to enhance the flow between spaces in their homes.”

Myopia Door hypothesized that architects and homebuilders could add more value to their offerings by creating more interesting and secure living space though novel passageway systems.

Further Myopia believed it could help builders get more construction jobs done better by designing door systems that are easier to install. And include important new features and functions that integrate security and “awareness” (i.e. exploiting the “internet of things”) into their products.

Myopia’s lightbulbs were turning on. Lots of great ideas. But which ones represented the best new growth opportunity? Which ones could they realistically solve with a reasonable level of assurance that the opportunity was real and worth pursuing? It was time for Myopia to conduct a “job-scene-investigation.”

Understand what customers’ true needs by conducting Job-Scene-Investigations (JSI’s)

Before starting a “job-scene-investigation,” it is important to have a preliminary job definition (job statement or job statements) in place. Without direction, much time and resources can be wasted on chasing interesting but not relevant information. Most likely you will not learn what you hope to learn because you don’t know what you are looking for, and won’t recognize it if you see it.

By focusing on important jobs that people need to get done, we can determine what specific outcomes job executors want to achieve. And what prevents them from achieving their outcomes and objectives with 100% satisfaction. In other words, why aren’t they getting their important jobs done perfectly?

There is no one-single right way to discover if a job under investigation is important, viable and attractive. To play the game of innovation to win, we need a set of plays (methods) we can draw upon to work our way through the knowledge funnel which represents the innovation playing field (see figure 1).

iNPD knowledge funnel

Figure 1: The Knowledge Funnel and New Product Development Phasesfrom “The Innovator’s Playbook: Discovering and Transforming Great Ideas Into Breakthrough New Products” (www.theinnovatorspaybook )

I like to use football as an analogy to explain why the situation dictates the plays (methods) an innovation team faces in advancing ideas through the knowledge funnel.

The plays a successful football team will call when facing first and goal at the one yard line, will most likely be totally different than the plays it calls when facing third down and 20 yards from their own 10 yard line. That is, if the team is committed to winning the game, and has a playbook to deal with the game situation.

In future articles, we will continue to build our innovator’s playbook and draw up a set of plays to conduct job-scene-investigations effectively based on where we are on the innovation playing field. Our playbook will be designed to test early, test often and test cheaply to answer the quintessential question:

Is this job under investigation a great opportunity worth pursuing? And if so, what must the solution provide in value to win the customer’s business and beat the competition?

Myopia Door is ready to advance the “idea football” down the innovation playing field and create new opportunities based on important jobs people want done. Stay tuned on how they will approach the game of innovation to win.

Kevin

Posted in Discovery Driven Design, Front End of Innovation, Jobs To Be Done, New Product Development, Strategy | 1 Comment

Pick Your Spot to Compete and Win by Scoping the Total Job-To-Be-Done

In my previous articles (constructing a job statement, alternative job statement construct) I provided two job statement constructs we can use to define a job or set of jobs, people want to get done. The initial job statement provides a starting point and direction of where we will explore and investigate important jobs people want done.

Before we move into the next phase of our job investigation, we should do a little more analysis of the job statements we have compiled and explore if these jobs are the ultimate end jobs (primary or “core” job) or sub-jobs of a primary job. By doing so we create a clearer picture of the overall scope and complexity of getting the job under investigation done.

In chapter 5 of “the Innovator’s Playbook,” I describe a primary job as being the fundamental problem a customer faces or the ultimate outcome (objective) they desire. More often than not, a primary job will have sub-jobs and ancillary jobs associated with it. For example, a primary job might be building a house.

Building a house is a relatively complex job requiring many steps and sub-jobs. From architectural design, to final customer acceptance sign-off, and everything in-between. We can represent the primary job in a top-down break-down tree diagram to understand the primary job at hand. See figure 1.
A job-tree for building a house

Figure 1: Job tree for building a house

 

Ancillary jobs of building a house include landscaping, utility hookups, flooring, carpeting, appliances, and similar task. Doing a bit more thinking and scoping about the primary job, we discover that building a house is actually a sub-job of establishing a home (defined as a place where a family lives).

In establishing a home, a family might consider buying a new house, in which case they would engage an architect and homebuilder to get the job done. Other important jobs, which are ancillary to buying the house include moving in, buying new furniture, window coverings, just to name a few important jobs families need to get done in establishing their home.

The point is, primary jobs can be quite complex and rich with opportunities That’s the good news. The bad news is that it’s unlikely, a single company can provide solutions to every job in a job tree (another term we can use is job map). A company needs to pick its spot where it can compete and win within a job tree.

The job or set of jobs we focus on, needs to be actionable. Jobs that our customers and we can get our arms around. Jobs that are clearly defined, understandable, important, and not getting done perfectly. And jobs that are within our ability to design, develop and deliver superior solutions than what is currently available.

Scoping out The Job To Be Done: The big picture versus the small picture

Sticking with the primary job of building a house, let’s suppose a door manufacturer, let’s call them Myopia Door, wants to create a new product for new home construction.

Using the job statement construct: an action verb – object of action – contextual clarifier, we might define the job-to-be done as:

“Provide doors for new home construction”

On the surface, the job statement (our job under investigation) appears actionable. People need doors in homes for security, privacy and living space flow. And buyers of homes expect homebuilders to get that important job done for them.

Myopia Door is clearly addressing a need, for both the ultimate buyer (the homeowner) and the technical buyer (the homebuilder). But what makes our Myopia Door different form the rest of the door manufacturers? Myopia’s competitors make doors too. But are there other important jobs that Myopia and its competitors not addressing that could be a game changer?

In other words, is Myopia’s job statement too narrow? Or is it too broad? Or is it just right? To answer that question, we will need to investigate in greater detail the job tree of building a new home, and perhaps buying and owning a home.

Why bother worrying about the homebuyer and owner? Myopia Door might assume that the homebuilder is the primary customer they need to focus on. After all it’s the homebuilder’s (and architect’s) job to understand what customers want (i.e. a comfortable and safe living space).

And it’s the homebuilder’s responsibility to either choose an existing door from Myopia’s collections of wonderful doors, or provide Myopia detailed specifications to make customized doors. Right? That’s how it’s been done in the past after all.

The answer would be yes – if Myopia Door is satisfied with competing in a red ocean (i.e. creating commodity doors) with the rest of the pack. But if the objective of Myopia Door is to innovate and create new rules of the game, then its next step is to do a jobs-to-be-done investigation ,and really understand the total job it takes to install doors, and what homeowners really want in security, privacy and living space flow.

Conducting a Job Scene Investigation (SJI)

If Myopia Door wants to compete to win, it needs to conduct a “job-scene-investigation” (JSI). They need to think of themselves more than just being a commodity door supplier – they need to get important jobs done that people want. This includes both the homebuilder and the home owner.

Next article we will begin the process of doing a Job-Scene-Investigation and how to discover the unseen obvious.

Till then, keep an open mind and focus on the total job people want to get done better.

Kevin

Posted in Jobs To Be Done, New Product Development, Strategy | 1 Comment

The Innovator’s Playbook

Discovering and Transforming Great Ideas Into Breakthrough New Products

The Innovator's Playbook

The Innovator’s Playbook provides an innovation framework based on the "jobs-to-be-done" innovation theory pioneered by Clayton Christensen and others. This proven methodology frames innovation opportunities from the customer's perspective to create products and services that match the needs of the people who use it.
 

Download a Preview Copy of the Innovator's Playbook  

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