Michael Osofsky on Innovation

NetBase Post Ties Into Innovation Topics

2011-08-12T17:26:00.000-07:00

A new post on the NetBase blog about the social media conversation surrounding a product called Cricut from Provo Craft touches on several key topics in innovation and product positioning.

Specifically, the company’s policy toward third-party software relates to the idea of Lead User Innovation, because the company chooses not to embrace the creativity of users, which can have adverse consequences.

In addition, their policy on pricing puts them at risk for losing market share to a disruptive technology, because their add-on products are comparatively expensive, which potentially opens the door to a company producing a lower-cost alternative.

The blog post is a form of social media analysis called a netnography—a qualitative, interpretive research methodology that adapts the traditional, in-person ethnographic research techniques of anthropology to the study of online communities. To write the netnography, NetBase analyzed thousands of posts from consumers about the brand. The posts are automatically sorted into Positive or Negative classifications by our natural language processing (NLP) engine, then we manually sample those posts.

Netnography.com best practices forum coming soon

2010-08-02T14:32:00.000-07:00

NetBase and Rob Kozinets will be launching a best practices forum later this summer. If you're interested, check out http://www.netnography.com. Be sure to let us know what you're interested in discussing.

Flip it to High blog announcement

2010-07-30T22:31:00.000-07:00

I'm trying an experiment with ConsumerBase which I call Semantic Keyword Expansion. I've created a blog I'd like to announce called Flip it to High. On this blog I'm promoting the Vitamix blender. I've requested a Vitamix affiliate license and I'm going to use ConsumerBase to help me find keywords to advertise my blog. With a search in ConsumerBase for Vitamix, I'm hoping to find non-obvious semantically related keywords to advertise on.

By the way, the Vitamix really is a wonderful product, you might want to see what I have to say about it on my other blog, http://flipittohigh.blogspot.com.

All about ConsumerBase

2010-07-07T09:47:00.000-07:00

Our fabulous marketing team just created a clip on youtube describing what our product, ConsumerBase, is all about. My favorite part is the insights about Wii at the end.

Check it out...

http://www.youtube.com/watch?v=84W3WTlF65o

Innovative soup recipe

2010-05-22T10:30:00.000-07:00

I love this soup recipe below because it gives guidelines for how to make different kinds of soups with whatever you have on hand. This is a really practical recipe that gives you a lot more control over what you're cooking. It explains how to use ingredients, rather than just dictating what you should use and when.

I wish someone would write a cookbook with recipes written this way.

http://www.wikihow.com/Make-a-Soup-Without-a-Recipe

I make chocolate chip cookies a lot based on my Great Grandma's recipe. I've learned what butter does vs. shortening. Butter makes it browner, flatter and crispier than shortening. The more flour you put, the chunkier. I'm still trying to figure out the role of rising agents. Next time I think I'll leave them out and see if they even make a difference.

Zoetrope

2010-03-31T14:02:00.001-07:00

Eytan Adar's latest project is Zoetrope, a way of interacting with a web page's history. Rather than just seeing what's currently on a web page, Zoetrope let's you easily rewind to previous versions of that page.

Some of the applications mentioned in his video at http://www.cond.org/zoetrope.html are for viewing how a value on a web page changes over time, for example:

* Stock price
* Movie rating
* Gas prices (e.g. on gas buddy)

What is the relationship between gas prices and oil prices is a question that could be answered because it allows you to see how those values relate to each other. The video describes a really rich scenario for exploring relationships between data.

What if the correlations between changes in time-series data though could be automatically detected? What if we had the ability to mine the web for time-series data and automatically detect which events seem to be causing other events?

What's needed is a uniform data structure for representing time series data. Then we'd need to crawl the web and map the data into that format. Zoetrope adds another element to this wherein time series data is captured by monitoring the changes in a website over time.

I think it is very cool that Eytan is using the term "lens" to talk about ways of viewing data harvested off of the web. At NetBase, we use the term lens also, but for viewing data extracted through our semantic analysis.

How to be an innovator

2010-03-28T14:02:00.000-07:00

Not much guidance is out there for how to become an innovator. Sure there's lots on how to be an entrepreneur, an inventor, or a leader. But if you want to be an innovator, here is a how-to tip.

I heard two very interesting innovators speak last week at Eric von Hippel's Innovation Lab. One was Bre Pettis, founder of MakerBot. The other was Eric Jackson of Jackson Kayak. Von Hippel would call both of these innovators "user manufacturers". This is because they are practitioners in their field and entrepreneurs who have created companies to provide products to other practitioners in their field.

Both men talked about their passion for their field. Eric was an avid kayaker who entered and won all kinds of kayaking contests. Bre loved 3D printers and was fascinated by the idea of 3D printers that could print our 3D components needed to build other 3D printers.

At some point, both men realized they could spend even more time kayaking and building 3D printers if they could create and sell products necessary to kayak and build 3D printers, respectively. It was this critical realization that enabled both Eric and Bre to devote their lives to their passion.

So the lesson to those of us who would like to innovate is: find out what you're passionate about it. Then figure out what products and services you can develop to sell to other practitioners of your craft. But in the spirit of user-innovation, you also have to be careful not to become too much of a manufacturer and not enough of a user. Eric Jackson says that he practices kayaking every single day with his lead user buddies. He competes in all kinds of kayaking competitions. He said if he lost a day of practicing, he'd lose his edge as an inventor for his customers.

Technique – the Kozinetnographic method

2010-03-08T10:55:00.001-08:00

I realize part of the results may be due to my experience in pulling insights or fluke of nature or or or...
I am using WordPress, a ballpoint pen, and the margin of my copy of Netnography
Anyway, I read Rob Kozinets’ opinion of trying an analytic coding on the alt.coffee entry followed by a hermeneutic interpretation of the post.
It does work, a nice tiger fleck insight (fairly deep) consistent analytical time (in the 20’s) good to excellent cultural immersive learning overall.
So as most things analytical are academic I am dubbing this the Kozinetnographic method....

My tiger fleck insight

2010-03-08T09:45:00.000-08:00

Rob Kozinets sent me his Netnography book a couple of weeks ago and I've been enjoying it quite a bit. Last night I got to the Data Analysis section and thoroughly enjoyed the exercise on the alt.coffee posting (search for page 122 on Amazon).

At first glance I thought it would be impossible to extract any insight out of a passage of text riddled with terms foreign to me about a subject I could not possibly be more ambivalent about...espresso. But I gave it the old college try, and applying the netnographic technique I was able to find almost all of the same insights as the professor.

I'd like to contribute an insight to the analysis of this posting. I assumed going into this reading that taste was the most important quality of an espresso. I'm largely influenced by a new chocolate factory in San Francisco called Tcho. What makes Tcho special is it cuts through the chatter about percent cacao and country of origin...when it comes to chocolate the property that matters most is taste.

Figuring the same was true about coffee, I was surprised to read how Frank Rinetti described this great shot of espresso he made using the "Smith(inni)" method. He did not come out first and say the taste was excellent. He listed something about tiger fleck crema and consistent shot time first. And then when he described taste it was only on a range of good to excellent. Why write home about a coffee brewing technique unless it yields consistently excellent taste?

Well I can only imagine that in the realm of coffee, taste is not paramount. I don't know what tiger fleck crema is still but I've seen a picture of tiger fleck and it's quite beautiful. So I'm guessing that appearance of the coffee is as important, if not more important to coffee drinkers than the taste. If I remember how bitter the first sip of coffee I had was, it's frankly not surprising to me on reflection that taste isn't more important. The only "good" tasting coffee I've had was actually hot chocolate with a splash of coffee in it. If you haven't noticed, I like chocolate...a lot.

I also observed the contrast in language used to describe the crema and shot time vs. the taste. Not only was taste listed last in terms of important properties but the qualifiers were also very plain. The taste was described merely as "good" to "excellent". But the crema was described in such rich visual terms that that I had to do a google image to search to relate to it. And the shot time--still not sure what it is--was described with its own measurement system. The author said it was "in the 20's". Since no unit of measure was specified, I can only assume that the unit of measure is so well known in this community that it could be omitted.

When rich vocabulary and shared knowledge about a measurement system appear in forum content, I believe it means those properties have been given a tremendous amount of thought by that community.

Now contrast the richness of the description "tiger fleck crema" and "shot time in the 20's" with the plainness of "good to excellent taste". That's a stark contrast in my opinion and it makes me wonder if taste isn't as important as other characteristics in the realm of coffee connoisseurship.

Somone using Alka-Seltzer as a substitute for baking soda

2010-02-26T14:01:00.001-08:00

I just came across this posting for a recipe that uses Alka-Seltzer as a substitute for baking soda. That would be sure to give you rise surprise.

Non diabetic using glucose meter

2010-02-25T14:30:00.000-08:00

Chris McLay is (I'm guessing a bit) a non-diabetic who tweeted one week that he would try out a glucose meter to try to understand what it's like to manage diabetes.

I think people who wish to innovate should follow Chris's example because there's no way to appreciate a consumer base's pain better than to experience it for yourself.

HappySlip on Novel Uses for Bubble Wrap

2010-02-11T21:33:00.000-08:00

One of my favorite topics is novel uses for common household items. HappySlip, one of my favorite youtubers, did a bit on novel uses for bubble wrap that's funny.

SF Pillow Fight 2010

2010-02-06T16:17:00.001-08:00

Don't miss Pillow Fight 2010 in Justin Herman Plaza on Valentine's day at 6 PM:

http://www.pillowfight.info/

RE:invention

2010-02-01T16:41:00.000-08:00

The Scary Cow film-maker cooperative had its 10th screening event yesterday. Anton Gill had invited me to see his new film The Crosses which I enjoyed. But what made a real impact on me was his other film, RE:invention.

RE:invention is a wonderful short documentary about real people dealing with the effects of the current bad economy. There are three vignettes given that cover each person's crisis, their reactions of despair, and finally their self re-invention--hence the wonderfully chosen title of the film.

It was a great movie because it covered the lives of real people whom I could relate to. It was inspirational. Overall it was good enough to make me cry. Bravo!

PhD in Netnography - application deadline fast approaching

2010-01-08T08:59:00.001-08:00

If you're interested in developing the science behind the emerging market research technique of netnography, then you should check out the PhD program at the Schulich School of Business, York University.

Information about the PhD program: http://www.schulich.yorku.ca/phd

Apply by January 15, 2010 at http://www.schulich.yorku.ca/ssb-extra/school.nsf/allwebdocuments/Apply+to+schulich+now#Link_3

Exploratorium After Dark program for adults to play

2009-12-29T10:31:00.000-08:00

San Francisco has an awesome museum called the Exploratorium. We used to go there all the time when I was a kid. Now they have an after-hours exhibit just for adults that looks right up the innovator's alley.

Exploratorium After Dark: http://www.exploratorium.com/afterdark/

Innovative sleeping bag allows you to walk around

2009-12-09T14:18:00.000-08:00

Ever worried while you're camping that you might not get out of your sleeping bag in time to run away from a bear? Well I just found something interesting that could help. It's called the Selk'Bag and it's a sleeping bag jump suit. I found it while doing some testing on my company's technology.

Selk'Bag: http://www.lippiselkbag.co.uk/

Get ready to party like is 11/11/11!

2009-09-07T16:20:00.000-07:00

My friend Auren Hoffman has been planning a party on the Golden Gate Bridge for November 11, 2011. He's going to make an attempt at a Guiness record for the largest party on a bridge. Check out the evite:

http://www.evite.com/pages/invite/viewInvite.jsp?event=WWLHWZEHOAAZJDWZZFME&inviteId=BRKQMWXYCEBHIXQTOWRY&showPreview=false&x=613543

Divine, Inc.

2009-09-07T16:15:00.000-07:00

My friend Brian Doom is coming out with a movie. It's called Divine, Inc. I saw the trailer at
http://deviousincmovie.com/. It look like a wild and krazy time.

Good luck on the debut Mr. Doom!

Uplifting social disturbances

2009-09-07T15:46:00.000-07:00

A few weeks ago our friend Jay and his hula troop crashed various spots throughout the city (san francisco) and broke into hula. This hula-by-surprise was part of an organized effort called Hit and Run Hula (www.hitandrunhula.com). My favorite was when we crammed into the Apple store (http://sfist.com/2009/08/15/hit_and_run_hula_ambushes_apple_sto.php). While the unsuspecting customers browsed the computers, Dee and I put the Hit and Run Hula website up on the Safari web browsers on the display machines. That way they'd know what hit 'em. The best thing about the dances was that the dancers were all in plain clothes. More and more of them would join the dance as the song went on. As a bystander you couldn't tell who was a dancer and who wasn't. The reactions on peoples' faces were very memorable. The funniest was when the Apple store's security guard first noticed somethin was afoot. He lunged into the sea of people but his pace quickly slowed to a stunned run as he began to realize the store was being ambushed by a rare act of kindness and beauty.

Dee and I had lunch with the Hula troop that day and were talking about social disturbance. Someone mentioned another example where on Valentine's Day, singles get together in Justin Herman Plaza and have a pillow fight (http://www.pillowfight.info/). From what I've heard they're protesting those in love...and hoping to get lucky themselves perhaps in a fun and unusual social setting.

One last example of social disturbance with a positive tone came up as I've been reading SOMA (http://www.somalit.com/SoMa-The-Novel.html). It's a great work of fiction-based-on-fact. But anyway, in the book it talks about all kinds of ways people in my town have innovated to connect with each other. One is called the Cocktail Club. I can't find any mention of it online anymore, but apparently this used to be a crowd that would suddenly get a text message one night with the location of a bar typically unfrequented. The idea was everyone would suddenly show up at that bar as if out of the blue causing a bit of fun social disturbance for the regulars.

NetBase unveils public demo - HealthBase

2009-09-02T10:03:00.000-07:00

NetBase now has a publicly-accessible demo of its technology. The domain area we chose was health because it's something we can all relate to.

Check out HealthBase at http://healthbase.netbase.com/

This demo illustrates NetBase's Content Intelligence technology applied to health care. We have other applications of Content Intelligence for other domains as well. Our website goes into more detail: http://www.netbase.com.

I love exploring valuable new ways to apply technology. If you find you have to read tons of text (on the web, subscription-based sources, etc.) and you would like technology to do the reading for you, then Content Intelligence might be the solution.

What kind of analysis would you like to automate on the text you read?

Kids innovating with their Nintendo DS

2009-08-21T18:32:00.001-07:00

My kids are the in the other room playing on their Nintendo DSs. These are handheld game devices that have built-in networking so the devices can communicate with each other. My older one is telling my younger one "sound it out!!!" It sounds like a spelling lesson.

My older daughter is using her Nintendo DS to teach my younger son to read! She writes a work on her DS and he has to read it on his. They're able to lay around sprawled out on bean bags and sofas looking up at their DSs. I can imagine that in days of old, the two would have sat at a table with a piece of paper between them. But how much more fun to lay around.

Hey I'm not complaining :-) Good kids.

Goldfish S'mores Adventures

2009-08-12T17:13:00.000-07:00

My office mate, Joe Hung (employee #1 at NetBase), and I love camping. He camps more than I do and so was first to find and tell me about a great new product, Goldfish S'mores Adventure. This is no ordinary bag of Goldfish. Each bag contains a mixture of chocolate grahams, marshmallow, and honey graham fish that are all shaped like Goldfish. A tasty innovation!

Thanks Joe!

Announcing www.twitter.com/innovationmuse

2009-07-31T10:57:00.000-07:00

I had been encouraging my good friend Malcolm De Leo for years to write a blog because he's got so many good ideas and perspectives pertaining to innovation. I'm glad to say he did launch that blog and wrote about some good stuff. But now Malcolm's gone one step beyond. He's now an avid user of Twitter. In fact, Malcolm is the first person I know from my professional network who actively tweets about his worklife. I like what Malcolm said about blogs vs. tweets: "Blogs...that's so 2003!"

Malcolm--leading the way in the next generation of business networking, here's announcing his Twitter spot:

www.twitter.com/innovationmuse

Seeking a Software Sales Executive - Federal

2009-04-17T16:09:00.000-07:00

I could use your help finding great candidates for our opening for a Software Sales Executive - Federal at NetBase. Please feel free to forward this.

Software Sales Executive - Federal
Location: Washington, DC

If you ever wanted to take part in how the world’s leading companies and governments leverage various forms of content and next generation search technologies, let NetBase give you the inside track to this dynamic sales career.

NetBase delivers Content Intelligence solutions that harness value and insight from any source including the Internet, premium purchased content, and your own enterprise content. NetBase delivers value by "reading" every sentence inside each available document, linguistically understanding that content, comparing that content to "uniquely deliver" relevant answers and insights that you can use to take action. NetBase is being deployed by organizations that are recognized as global leaders in healthcare, publishing, manufacturing, consumer packaged goods and government such as Elsevier, Procter & Gamble, 3M, The U.S. Army, Pepsi and many more. For more information on how you can use the power and insight of Netbase, visit www.netbase.com.

NetBase seeks an experienced Sales Executive/Hunter to drive client acquisition in the Federal Government segment. This role is 100% focused on acquiring new clients and driving new business.

The ideal candidate is a bright, ambitious, responsible, hard-working individual with a proven track record selling complex products to senior level government officials, particularly in the Armed Forces community.

This position offers opportunities for significant compensation as well as potential career growth in sales, and sales management. It also features the benefits of working for a startup company, including rapid change, a fast paced team-work environment, and stock options.

US work authorization required.

Qualifications:
- Proven track record selling complex solutions to the Federal Government and Armed Forces, in and exceeding sales targets
- Passion for sales, exceeding sales goals, and adding value for clients
- Ability to rapidly drive sales from cold call to close
- Aspires to the highest level of integrity
- Undergraduate degree (Engineering degree a plus)
- Outstanding communication, leadership, and teamwork skills
- Ability to adapt to rapid change
- Resourceful, flexible, and aggressive about learning new things
- Track record of meeting deadlines
- Skills with computer tools and office automation tools
- Knowledge of Miller Hieman sales methodologies a plus
- MBA a plus

Location: Washington, DC
Percentage travel: 60% Travel

Authorization to work in the US required.

To apply: Please submit a resume and cover letter via email to team@netbase.com with the subject of "Software Sales Executive - Federal".

Seeking Machine Learning Specialists

2009-04-17T16:08:00.000-07:00

I could use your help finding great candidates for our opening for a Machine Learning Specialist at NetBase. Please feel free to forward this.

Machine Learning Specialist
Location: Mountain View, CA

NetBase, a well-funded, fast growing company with an impressive roster of top-tier Fortune 500 companies, seeks to grow its team with a machine learning specialist.

NetBase delivers Content Intelligence solutions that harness value and insight from any source, including the Internet, premium and enterprise content. NetBase reads every sentence inside documents, linguistically understands the content and powers breakthrough search experiences with relevant answers and insights. NetBase is being used by organizations that are recognized as global leaders in healthcare, publishing, manufacturing, consumer packaged goods and government such as Elsevier, Clorox, 3M, The U.S. Army, Pepsi and many more.

The Machine Learning Specialist role involves clustering/classification, topic identification, named entity tagging, lexicon acquisition and pattern identification from large corpora. The ideal candidate will have a PhD degree in Computer Science or related field with experience in natural language processing, computational linguistics, or information retrieval/extraction. Strong programming skills are required. At least two years of experience working with real life NL systems is required. A strong research record is a plus. We look for people who are flexible, learn quickly, and love getting into the details.

Authorization to work in the US and relocation are required.

To apply: Please submit a resume and cover letter via email to team@netbase.com with the subject of "Machine Learning Specialist".

Seeking a Software Architect

2009-04-17T16:03:00.000-07:00

I could use your help finding great candidates for our Software Architect openning at NetBase. Please feel free to forward this.

Software Architect
Location: Mountain View, CA

NetBase, a well-funded, fast growing company with an impressive roster of top-tier Fortune 500 companies, seeks to grow its team with a hands-on software architect.

NetBase delivers Content Intelligence solutions that harness value and insight from any source, including the Internet, premium and enterprise content. NetBase reads every sentence inside documents, linguistically understands the content and powers breakthrough search experiences with relevant answers and insights. NetBase is being used by organizations that are recognized as global leaders in healthcare, publishing, manufacturing, consumer packaged goods and government such as Elsevier, Clorox, 3M, The U.S. Army, Pepsi and many more.

We seek a hands-on architect with extensive background in software development to translate business objectives into a technology vision and articulated architecture. Candidates should have a strong track record of designing and developing multi-tiered web applications that are high quality, scalable, and reliable. We prefer generalists who have driven feature development at every layer of the stack. We have a strong preference for large-scale text search expertise whether at a big search company or through experience customizing systems like Lucene or FAST. Also preferred are candidates with experience in applying NLP and Machine Learning to solving problems for Fortune 500 end-users.

Candidates should have excellent interpersonal skills and a track record of increasing responsibility. Those who are skilled in organizational needs assessment and driving change via consensus will fit in well on our team. Candidates should be able to establish credibility quickly and provide mentorship to team members. We target talented individuals who are resourceful, flexible, and aggressive about learning new things.

We are an Agile development shop. We do test-driven design and rapid iterative development and are looking for a like-minded architect to help us build for the future.

Requirements:
* 10 years work experience with 3+ as an architect
* Experience in large-scale, distributed, web-based applications
* Agile development methodology
* Deep knowledge of Java
* MS or PhD in CS
* Database design and SQL (MySQL a plus)
* Excellent interpersonal and communications skills
* High degree of integrity and drive
* Expertise in Adobe Flex, Flash and Python are nice to have

Authorization to work in the US and relocation are required.

To apply: Please submit a resume and cover letter via email to team@netbase.com with the subject of "Software Architect".

Riya rocks!

2009-04-17T15:55:00.000-07:00

I needed to find some pictures of my grandma and didn't have time to go through thousands of photos. I used illumin8 to find an easy face recognition tool and it led me to Riya. Riya quickly solved my problem.

All I had to do was upload all my photos, show it a few examples of my grandma, and then it found 77 pictures of her for me. That was so easy...and fun!

Here are the pictures of her, in case you're interested:

By the way, my Grandma makes the best chocolate chip cookies in the world. They are so good I've even brought them to our board meetings!

Material that can bend light around 3D objects making them "disappear"

2009-01-06T10:09:00.000-08:00

Hunting around on illumin8, I came across this very interesting innovation from the University of California at Berkeley: a material that can bend light around 3D objects making them "disappear".

source: http://news.bbc.co.uk/2/hi/science/nature/7553061.stm

Online Self-Assessment for Innovation Practitioners

2008-10-13T07:00:00.000-07:00

A Ph.D. in innovation management at Purdue named Brian Glassman contacted me recently about his online self-assessment for innovation practitioners. He explained to me that practitioners can take it to learn where their company is strong or weak in controlling idea generation and idea management, and can get some new thoughts about how to improve their own processes.

Here is a link to the survey:
http://purdue.qualtrics.com/SE?SID=SV_cVhcPUtwiO9ODzK&SVID=Prod

He said the survey takes about 18 minutes to complete.

USB twinkie

2008-09-22T17:23:00.001-07:00

I was gazing at my co-worker's shoe during a meeting today and noticed it had a little round metal hole in the side of it. I imagined that it was a jack for plugging in electronic devices. Suddenly his shoe seemed a lot more exciting. It practically made me laugh. But since it was an inappropriate time to laugh during the meeting, I snapped back to attention. Sure enough, my eyes lit once again upon his shoe and off my mind raced again.

I realized you can make practically any ordinary object suddenly intriguing if you add a jack on it for electronics. Add USB to your shoe and just think what people would imagine it does.

USB to a microwave oven?

USB to a coffee cup? Warms your coffee for you?

USB twinkie?

Hat with USB adapters sticking out of all sides? Sounds like a good Halloween costume.

USB adapter for a USB adapter???

California Academy of Sciences Grand Re-Opening

2008-09-22T17:19:00.001-07:00

The California Academy of Sciences is holding its grand re-opening this weekend! I fondly remember going to the original one in San Francisco's Golden Gate Park as a kid. The dinosaur skeletons, the African wing, the greasy hamburgers in the cafeteria--I remember them all like it was yesterday. Anyway, don't miss a rare opportunity to be one of the first to step foot into a brand new science museum.

More info can be found on their website: http://www.calacademy.org/

BEVIA

2008-09-08T13:06:00.000-07:00

One of Malcolm Deleo's first posts on his new blog is about his concept of BEVIA: Believe, Experiment, Validate, Integrate, and Adapt. I am very excited he has finally put pen to paper (er, hand to keyboard?) to share this idea with the world because it's truly insightful.

BEVIA is a model of process and organizational innovation. At it's core, the BEVIA model recognizes that people do not change all at once, most of the time. To adopt a change, each person and the organization as a whole must go through a process beginning with Believing that the change is the right thing to do. From there the change spreads as it's tested (Experiment & Validate). In the final stage, the idea is Integrated and the organization Adapts to the change.

I can't emphasize enough how this change takes place at multiple levels in an organization. If you lead one department through the phases of BEVIA, it doesn't mean the whole organization has gone through BEVIA. If one department has been successful in adopting a change, it could help accelerate the process for another department, but don't assume it. And, as Malcolm points out, it's important to recognize that each person goes through the phases of BEVIA too.

I think when people talk about organizational change being hard and time consuming, it may be that BEVIA helps us model what's actually making it so slow. Consider the Believe phase, for instance. Individual people may Believe quickly, but if one person takes longer, that can make it harder to get to the Experiment phase. While they're waiting for the organization to unanimously Believe, some people who originally believed may begin to doubt as a result of the lack of progress. Then they have to be re-sold on the idea. While they're being re-sold, the new believers might begin to doubt again. Thus ideas can bounce around among members of an organization for a long time before enough people Believe for it to advance to the next phase in BEVIA. Maybe that's what makes organizational change seem so slow.

I wish I had known about BEVIA when I proposed the Open Innovation Blueprint because it adds some critical missing pieces to a plan to implement organizational change.

Announcing Malcolm Deleo's Blog

2008-09-08T12:59:00.000-07:00

Malcolm Deleo, a close member of my professional network and a good friend, has just started writing a blog. Malcolm has tons of experience innovating and is a fountain of ideas, particularly around how to drive innovation through a corporate culture. I highly recommend checking out his blog at http://innovationmuse.blogspot.com/.

Chief Innovation Officer Executive Seminar

2008-09-08T12:51:00.000-07:00

I just received an announcement about this seminar for Chief Innovation Officers, it sounds like a good seminar worth checking out. For more information go to:

http://archives.subscribermail.com/msg/322079d574774b7eabbbe5ce4695fe78.htm

Interesting Uses of YouTube

2008-08-15T23:50:00.000-07:00

Here are some interesting things I’ve learned people are using YouTube for.

* Police use YouTube to solve crimes - Reuters reports that YouTube has helped Ontario police find a man they believe to be responsible for a murder at a local night club. (source) (source) (source) (source) (source) (source) (source) (source)

* Letting the public act as investigators - "It's our hope that releasing the audio to the public we can come closer to finding Mr. Wali's killer," said D/Sgt Pauline Gray. "I'd be interested in what the public thinks and whether they recognize the suspect's voice.". She said YouTube has been used to encourage witnesses or sources to come forward in past homicide investigations, but never with an audio recording. Click here to visit the YouTube page with the posted audio. "We're using all these great new tools at our hands," Gray said, of posting the audio to YouTube, and letting the public act as investigators. (source)

* Find missing children - By the end of the second week of August, when the McCanns marked the 100th day since Madeleine's disappearance by launching a YouTube initiative to help to find missing children, the Portuguese media had suggested that the McCanns could have killed their daughter, and the British press was not shy about repeating and even revelling in the "monstrous slurs". (source)

* Virtual bands - Three musicians that do not know each other recorded a song together. (source)

* Starting a global yawning epidemic - Mythbusters, which is a pretty cool show in it's own right, is using youtube to try and start a global yawning epidemic. (source) (source)

* Video resumes - Schnurman expects to use YouTube for mass distribution of the resumes and hopes to convince law schools in New York, New Jersey and Connecticut to incorporate this project into their career development offerings. (source)

* Broadcast sentencing hearings - Judge James Kimbler might just be my hero. This crafty judge is using YouTube to broadcast sentencing hearings to help shame criminals for their actions. The Ohio-based judge has been quoted as saying he thinks it's a good use of technology. Kimbler's been known to use shame tactics in his courtroom before - the use of YouTube is new. (source)

* Crisis response - Based on how they are using YouTube and podcasts for crisis response , it is clear that the Romney campaign has an understanding of how to use the web in this day and age. (source)

* Using YouTube to “blow the whistle” - An engineer at Lockheed Martin used YouTube to blow the whistle on problems with a large Coast Guard project. (source)

* Mexican drug cartel has been using Youtube - More recently the Mexican drug cartel has been using Youtube, in a sort of cyber drug war, as individuals from rival gangs are killed or tortured the footage is then uploaded to Youtube. (source)

* Chain letters in YouTube comments - Don't know how common this practice is, but I just saw my first "chain letter" in a YouTube comment: (source)

* Doctors give advice to patients in rural locations - Doctors in rural Wales are using YouTube to give health advice to patients. (source) (source)

* Politician congratulates another - Blair uses YouTube to congratulate Sarkozy. (source)

* As a free method of advertising - So I come across a story on CNN about how a toy company used YouTube to create a Viral/Word of Mouth Marketing Buzz for a new remote control helicopter. (source) (source)

* Companies hosting competitions for users to create ads - H.J. Heinz Co. and AT&T Inc. have also used YouTube to host online contests. (source)

* CNN uses YouTube during presidential debate - CNN's use of YouTube for tonight's Democratic presidential debate is being hailed as groundbreaking experiment in democracy. (source)

* Discover new musicians - Video-sharing website YouTube has launched a major music promotion to discover unsigned US bands and musicians. (source)

* Video diaries - lonelygirl15 was a screenname attached to a teenage girl named "Bree" who used myspace and youtube to display diary entries predominantly in video form. (source)

* Cyber bullying - I think Youtube is a terrible website that enables teenagers to humiliate other children. (source)

* Host video walking tours of homes for sale - Real estate agent Krista Miller used YouTube to host a video walking tour of a home for sale. (source)

* Find passwords for FTP sites - The latest Google Hack is using YouTube to find users and passwords for ftp sites. (source)

* Literacy training - Use YouTube for story hours, gaming nights and literacy training. (source) (source)

* Streaming course content - While Berkeley's offerings on iTunes U are mostly available only for listening, and while its videos on its existing, proprietary webcast.berkeley portal are confined to the Real format, YouTube opens streaming course content to virtually anyone with typical bandwidth and a Web browser. (source)

* Teaching ESL - ESL teachers are using YouTube to illustrate the use of everyday English and to help their students improve their listening skills. (source)

Awesome site for cool gadgets

2008-08-07T16:21:00.000-07:00

I found an awesome website with illumin8 for cool gadgets: www.vat19.com

Interesting uses for Alarm Clocks and Interesting Alarm Clocks

2008-08-07T16:20:00.000-07:00

Here are some interesting uses of alarm clocks and alarm clocks that do interesting, unusual things or wake people up in unusual, better, ways:

Alarm clock that wakes you up by wind chimes – The Wind Chime Alarm clock combines punctuality with the sound of metal pipes clinking against each other. (source)

Activating a hearing aid – The beauty of poor hearing is you can sleep soundly if you can just depend on your hearing aid turning on at the right time. (source)

Pillow vibrator – An alarm clock that vibrates your pillow to wake you up (source)

Alarm clock to alert students to take breaks – Many schools now use Alarm Clock-type desk accessory to alert students to take a break once or twice an hour. (source)

Alarm clock that hides itself so you have to get up - Researchers at the Massachusetts Institute of Technology developed a roving alarm clock that finds a new hiding spot and waits to go off again when the snooze bar is pressed. (source)

Cure self-mutilating behavior – “Have the victim set a few minute time limit using an alarm clock to delay self injury and note how the intensity of the urge changes.” (source)

Awaken person through light – Oregon Scientific RM313PNA Projection Alarm Clock is an attractive blue atomic clock that beams a fixed projection onto the ceiling of a darkended room. (source)

Headset for sleeping on trains (cancels out noise and wakes you up) – It is an object of the invention to provide a combination noise blocking headset and alarm clock which is capable of blocking out ambient noise of a commuter train or subway in order that a commuter will be able to nap or read without distractions. (source)

'Reverse Alarm Clock' That Keeps Young Children Sleeping (source)

Alarm clock that deduces emotions – Our assignment was to see if we could come up with a concept for an alarm clock that would enable us to deduce a whole range of emotions from the way people use it.' (source) (source) (source) (source)

Remind people to be mindful – A second object is to provide an alarm clock system for facilitating a moment of mindfulness, awareness, stress reduction and quiet at random times during the day. (source)

Alarm clock to get out of bad dates – I myself (please forgive me Lord) have used the alarm-clock mode of my cell-phone to get out of bad dates. (source)

Improve voter turnout – A London-area municipality has launched a new Election Alarm Clock service designed to improve voter registration and turnout. (source) (source) (source)

Replicate sunrise – Philips has developed an alarm clock that replicates a sunrise to wake you up naturally, making you more refreshed when it's time to get up. (source)

Lumalive

2008-08-02T00:27:00.001-07:00

Just found out about a really cool new technology from Philips called Lumalive. Lumalive combines multicolor LEDs (light-emitting diodes) into textile fabrics. It allows you to create dynamic images on articles of clothing, furniture, and anything else covered in fabric.

Some obvious applications are advertising and art. But I haven't seen much else discussed about how to use this technology to solve important problems yet. I wonder if it could be used as a dynamic camouflage? As you walk past walls of different colors, could it detect the color changes and respond to them like a chamelion? Could it pass through enough detail to make you look invisible?

Another interesting application would be a mood shirt. Like a mood ring, it would change colors depending on your mood. To detect mood, the shirt could be combined with various biometric sensors such as galvanic skin response. Most people wouldn't want to wear such a shirt, but it could be really fun for people at a party who want to try something kind of edgy.

What else could the colors and images on these shirts be tied to in your environment?

I remember talking to people at nTag a few years ago. They had interesting social technology that would tell two people meeting at a conference what two or three things they had in common based on their profiles. They displayed this information on name tags. Maybe it would be more interesting to show it on these shirts?

Or what if at a speed-dating event, various algorithms for matching peole who would be interested in each other could make it so participants milling about a party would suddenly have their shirts turn the same color if they were identified as matches whenever they were less than 5 feet from each other?

What other problems are there with shirts and other apparrel that could be solved with Lumalive? What a fun technology. Thank you Philips!

Interesting uses of nail clippers

2008-08-02T00:24:00.000-07:00

Here are some novel uses of nail clippers:

□ Remove burnt spot from carpet – "Use a good pair of scissors or a pair of nail clippers to cut the carpet fiber being careful only to remove the damaged section." (source)

□ Cut pills for desired dosage – "People have also used razors, Exacto knives, and nail clippers to make really small doses." (source)

□ Cutting yarn on plane where scissors are banned – "To cut your yarn inflight you can use nail clippers or a box of floss." (source)

□ Make a short card to cheat or do magic tricks – "You can use a nail clipper to make a short card. Just cut like a 16th of an inch off the corner, then round it with a nail file." (source)

□ Opening difficult bottles – "Childless DIYer Kyle describes how to use a thumbtack, a spoon and nail clippers to disarm difficult-to-open bottles of three varieties--the squeeze and turn, the push down and turn and the push tab and turn kinds." (source)

□ Open pill packages – " Just today I had to use a nail clipper to open a pair of cold remedy pills, because instead of using the "easy" way to tamper-proof a pill (plastic shell, peel-off paper backing, then push out the pill) they decided to put two non-peelable layers to seal the plastic bubble, then expect you to be able to cut the pack in half just because there's a 1/8" pre-cut in the plastic." (source)

□ Prove virginity – "Rodriguez uses nail clippers to draw blood from her own fingertip, swipes her blood on a cloth (without anyone but the bride seeing) and the bride presents the red-specked kerchief to everyone waiting - saving her reputation and marriage." (source)

□ Trimming candle wicks – "Use toe nail clippers to trim wicks in jars in which scissors won't fit." (source)

□ Trimming your beard in prison – "Strangely enough, trimmers are still regularly removed from electric razors, forcing inmates to decide either to buy a clear case model or simply use nail clippers to trim beards and mustaches." (source)

□ Trimming lashes uniformly – "I've also heard that a pair of baby-sized nail clippers is the best way to trim the lashes to a uniform length and curvature." (source)

□ Cutting an umbilical cord – "An 18-year-old woman who gave birth to a baby girl in the desert used nail clippers to cut her baby's umbilical cord before being rescued by U.S. Border Patrol agents" (source)

□ Cut fishing line – "Nail clippers are probably the easiest and most effective way to cut fishing line." (source)

□ Trimming extra wire hanging from kids’ braces – "You may also try using a nail clipper or cuticle cutter to cut the extra piece of wire that is sticking out." (source)

□ Nicking seeds to help them grow – "I started in mid March, used a toe nail clipper to nick the seed, soaked for a few days, then planted in a small black pot, which I kept moist." (source)

□ Trimming a beak – "A pair of sharp nail clippers may be used to trim beaks and nails, but care must be taken not to cut to far." (source)

□ Trimming teeth – "To trim those teeth we use large dog nail clippers or you can use a dremal tool with a small grinder attachment." (source)

□ Doing bonsai – "Use his toe nail clippers to trim your bonsai tree." (source)

□ Trim nose hair – "Women are better off not knowing that we eat with our hands the minute they leave the room or that we use their nail clippers to trim our nose hair." (source)

□ Break packing straps – "Use plastic mallets, nail clippers & sheet metal cutters for breaking the straps." (source)

□ Cracking beads for crafts – "A pair of pliers or a nail clipper is a really good tool to crack the bead in half." (source)

□ Escape from jail – "Using nail clippers to fiddle with a lock, Bobby Marcantel escaped from the Parker County jail." (source)

□ Use in recycling – "For GMA recycling operations, the company uses the Heartland Fabrication single-head nail clipper to prep lead boards and remove broken stringers." (source)

□ Marking turtles – "Use nail clippers to mark very small turtles." (source)

□ Remove lesions – "Softened, affected lesions were removed with a nail file or nail clipper." (source: Japanese Journal of Medical Mycology)

□ Remove burrs – "Mark, I use nail clippers to remove those burrs." (source)

□ Snip off blisters – "Suria decided to walk bare footed, her feet were still painful because she snipped off the top of her blisters with nail clippers!" (source)

□ Tighten screws – "He uses his nail clippers to tighten screws, cleans his fingernails with a pencil, and writes with burnt matches." (source)

In my research I also found a really cool site of all kinds of interesting uses of common everyday tools. The site is called ParentHacks: www.ParentHacks.com.

Here was one I encountered: "The hum of the airplane put her to sleep (yay!) but random noises, especially the PA system, would wake her up. We found we couldn't be heard without speaking very loudly right over her, which we didn't want to do (wake-ups). So my husband got two little Dixie cups from the lavatory, and I used baby nail clippers to poach a couple feet of yarn from the end of my knitting project, and we made ourselves an old-fashioned "phone" that reached across her seat and let us speak quietly. I'm sure we looked like idiots, but it worked! Want more tips re: kids + planes?" (source)

Announcing illumin8 Blog!

2008-06-26T16:48:00.000-07:00

My company, NetBase, and Elsevier partnered this year to launch illumin8, an integrated research solution that helps R&D professionals find solutions faster. We have also created a blog you may wish to track at http://blog.illumin8.com/.

Biofeedback tools for consumers

2008-06-26T13:48:00.001-07:00

A long-term interest of mine has been biofeedback, using technology to gain insight into our own behavior and supporting our efforts to improve ourselves.

I was really excited to learn a consumer product is now available to help with biofeedback, the StressEraser. This product gives you a visual display of your heart rate. Then through focused breathing you can see how you are affecting your heart rate. This product is top on my wish list for this year.

A friend of mine, Matthew Lindgren, told me about a much cooler biofeedback device, OpenEEG. This device would show you your EEG to give you a sense of your own brain activity while you are meditating, etc. While StressEraser is very cool and commercially available, OpenEEG would show you something about your body that you probably cannot detect. It's hard to monitor your breathing, but you can do it. But monitoring your own brain activity is really hard because it's difficult to detect anything without technology and, moreover, monitoring your brain is hard because you need your brain to monitor your brain. Only a tool could help in this situation.

I've thought of other biofeedback tools but they'd require a level of sensing we may not have technology for yet. Imagine one that would help you lose weight by detecting the causes of the hunger in the first place, allowing you to manage yourself before you get hungry. Another idea is something that would help you achieve your goals by reminding you to do a particular action whenever you find yourself in the situation where you want to start doing this particular action. This would be much better than a device that would simply trigger at a particular time of day like an alarm. It would have the ability to detect when you're feeling sad or angry, allowing you to choose a different course of action if you have anger management problems. Or it could alert you when you're feeling anxiety that you may not notice yourself in a stressful situation. Knowing you're anxious could help you realize to do some simple things like breathe to calm yourself down. Or suppose you want to learn to smile more when you meet people. The device could detect when you've met someone and alert you to smile.

Interesting uses of cell phones

2008-06-17T18:26:00.000-07:00

I came across some interesting new uses for cell phones.

1. Develop self-esteem and focus positive energy on your love life (source)

2. Buy a Coke at a drinks dispensing machine (source)

3. In the Philippines, more than 4 million people use their cell phones as virtual wallets to buy things or transfer cash (source)

4. Collect ecological momentary assessment (EMA) data (source)

5. Bet on a horse race (source)

6. Activate vehicle engine (source)

7. Japan creates cell phone that recognizes its owner (source)

8. Buy groceries (source)

9. Detonate bombs (source)

10. Target safe groundwater aquifers (source)

11. Unlock a door (source)

12. Activate a hearing aid (source)

Innovation in Law or ... "In-Law" Innovation

2008-05-15T11:53:00.000-07:00

Moments ago, the California Supreme Court legalized queer marriage. Here is the actual opinion document detailing the decision:

http://www.courtinfo.ca.gov/opinions/documents/S147999.PDF

How Lead User theory began

2008-04-22T16:46:00.000-07:00

Now that I've been studying user-centered innovation for some time, I began to wonder where the first insight into this phenomenon came from. So I did some research and found a very detailed interview with Eric von Hippel in which he describes the genesis of his Lead User theory. I'm copying and pasting the portion I found most relevant but the whole interview is probably just as insightful:

Well, when I first came to MIT, ideas about how new products and services should be developed were based upon a manufacturer-centered innovation model. This model, in essence, instructs manufacturers to "find a need and fill it." The basic idea is that it is the manufacturer's job to accurately understand your needs, and then make the perfect product for you. In fact, this is still the standard model of the innovation process taught in business schools today, which is one reason that understanding of user-centered innovation is still at such an early stage.

Before I went for my Ph.D., I was an inventor and participated in a startup - and tried to rely on the manufacturer-centered innovation model as I had been taught to do. Full of confidence, I went off to talk to suppliers saying, "Well, here's a need I have for a new product you do not currently make." The uniform supplier answer was, "No, you don't. You need what we sell." It was just so funny.

For example, once I needed a fan that was higher-performance and smaller than anything out there. And so, I asked this company to develop it and sell it to me. I said, "I need it." And they said, "No, you want our standard one," and I said, "No, I don't." And then they said, "Well, it is impossible to build what you want - it's against the laws of nature - so you have to take what we have." So, I went to Princeton with my problem and I got an aerodynamic specialist there to design me the fan. I then took it to the manufacturer who said, "Well okay, we'll make it, but you have to buy the tooling. And you have to pay for them 10,000 at a time, and so on and so forth." So, we did all that. The fan was wonderful; it did exactly what we needed in the fax machine we were designing. (The startup I worked for made fax machines.)

A few weeks later, the fan company reps called me up and said, "You know, it turns out a lot of other people want your fan too. Can we use your tooling to produce it for them?" I said, "Sure, talk to our manufacturing guy, and I am sure he will arrange something." The arrangement was made, and shortly afterwards that company put out these ads saying, in essence, that "via our deep understanding of your needs, we knew you needed this new type of fan. And so, of course we developed it for you, our beloved customers."

I found this so interesting. I thought to myself, clearly the manufacturer-centered innovation model did not work in this instance. But there is such a strong belief in that model that the fan supplier thinks it did.

Anyway, I brought that insight with me to MIT. I began my own research with the idea that, probably, it was really the users who were the innovators, and often not the manufacturers. That was way back in 1976, and things just built from there. I then realized that I had to join with other innovation researchers to build a big enough playground of data and concepts in the arena of user innovation to make it attractive for other people to be able to do their own work. That is, we had to generate enough findings related to user innovation, and create a robust outline of a theoretical framework, so that other people would be interested and would start to plug into it. All that took a long time, but eventually, we got here.

Starting about 2000, user innovation related to the Internet, blogs, and open-source software began to become very visible. As a result, many people began to think, "Oh gosh, maybe the manufacturer-centered innovation model isn't the only way to go. Maybe innovation is really user-centered, and 'user-developed content' really does matter!"

At that point I and my academic colleagues were in a position to offer an academic framework to help people in their early efforts to make sense of a user-centered world. Anyway, that's my view of how things have evolved. As my colleagues can also tell you, it has been a really long slog. Wonderful colleagues who have helped are many. Some who have been very important during the past several years are Professors Dietmar Harhoff, Nikolaus Franke, Joachim Henkel, Christian Luethje and Karim Lakhani. It's much more fun to do this kind of early work with good friends. We can cheer each other up when our work gets dissed, as it regularly did in those days.

Thank you Tom Austin for doing this great biography. Here is a link to his complete article: http://www.gartner.com/research/fellows/asset_172822_1176.jsp

Maker Faire 2008

2008-04-21T09:11:00.000-07:00

The annual Maker Faire is on for May 3-4, 2008. It's a great place to see what creative people are doing in the yay area.

Maker Faire: http://www.makerfaire.com/

I went two years ago seeking to understand creativity: http://innov8or.blogspot.com/2006/04/art-or-invention.html

Commercializing Management Science

2008-03-13T09:48:00.000-07:00

Universities around the world make some of their money by commercializing the results of their research. A professor has a scientific breakthrough, a grad student develops a technology based on that breakthrough, and a company spins off to commercialize that technology. It happens in the hard sciences all the time, so why not the soft sciences too?

Commercializing Management Science is how I've always thought about what I've been doing since business school. In recent years, the academic leaders of Innovation Science, a sub-field under Management Science, have produced scientific breakthroughs that have advanced our understanding of how innovation works. Professor Eric von Hippel discovered Lead User behavior, Professor Henry Chesbrough discovered the Open Innovation phenonmenon, and Professor Clayton Christensen discovered Disruption Theory and the Jobs-to-be-Done framework. These discoveries are the scientific underpinnings of the technology powering my company's products and I owe great thanks to these fathers of Innovation Science for their contributions. Thanks guys!

Soft sciences that focus on understanding human behaviour are gaining more and more credibility as legitimate scientific fields. I'm proud to be helping the cause by showing that these scientific fields also have technology based on their breakthroughs that can be commercialized and put to good use by industry.

Designer genes

2008-03-06T17:21:00.000-08:00

In high school I interned at the Lawrence Berkeley National Labs on their Human Genome project. The project, along with others like it, aimed to sequence the human genome. It was estimated to take over ten years and it ended up taking about that long.

One project I worked on was: Adaptation of Commercial Robot for Genome Library Replication. What a cool job for a geeky teenager. I mean programming a robot to assist in one of the most important scientific initiatives of our time, how cool is that!?

Anyway, now that the human genome has been sequenced it is beginning to enable what some people are calling Personalized Medicine. Imagine if drugs were tailored to match your own genetic profile? That's what Personalized Medicine is all about and it wouldn't have been possible without the incredible work I did in my spare time as a high school student...just kidding.

Seriously though, I was thrilled the other day when I bought my first product based on the the human genome project. It's a gene analysis kit for detecting your genetic susceptibility to heart disease. You scrape the inside of your cheek 20 times with a swab and sent it away to the company for their analysis. Then they send you a report. I guess it seems cool and I'm thrilled to buy a product based on this emerging science but do I really want to know? Either it's going to tell me I'm susceptible and I'm going to feel even more obligated to live a healthy lifestyle. Or it's going to say I'm not susceptible and I'm going to slack off and end up getting sick from an unhealthy lifestyle.

Oh well, when it comes to innovative products I have a hard time saying no. So here goes...scrape, scrape, scrape, scrape...

Announcing NetBase and illumin8

2008-02-26T12:03:00.000-08:00

We have renamed Accelovation to NetBase, check out our new homepage: http://www.netbase.com. I loved the original name, a lot of customers did too, but in the end it was just too hard to spell. NetBase reflects our continued vision of organizing and interrelating digital information for today's knowledge workers.

More importantly, we launched a new product this week with our partner Elsevier. Called illumin8, this new web-based research tool is designed for R&D professionals to extract and analyze solutions from Elsevier's rich scientific content and from the internet in general.

I fondly hope that the widespread use of illumin8 will lead to unprecedented levels of economic prosperity in the world by accelerating the fundamental step of innovation, namely connecting those in need with solutions to address those needs.

For the official press release, check out:

http://www.elsevier.com/wps/find/authored_newsitem.cws_home/companynews05_00878

Chindogu

2008-02-23T09:54:00.000-08:00

My partner Dee recently showed me a book on Chindogu, the Japanese art of ironic invention. They should be considered inventions in that they are solutions to problems. However the problem they solve can oftentimes be fanciful or the solution itself may ironic drawbacks that makes them effectively useless. Chindogu is often called the art of unuseless invention (wikipedia).

One that solves a questionable problem is a pair of shoes where the sole of the shoe has dog paws so that the wearer can feel more like a dog leaving paw prints in the sand. That was in the book I read.

I was thinking this morning about my mouse and how it must go hungry all the time. I mean my computer mouse. So I decided to give it something to munch on. I changed one of my desktop icons into a piece of a cheese. I click that icon pretty frequently so it will allow me to feel I'm taking care of my pet.

Maybe I'll think about removing this blog posting some day. That's because one of the other properties of Chindogu is sometimes the inventions embarrass the user :-)

Change Management Problem Introducing User Toolkits for Innovation

2008-01-29T10:09:00.000-08:00

von Hippel and Thomke proposed "user toolkits for innovation" to address the age-old problem of communication breakdowns between engineering teams and product users that result in users not getting what they want. User toolkits are a way for engineering teams to expose enough control over their product for users to be able to customize or configure the product to address their specific need. Examples include a food flavorings company that provides buyers with a toolkit to create their own flavorings, a product category where it is difficult to create products because it is hard for buyers to describe in English the type of flavoring they want. User toolkits are an approach to innovation because they put the solution-building task into the hands of the person who has the problem. Toolkits are another way of applying the maxim that necessity is the mother of invention.

The user toolkit idea has a lot of merit as one solution to the communication problem companies face with their customers. But there is a change management problem in getting manufacturers to develop toolkits for their users. The problem is that some manufacturers believe they erode margins by not providing the full and complete product to end-users. They think that making users have to customize products is tantamount to shipping an incomplete product. If the users have to finish the product, they would not want to pay as much for it as they would if the product did exactly what the consumer wanted right out of the box.

Perhaps companies are right in believing that products are not as valuable if they require additional work on the user's part to configure them to their needs. Then again, maybe companies are misunderstanding the role of a user toolkit. Perhaps what companies are supposed to do is provide user toolkits in addition to complete products. In the beginning, a company may not be able to identify a mass-market for a specific complete product, so it should just put a user toolkit out there and then learn from consumers what are the most popular and valuable ways to configure the toolkit. Once a broadly-applicable adaptation based on the user toolkit is identified, the company can productize that adaptation and sell it for a higher margin than it sells the user toolkit for.

Finding solutions to Pulmonary Hypertension

2007-11-09T11:08:00.000-08:00

Last weekend I went to a 5K race held at Stanford to benefit Pulmonary Hypertension (PH). This is a very serious disease that requires a heart and lung transplant in some cases. I actually met a survivor of such a transplant at the race, it was awe inspiring to find out that someone who looks so healthy could have undergone such a traumatic operation.

One of the speakers who kicked off the race was one of the preeminent medical researchers for this disease. What caught my attention was him saying there were only 6 known treatments for PH and no cure. That caught my interest because right now I'm doing a lot of testing of my company's software for finding solutions to problems.

I found out what the known treatments are and raced home to look for solutions to Pulmonary Hypertention on Accelovation. I was hoping we'd miss something so I could file some juicy bugs for our engineers. I just love filing bugs. But drat, Accelovation nailed the search! It found all six of the known treatments including who manufacturers them, their alternative names, and hundreds of other partial treatments.

While I didn't get to file any bugs, I was--of course--pleased to validate that Accelovation's tool is doing such an excellent job at finding solutions to problems.

Anyone who reads this post who has Pulmonary Hypertension can contact me for the result set from this search, particuluarly if you're interested in knowing what's on the cutting edge in the solution space for this disease. More general information about the disease can be found at www.phassociation.org.

Myth of Market Size

2007-09-11T11:35:00.000-07:00

One of the most frustrating questions to be asked if you’re an entrepreneur is “what is your market size”? Investors, recruits, and even your friends ask this question when you’re starting a new business. As a matter of practice, it is very difficult to know your market size, even in an established market where you’re disrupting a known purchase.

The reason is it is hard to know exactly how many people or companies have the exact problem you can solve. In Disruption Theory parlance, you don’t exactly know how many people have the job-to-be-done that you can fulfill.

Many times, folks will take a big number like the population of people age 50 to 60 in the United States and say that 10% of them are the market. But the assumption tied up in that 10% is that those people have the problem you can solve, they actually want to pay for a solution, and that you can solve it better than a competitor. That is a very hard thing to know until you have enough sales data to look retrospectively at a market.

This leads to another point which my co-Founder Jonathan Spier has so wisely put on many occasions. The only way to start a business is, well, to start it. To me, this means you can’t have all the info you’d like to have, so you have to start with what you’ve got. If you don’t, someone else may. Same thing with investors. Each type of investor needs to have a certain minimum level of information to know whether they want to invest. When selecting an investor, target investors whose questions you are ready to answer. Same with recruiting employees for an early-stage business.

Met the father of Netnography

2007-06-08T15:06:00.000-07:00

Yesterday I had the opportunity to speak to the father of Netnography, Professor Rob Kozinets. If you’re not already familiar with netnography, it’s something to be aware of if you’re a market researcher or innovator. Netnography applies the techniques of ethnographic research to the Internet.

Here are some of its benefits, as drawn from “The Field Behind the Screen: Using Netnography for Marketing Research in Online Communities” (Journal of Marketing Research, Feb. 2002):

Benefits of Netnography

Netnography is faster, simpler, and less expensive than traditional ethnography
Compared with focus groups and personal interviews, netnography is far less obtrusive, because it is conducted using observations of consumers in a context that is not fabricated by the marketing researcher.
More timely than focus groups and personal interviews.
Netnography provides marketing researchers with a window into naturally occurring behaviors.

In talking to Professor Kozinets I learned that the field of netnography began circa 1996 as an offshoot of his ethnographic research on Star Trek fandom. It turned out that a lot of the fans had taken the community online. Kozinets coined the term ‘netnography’ when he began studying online Star Trek fans.

The field of netnography has two sub-fields:

Observational Netnography
Participatory Netnography

Observational netnography is where the researcher learns about the community by studying the members of the community. In participatory netnography, the researcher becomes a part of the community and posts to the community like its other members. Here, the researcher learns by doing.

This distinction reminds me of a new favorite distinction of mine: the etic and the emic perspective. Etic perspective is an outsider’s view and emic perspective is an insider’s view. Therefore, observational netnography gives the researcher an etic perspective and participatory gives an emic perspective.

Should I take the plunge?

2007-03-12T14:54:00.000-07:00

Those who wish to start a company face a big question: should I take the plunge? I've seen many struggle over this question. I think a lot of times they're hoping to get one more piece of information that will help them feel comfortable with the risk level before they take the plunge. The problem is, when they get that piece of information, a lot of folks identify another important question they'd like to answer before they'll actually take the plunge.

A few articles I've read in the past year offer a different way of looking at the problem. One from HBR suggests that a company shouldn't necessarily go after an opportunity with a defined strategy but should expect to run experiments along the way until they figure it out. Internally the company should organize as a portfolio of experiments, experiments designed to obtain the information needed to define the strategy.

While that's advice for a large corporation, it applies to the lone entrepreneur as well. Basically, rather than holding back on taking the plunge, recognize that in order to get the information you need to feel more comfortable you'll need to commit some resources--your time, effort, money, contacts, reputation, etc.

It's definitely a good idea to seek out the information needed to secure commitment from other stakeholders (e.g. visionary customers, investors, early employees, etc.). But it's important for the entrepreneur to recognize that obtaining some of that information will require running some experiements and that will require the commitment of some resources, in other words taking the plunge.

Another way to look at it is to structure 'taking the plunge' in phases. You say to yourself, "I'll test x, y, and then z. If x pans out, I'll put in some of my own money to test y. If y pans out, I'll put in some more money to test z. And if z pans out, I'll quit my day job, and figure out the next set of experiments, without really knowing what those ought to be right now."

Some folks in the entrepreneurial community talk about 'the engineering mindset' that has to be overcome in order to pursue an opportunity in the absence of information about viability.

Ho Nam on Conviction, Balancing Open Mindedness with Skepticism, and Herding Sheep

2007-03-09T17:02:00.000-08:00

Ho Nam wrote a very thoughtful blog entitled Herding Sheep that resonated with me. It reminds me of a quote that I saw on a plaque on my grandfather's office wall when I was a kid. It said:

"Protest against the rising tide of conformity"

This is a philosophy that inspired me all throughout my youth. While I have had to learn to conform where appropriate, like by sporting Brooks Brother shirts to board meetings :-P I still have this philosophy in mind. In fact, I inhereted the plaque from my grandfather and it's been the only piece of art hanging in my house for the past 6 months.

Creative Idea – Go fish with socks to fold the laundry

2007-02-05T14:57:00.000-08:00

This is a helpful game for getting an annoying chore done. My daughter and I came up with it. I had a bunch of socks that needed to be folded, about 12 pair total. Each pair had a slightly different pattern because they were dress socks. We stuck them all into a bag and ‘shuffled’ them. I then ‘dealt’ 3 to her and 3 to me. We put a pillow vertically between us to form a wall so we couldn’t see each others’ ‘cards’. Littlest ones go first, so she picked up a sock, showed it to me, and asked if I had its pair. I said, no, and then told her to “go fish” like in the children’s card game by that name. We took turns asking each other and making ‘books’ (i.e. folding the socks) until one of us ran out of socks to ask for. She had the most pairs of socks so I declared her the winner!

This is another example of creativity that the Arthur Koestler model of creativity helps us decompose. In “The Act of Creation” Koestler deduces from many examples of creativity that the act itself is a mental process of combining seemingly unrelated ideas one after another until a meaningful combination emerges that nobody ever thought of before. Koestler calls each unrelated idea a “matrix” which suggests that an idea is a collection of facts, assumptions, and habitual thought patterns. A creative idea is therefore a new matrix which Koestler says is always formed by way of combining two or more existing matrices. Other hypotheses of the process of creativity would have us believe that creativity is a rational process (cf. Goldratt’s Thinking Processes). Koestler, though, argues that rationalization is an afterthought. The creative process generates the initial notion of a connection between existing ideas and afterward the mind proves its validity seemingly in an effort to convince itself of the connection generated by the subconscious creative mechanism.

Back to the sock game…the first matrix is sock folding (boring!). The second matrix is the game Go Fish (fun!). Using the socks as the cards to play Go Fish produces the positive effect of making sock folding fun, a third new matrix!

My innovation motto

2006-11-16T10:15:00.000-08:00

In thinking back on my experiences innovating, a couple of themes emerge that I've condensed into this motto:

When it comes to innovation, dream with your head in the clouds and your feet on the ground.

Actually bringing an idea from concept to implementation requires a breadth of thinking. For invention, you have to be willing to free your mind of constraints, to dream a little. But to actually get something done, you've got be willing to look at data and be realistic about how to implement a dream.

Hence the need to dream while also remaining grounded.

That's what I think anyway...

Another air travel user innovation

2006-11-08T21:54:00.000-08:00

I was in an airport this afternoon with a dead battery on my laptop. Hunting around for a plug, I finally found one. Sheesh I thought. It's so hard to find a plug in an airport these days. And then it didn't even have a place for me to sit down! I either had to sit on the floor or drag a row of chairs over to the plug. So I sit down, plug in, and begin to work. A few minutes later this guy--who looked like a much more seasoned traveler than I--rushed over, busted out an EXTENSION CORD, and proceeded to plug it into the wall, unwind to a length that allowed him to sit down comfortably (okay relatively speaking) at a bench, and work. I then overheard him talking on the phone to someone about how he had just been in 3 airports that day or something. It just goes to show that the most advanced users will find anything at their disposal to innovate.

So here's a business idea: set up kiosks selling overpriced extension cords in airports, only don't call them extension cords, call them airport life savers.

I'm reminded of user innovation yet again as I travel to Boston to present to the MIT Sloan School of Management where Professor Eric von Hippel et al. are conducting an executive education conference on innovation. MIT Sloan hosts a number of very high-quality executive education courses that I highly recommend. They select the best professors to spend an intense 2-5 days with managers, directors, VPs and more learning the latest and greatest in management science.

New, holistic thinking on business from Chesbrough

2006-11-08T21:43:00.000-08:00

Professor Hank Chesbrough of UC Berkeley has done it again, another insightful book about modern thinking on business, Open Business Models. Building on his first book, Open Innovation, Chesbrough goes beyond innovation to put it in the broader context of strategic management. Granted, I have only had opportunity to read 1 pre-release chapter of the book, but I can tell it’s going to be an important book for managers—across an entire enterprise—to study.

I say it speaks to managers from across an entire enterprise because the book presents a holistic way of thinking about innovation. Chesbrough provides a definition of the Business Model of a corporation that integrates elements from Marketing, R&D, IP Management, Supply Chain Management, Competitive Intelligence, Strategy, Sales, Purchasing, Finance, and even University Relations. HR and accounting weren’t integrated, at least not in the chapter I got to read, nonetheless it’s an impressively comprehensive synthesis of a vast array of strategic management topics into one concise construct, the Business Model.

By having a single definition of a Business Model, managers within a corporation finally have a common language to relate to each other when changes need to occur. This common language is critical to ensuring that innovation happens holistically. For instance, from a company’s end-customer’s perspective, it doesn’t make sense for the company to innovate on its core technology if it doesn’t translate into new marketing messages the customer would care about. To pull off integrated innovation, departments in a corporation need to recognize when changes in other departments—that is to say innovation in other departments—should ripple through the organization as innovation in other functional areas of the business.

The shared language of a Business Model allows one department or job function such as R&D to suggest a new idea that will have a certain departmental benefit but entails a change to the company’s business model. Because all other departments are listening for potential changes to the business model, a signal from another department that a change is coming to the business model can spark cross-functional debate, planning, and cooperation to ensure the change is implemented for global, not local, departmental optimization.

Maybe there will even need to be a new profession called the Business Model Manager, akin to a Product Manager, that’s responsible for looking after the health of the business model. Will there be a new management association for these professionals? The Business Model Managers Association (BMMA), or will it become an extension of Product Development Management Association?

FutureTrends Conference - 11-08-06

2006-11-08T21:42:00.000-08:00

Didn’t get a chance to blog as much today because my battery went dead. Here are some thoughts that are still fresh:

Everyone’s talked about YouTube.com and how much they were just sold for. Here’s a twist…suppose marketers bought the ability to doctor up YouTube videos in order to do product placement. So a popular video such as the laughing baby video might get a Huggies or Pampers box placed in the background. Is there enough 3D imaging capability to doctor an animated image into these videos? Don’t get me wrong, I think this is a sick idea, but it’s interesting.

Girls are taking pictures of their outfits in dressing rooms, emailing them to their girlfriends, and holding impromptu conference calls to get feedback from their friends. Are they going to give more credence to their girlfriends, the sales associate, or the messaging of the brand?

www.DailyCandy.com and www.CoolHunting.com are spotting cool stuff and telling people about it. It’s like the friend you have who always has something new to tell you about.

A brain researcher discovered the brain is the most ‘lit up’ in your everyday life when you experience an Ah-Ha moment.

When Anthropologie, the womens’ clothing store, eliminated the restriction on the number of garments a customer could take into a dressing room, there was an immediate spike in sales.

In the past, marketers have looked at variables such as age, income, zip code, etc. for segmentation. Now they need to look at more sophisticated qualities:

My passions
My beliefs
What causes me despair
What inspires joy for me
My lineage and traditions
Goals and aspirations
Family & friends
Qualities I value most
Personal development
Career

Faith Popcorn is known as the mother of Trend Scouting.

A few interesting tools from CScout, a Global Trends Research consultancy:

Trend Dashboard – Updates daily, similar to a blog, allowing employees to get involved to talk about a trend. It offers social ranking and crowdsourcing (employees uploading and commenting on ideas).

Trend Tours – This tool is about immersion and experiential innovation. It allows executives to experience a trend in order to “buy in”. They are a form of ethnography. For example, with BMW, they set up meetings for their senior managers to have in places where the trend is happening. This isn’t a tool with software like the Trend Dashboard, but more of a best practice.

Keywords in the Trend-scouting profession:

Trends
Driving forces
Insight
Trend Mapping
Trend Scouting
Unmet needs
Netnography
Ethnography
the Future
Human values
Segments / segmentation
Futurists
Observation
Qualitative data (I even heard “hard core qualitative data”)
Citation
Fads
Maturity (of a trend)
Rate of development (of a trend)
Innovation
Ideas
Core competencies
Innovation agenda
Futures thinking, futures work
Scenario Planning / Scenario Forecasting

FutureTrends Conference - 11-07-06

2006-11-08T21:39:00.000-08:00

8:00 Chairperson’s Welcome & Opening Remarks
Despite the fact that most companies won’t say in detail what they’ve found regarding trends, the real skill is in being able to relate the data back to your company’s brand.

Trends
1. Brand Collaboration
2. Green is the new black – Hybrid cars, e.g.
3. The power of people – Utube, etc.
4. Cause Marketing – e.g. Red Campaign for Africa from Gap, Apple, etc.
5. Experiential – It’s not just about product features but about engaging all their senses
6. Contextual computing – E.g. GE’s demo smart kitchen
7. Connectivity
8. Long tail – You don’t have to be a global brand, you can make $ in niches

8:30 Lifestyle Trends: How People Live (Colin Cowie)
Look for inspiration broadly. He spends half his time seeking inspiration and half giving inspiration.

There’s a trend in affordable luxury.

I think the types of goods Colin Cowie provides to consumers contribute value by simply being new. It’s the contrast principle maybe. The benefit of something new is that it provides a contrast in appearance, texture, etc. It breaks up monotony. Maybe occasionally something new also provides a new intrinsic benefit, but I’m wondering if it’s mostly the element of newness. How else can fashion from one decade come back into vogue thirty years later? It doesn’t stop providing intrinsic benefits, it just stops looking new, goes away, and then looks new again decades later.

9:30 Understanding the Mind: Why the current marketing model will collapse the market
You have to understand some basics about people to understand trends.

A majority in the room works more than 1000 miles from where they were born. The US is a migrant population. It’s as much of a genetic experiment as a social and political one.

The US is the only country based on the pursuit of dreams.

The American business model is based on self interest, individualism, let the market do as it will (it’s self-regulating). It works.

11:30 Tapping into the power of the Internet to advance new trends (HP)
How to analyze industry implications for technologies?

Methodology:
- Assess how the digital transformation will play out in your industry.
- Develop a model that connects the implications of the Internet to your industry’s digital transformation.
- Build products and solutions to take advantage of the new economic model

Case Study: Printing
Implications of the digital transformation and the Internet on printing.

The evolution of printing…what’s the history of the technology and the pace of change in the industry. First inkjet printing happened 30K years ago by mixing saliva and pigments and spitting it on a cave wall. 25K years later, the Gutenberg Press was invented. It was the first time we were able to mass produce print. It led to an information explosion and the Europe becoming the “center of the world”. In the 1900’s the Offset Press was invented to allow a new scale of mass printing, this remains the primary mode of printing even today. Then Silver Halide came along, allowing photography, and the user to be involved in the creation of the image. We then saw Laser Jet and inkjet printing which allowed the user to have their own print factory.

There are 5 reasons people print:

1. Permanent
2. Portable
3. Personal
4. Price effective
5. Scalable

Two key models they use:

1. Supply Chain Model (create => distribute => consume)
2. 2 x 2: who generates the content (users vs. professional) x run length, ability to cost effectively produce something (short vs. long)

Traditionally movies were professional content with a long run length, but now with sites like www.youtube.com you get user content with a short run length, not to mention you get more feedback.

1:45 Trending Process from Start to Finish: Getting Trends through the system (General Mills)

Trend Monitoring:
8 cross functional divisions:

1. Cereal
2. Pillsbury
3. Baking
4. Meals
5. Yoplait
6. Small Planet Foods
7. Snacks
8. Food Service

Cross functional teams involves not only R&D and Marketing but also functions such as finance.

Three audiences to speak to:

1. Company at Large
2. Established Products Brand Teams
3. New Product Brand Teams

They have to communicate to the whole company.

Consumer Insights is the name for consumer research at General Mills

There are a lot of internal definitions of trends, so they’ve developed a Trend Framework:

Macro Forces => Consumer values => Consumer behavior => Application for GMI

Macro Forces:
Economy
9/11
Natural Disaster
Tech Advances

Consumer Values:
Safety Security
Pragmatism
Luxury

Consumer Behavior:
Purchase of premium goods
Re-centering, time at home
Engagement in public service

The group has 8 people, which is part of a larger 180-person organization.

The 8 people are broken down by Growth Targets, Health

Four offerings from the group:

1. Companywide identification and communication of 4-6 trends
2. Deep content dives & divisional knowledge transfer
3. Trends speaker series & subscriptions
4. Agency outreach

Companywide identification and communication of 4-6 trends:
August 2005 presentation covered 5 trends: retail power, moms of today, wellness mindset, Hispanics, co-creation

With retail power they were looking at mindset. They were trying to point out the conundrum of where General Mills was focusing.

With moms of today, they were looking at a new way to think about moms. It’s easy to think “there’s mom, she’s making food, she’s giving it to her kids, she’s nurturing”. But their roles in the kitchen have changed. They’re delegating more: take-out, or having kids and dads help. How have the events of the last few decades changed how moms have approached nurturing.

With wellness, they were looking at products. How can you achieve indulgence with wellness? Consumers are learning that dark chocolate have beneficial antioxidants, for instance.

With Hispanics they were talking to the strategy group. The point was to “scare” senior management to commit to spending against Hispanics. So they showed demographic information to show how big the segment was. They were able to get senior management to commit to “use-it-or-lose-it” funding, meaning the BU had to use the funding on Hispanics or lose it at the end of the year.

With co-creation, we were looking at an innovation process change. We wanted consumers to become a part of the team.

Company Wide identify & communication of 4-6 key trends. They’d see the presentations, like it, do some brainstorming, applaud. So this year they did a trends exhibit. They had 1000 people from the company walk through. Each took an “ideation” pad. You’d walk through the exhibits and make notes, putting the notes on a wall at the end. Each exhibit had 2 monitors to show some ethnographic data, and a handout. Of the 6 stations, 3 were done by different groups. The organizer did the three others. For the audio tour component, they used their own A/V equipment and chose walkmen. They chose walkmen over DVD because they were afraid that the executives would accidentally press skip. They had 60 walkmen and were able to pull it off on the cheap.

For deep content dives, they offer Immersion Days. For 12-100 people, they give a presentation (either internal or external or a consumer panel). A ton of ideation exercises are offered to get the ideas flowing. In addition to Immersion Days, they’ll offer presentations, which include a discussion. Finally, they offer facilitated workshops to develop concepts. It’s one-time, lasting one-day.

They also offer trends speaker series. They have subscriptions to NPD, Yankelovich, GC Roper Reports, Mintel, iconoculture, etc.

Internal Innovation Consulting
The trends / insights team generates a lot of insights. The internal consulting group turns it into a business opportunity over 3-4 months.

The phases: Immersion > Integration > Synthesis

For their snacks division, the objective was to build a pipeline of healthy snacks.

* consumer interpretation of health trends
* Health mindset translated outside of food categories
* New healthy snack product & position ideas

For the Immersion phase, they leveraged existing knowledge both external and internal. It was leveraged through people, products, and printed material.

For external/internal data, the looked at newspapers, magazines, Gallup, Hartman, Mintel, Nielsen purchased reports, etc. They assigned 2 people for different sections (literally binders). They were given 1 week to read it and then get back together to synthesize the data.

They then used the Global New Products Database (GNPD). It consists of new products from all over the world. This uncovered global new snack search & examples and individual reviews.

For cutting edge, cross-category wellness products, they conducted competitive product review.

After Immersion came the Interact phase. In this phase, it’s important to do experiential learning. They look at extreme customers, such as Whole Foods (as opposed to like a Kroeger). One activity was to do the circle of friends activity. Each participant would do at-home circle of friends. They also conducted customer ethnography (in-store and in-home). Suddenly the seeds planted in the Immersion phase starts to sprout. They also conducted netnography, looking at blogs.

For the Synthesis phase, they conducted improvisation instruction. They used an improve instructor to help them get into the heads and bodies of the consumer. They then conducted some creative writing (hiring a Duke University Professor) exercise. The synthesis tools were designed to develop deeper empathy.

They put everything onto an opportunity map. Opportunities consist of short vignettes describing the problem from the consumer standpoint. They shared an example on heart health.

They come up with a pipeline of opportunities that will keep the division busy for the next 3 years.

2:35 Translating Trends into Actionable Business Opportunities

They were interested in the popularization of wine. It has traditionally represented aristocracy. But in the last 20 years it has become more commonplace.

Their approach was to get to know the category and identify the driving forces behind this trend. Their approach was to talk to a number of different people. They spread their net pretty wide to begin with.

Consumer drivers seemed to be home entertaining, life stresses, and wine education that is increasing. On the retail side, Wal-Mart introduced its own wine label in 2000 and the “2 buck chuck” from Trader Joe’s.

Industry drivers seemed to be the internationalization of wine. There’s Australia desire to dominate the US with Shiraz.

Other drivers included a recent supreme court rule being over turned and the movie Sideways.

This research gave them more confidence that this was an actual trend going on.

How could this leaning be turned into a business opportunity? It’s really about understanding the drivers of the trend and how the company’s capabilities can be leveraged.

They took a stab at segmentation. There’s the box-wine drinkers, the chardonnay drinkers, the label-buyers, the entertainer enthusiast, the wine lover, and the trophy collector.

They began to look then at products that existed out there. A lot of them looked very gadgety. There’s an electronic wine guide, telling them that consumers did want to learn more about wine. Consumers also wanted to learn more about the proper temperature for serving wine. They looked at problems with existing products. Consumers were are also looking to enhance the flavor of wine. Protecting opened bottles of wine was important too. But these preservation tools didn’t seem very sophisticated.

They then turned to the commercial environment. There were some devices that could perform more sophisticated functions, things that consumers wanted such as chilling, temperature monitoring, and preservation.

So how to address the needs of consumers in the home? Could the commercial equipment be housed in such a way as to be useful and non-gadgety for the home? So they invented a device for home use.

But that wasn’t considered a business, just a product, so they looked beyond wine. They learned that people were drinking for different reasons: stress relief, contentment, celebration, etc. Did the wine insights translate into other businesses? The real growth was in the high-end spirits (e.g. Kettle One).

They went out to confirm the consumer need through immersion. I bet that was fun.

They wrote a “business opportunity” consisting of a short business plan.

This process took 1.5 years ago and the product should be in the market next year.

3:50 Ethnography in Action (Pitney Bowes)
Pitney Bowes spent time watching people opening the mail. He noticed that managers would get interrupted all the time. Carry away: there are things to be learned by looking carefully.

Overview of talk:
- The innovation pipeline
- Ethnography
- Role of the ethnographer

They’re looking for business opportunities that:

1 – Fulfills customer needs
2 – Technically possible
3 – Financially worthwhile
4 – Fits the strategy and capabilities of Pitney Bowes

His group takes the lead on 1 and 2. The lines of business take the lead on 3 and 4. But there’s partnership at every step.

The Innovation Pipeline:
Business Unit frames a strategic question. For example a change occurs in the fed regulations or an unmet need is identified and the customer. They put 2 people on the project and it’s ready to test. Their Concept Studios of generate an idea. They then produce customer prototypes. A lot of ideas get put on the shelf along the way.

For example, there’s a problem with undeliverable mail. They’ve come up with a concepts to address this problem.

Customer-centered innovation – how we work:

1. Ethnography to understand needs.
2. Ideation centered on customer needs.
3. Prototype as the language of innovation
4. Iterates like mad
5.

Ethnography: Making the strange familiar and the familiar strange.

Systematic Data collection:

Mix Techniques
* Interviewing
* Observation
* Collecting artifacts
* Use a framework (POSTA)* Person (ethnographer)
* Object
* Setting
* Time
* Activity

Sampling
* Define elements (roles, knowledge)
* Sample across the system

Data => Patterns => Insights => Ideation

More effective than sending an ethnographer out to the customer is to send the whole team out to do the ethnography. The ethnographer’s role is to help keep the team observing.

FutureTrends Conference - 11-06-06

2006-11-07T04:26:00.000-08:00

FutureTrends Conference - 11-06-06
I’m attending the annual FutureTrends conference in South Beach, FL. A crucial component of sustainable innovation is the understanding of trends. At the core, innovation is about marrying “what’s needed” in the market with “what’s possible” to do with emerging technology. Add the dimension of time, and you can see why it’s important to understand not only what’s currently needed and what’s currently possible but also what’s going to be needed and going to be possible. As innovators, we need to be able to understand emerging market needs and technological capabilities.

Thankfully consumers are telling us what they want online and some of the worlds most innovative companies, such as Procter & Gamble, are willing to share their perspectives on where things are going in technology and markets.

Here are some interesting take aways from the conference that I can share with you.

8:30 AM Procter & Gamble
Procter & Gamble sees the following global trends coming down the pike:

Trends:
1. Looking better, feeling better
2. Increased power of age-specific consumer groups
3. One world-one economy (thinking globally, tweaking locally)
4. Environment & safety
5. Mergers & Acquisitions

9:15 AM Starbucks
The VP of Global Creative, Stanley Hainsworth, Starbucks, shared a useful practice he used to understand the Starbucks brand when he was hired away from Legos. He went into the warehouse and pulled out all the old Starbucks marcom. He laid it out on a table and got the employees of Starbucks to give a thumbs up and thumbs down on the materials that did and did not accurately express the brand. He then worked with everyone to cluster the good materials in order to identify the 5 most critical elements of the Starbucks brand:

1. Handcrafted
2. Artistic
3. Sophisticated
4. Human
5. Enduring

He’s very true to these elements, frequently referring back to them in his entertaining talk.

10:30 Reebok
There is a new culture of “we” to replace the individualistic culture of yesteryear. Even Bill Gates has turned from capitalist to philanthrocapitalist.

Trends:
1. New Caring Consumers: Affluent Activists – People flaunt their ethics, not their wealth. They champion sustainability, human and animal rights, corporate transparency, etc..

2. Do-it-Yourself: On-line creativity coming from young people. Check out http://www.VideoJug.com for videos to help you acquire new skills.

3. Social Networking: Staying in is the new going-out.

Corporations, more and more, are tracking what consumers are saying about them online in blogs. This is becoming a big business. It’s difficult to stay on top of it all and to figure out what to do about it. But it’s essential and it has to be identified and responded to very fast.

Consumer priorities these days: social, ethical, environmental. Europeans will spend 5% more for products that espouse social responsibility in some way.

See http://postsecret.blogspot.com where people express their deepest, darkest secrets.

“The major problems for corporations today is that despite living in Web 2.0, they are decisively still operating in Business 1.0”. She outlined the characteristics of Business 1.0 companies and 2.0.

11:15 Ford “What makes something a trend?”

Fad or Trend game?

Pet Rock (Fad) – Inventor tried to re-package it the second year for Valentine’s day and it flopped. He had originally invented it because he didn’t feel he could ever be a responsible pet owner. The first year it sold really well but the following (on the re-launch) it flopped.

Tattoos (Trend) – She thinks it’s a trend, not a fad.

Cell Phone (Trend) – The idea of mobile communication has been a developing.

iPod (Fad) – She thinks it’s a fad. Ford thinks that there will come a point where people will demand an integrated device that combines all the functions of portable digital devices. Others think the concept of the iPod is a trend though.

But a Fad or Trend is in the eye of the beholder (or the consumer, for that matter).

“If I had asked consumers what they wanted, they would have said faster horses.” (Henry Ford).

My personal perspective: If you’ve invented a car, and you know it’s better than a horse, then understand what problems people have with the horse, and convince them your invention solves those problems. Then be patient.

How does Ford monitor trends? They have an informal network of people. They monitor ~200 trends in a database. They talk to a lot of experts from think-tanks. They conduct ethnographies. They hire consultants. They talk to people from other industries for inspiration and to understand how products are changing. We try to understand the unmet needs of consumers.

They rank the 200 trends and look at these criteria:

Time frame
Regional/global
Industry impact?
Market impact?

They create a map of trends to understand the unmet need. For example aging populations and emerging technology are two trends. They showed commercials targeting older people to their engineers at Ford.

Key drivers of the Aging Population trend:

1. Medical advances
2. Active lifestyles
3. Delayed marriage
4. Delayed parenthood
5. Declining fertility

Some emerging technologies

1. Tremor-compensation for a computer mouse.
2. Urinalysis toilet-monitors your health without you having to go get tested all the time.

Ford has a tool called the Third Age Suit. Engineers put this on and it gives them the sensation of being older: blurred vision, overweight, difficult to move joints, etc. They use that to understand the consumers’ needs better.

Key drivers of the safety & security trend:

1. Rising crime
2. Sense of vulnerability
3. Media – A story on CNN about a small incident like a kidnapping magnifies the sentiment.
4. Mistrust in business and government
5. Technological advances – cool gadgets such as the Exmocare that monitors your moods electronically.

At Ford, they’ve shifted from inside-out thinking (how can we leverage our strengths) to outside-in thinking. What are the things that we have no control over? How could these things change our customers? How should these shifts in customers impact Ford? She had to stop there because that would get into proprietary information.

Email sconnell at ford dot com if you want to buy a Ford because she can get you an employee discount. Not sure if she meant people not at the conference or not but she seemed very generous in her offer. She gave everyone at the conference a Ford Fusion…it was just a toy care though but got a laugh.

How many people are in Connelly’s group? Well, it’s been downsized along with the rest of Ford. She has about 3 people plus an informal network of part-timers.

How is your function evaluated? When you go from a push operation to a pull operation. So, internal customers are coming to her for the futuring work she does.

Lunch
Met another Chief Innovation Officer over lunch from AIG. The introduction of the Chief Innovation Officer—now that’s a trend.

1:15 John Maeda, MIT “10 Laws of Simplicity”
John noticed that simplicity is a trend. Is it good? Is it bad?

A simple sky is nice, but it’s also nice when it’s complex, like when there’s an intricate pattern of clothes.

John said he’s at MIT but he doesn’t like it. He likes to make fun of it.

siMplIciTy : coMplexITy

1. Reduce – shrink (iPod=>Nano), hide (clam shell phone hides keys), or embody (Motorlla’s phone is called the Pebble to evoke a meaningful connotation).
2. Organize
3. Time – iPod shuffle removes choice, saving you time = simplicity.
4. Learn – Knowledge makes everything simpler.
5. Differences
6. Context
7. Emotion – More emotions are better than less.
8. Trust – In simplicity we trust.
9. Failure
10. The one

3:00 IBM “Global Trending Process”
IBM is trying to grow beyond its core.

There’s been an invention period in IT ’96 – ’01, a crash, and then a deployment period (as for ’04). Source: Perez, C. “Technological Revolutions and Financial Capital”, 2002

Core Business: Hardware, Software, IT services

We can innovate by going: to new offerings for existing markets, to new markets with existing offerings.

IBM is re-thinking what its business is. The largest part, and the fastest growing, is point services, or “solutions”. How can we bundle hardware, software, and services to create solutions?

They looked at external (emerging technologies/offerings, industry trends & VC/PE, gov’t, emerging geographies, societal adaptation) and internal resources. They ran all those insights through their triage process that they learned from Ford. That involved Business Opportunity Workshops, Collaborative Long-Term Planning. The outcome was new products and services. Their process is run by a cross functional group with representatives from Bus, corporate functions and different geographies.

One challenge was to get the business units to pop up and think about the future, rather than just worry about making numbers for the quarter.

Trends IBM has uncovered:
1. Shifting global demographics:
Aging populations – the median age 26 now, will be 36 by 2050
Urbanization – people moving to urban areas, new urban locales are popping up. They have similar challenges: resources, infrastructure, health, environment, housing, governance, quality of life, transportation, economy, security. In emerging regions, the issues are growing pains. In developing regions, though, the issue is sustainability.
Educating new citizens
Skills shortages
Changing migration patterns
Disaster prepardness
Exptended retirement ages
Global workers’ rights
Wireless cities
HealthCare

2. Accelerating globalization
Emerging global markets (e.g. China) are increasing production and export of goods and services. They’re also increasing Foreign Direct Investment (FDI).
Developing regions contributing more to global labor force.
Protectionism and nationalism
Citites growing in global influence
Cultural assimulation

They do more than 2 megatrends for their internal clients. They show them this content and then they look at the intersections and how these trends impact the client.

Process for turning global trends into new growth opportunities:

Sharing Insight => Driving Innovation => Developing Opportunities

1. Sharing Insights
HorizonWatch
innovationJam – Their website for acquiring ideas from internal and external people. It was run by their Communications department. They’ve narrowed it down to 10 different initiatives. It’s now been handed to the group that presented to size it, scope out the solution, tec.

2. Driving Innovation
Strategies
Focus this year: Energy & Utilities (she couldn’t reveal more)

3. Developing Opportunities (here are some examples)
medical imaging
road user charging - different fares at different times of the day for toll roads

IBM focuses on Innovation that Matters to make the world a better place

3:45 “Using Blogs to Market to Women”
Shefinds.com has 10K visitors per day, the speaker, Michelle Madhok (michelle at shefinds d0t com), was the founder. She has 40 bloggers writing for her.

62% of Internet users do not know what a blog is (Pew Internet & American Life Project).

Question: What is a blog?
Answer: A blog is a special kind of website where an individual can publish their thoughts. I write an innovation blog, for instance, because it is a topic I spend a lot of time thinking about. If you have something you want to talk to the world about and don’t want to have to go through the hassle of getting published, you can create a blog too at www.blogger.com.

“Women come late to technology because we want to see if it’s worth our attention.” Most top blogsites are written by men still.

Blogging, for those women who write them, is about being heard. They can finish their thoughts there.

77% percent of bloggers say they blog to express themselves creatively rather than get noticed or paid.

A big topic area for women to blog is about parenting issues. A big one is Heather Armstrong. Moms listen to other moms. Moms are 98% more likely to spread the word about something new/useful than other groups.

Dove did an ad on the Super Bowl and got 500 million impressions for a lot of money. They put it on youtube for $0 and got 1.7 million views. It’s a really good ad actually.

Flogvertising – Fake bloggers funded by corporates.

PR Posers – Companies hiring PR firms to go respond to blog postings about the company.

Other women-oriented blog networks: blogads.com, adbrite, glam, blogherds

RSS – Really Simple Syndication. It allow you to skim through blogs you’re interested in.

Splogging – Fake blogs full of garbage.

Great presentation Michelle!

Thoughts on the Day
The FutureTrends conference has gotten off to a great start. Not every conference I go to is high quality, but I was very happy about the value I got out of today. I can tell the organizers kept the bar very high. Great location too, it’s my first time in South Beach.

Open Innovation Blueprint: Commandment 10

2006-10-24T15:41:00.000-07:00

This concludes my on-going blog on mapping out a blueprint for implementing Open Innovation. The first entry in this series talked about the framework I am using to analyze this question, the Ten Commandments of Change Management. Open Innovation is a big change, and therefore requires a change management program. In today's blog, I'll cover the tenth element of the framework:

10. Reinforce and institutionalize the change
Sound bites uttered by managers and executives in speeches, meetings, and even at the water cooler help reinforce and institutionalize Open Innovation. Here is a list of phrases, sayings, and insightful come-backs you should arm your R&D managers with:

Invention White Space – Reiterate that Open Innovation is not about outsourcing R&D. It’s about making innovation more efficient by avoiding the reinvention of the wheel. Open Innovation is about finding the areas where nobody has invented yet so talk to people about “Invention White Space”. After an in-depth Technology Scouting exercise, if nothing suitable is found, say to R&D “that’s where we should invent because it’s whitespace”, knowing with confidence you’re inventing something that is a) needed and b) nowhere else to be found.
“Not Invented Here was invented here” – When Open Innovation comes to town, people start talking about the “Not Invented Here” syndrome that is believed to inhibit Open Innovation. Normal human inertia does cause this to some degree. To counter-balance it, make jokes like they make at P&G, like “Not Invented Here was invented here”.
“Proudly Invented Elsewhere” – Similar to above, this phrase originally came from P&G, but no reason other companies can’t use the same catch phrase.
“Half of our new products will come from us, half will come through us” – For those R&D people who feel their job is threatened by Open Innovation, a statement like this reminds them that most inventions found outside will not be “ready to go”. Often they’ll need to be integrated, packaged, combined with other internal or external inventions, or they will have production scale-up challenges that R&D needs to apply creativity to.
“Use it or Lose It” – A great old expression you can apply in a new way to sustain Open Innovation at your company. Remind people that the reality today is other companies are making their IP available—they have a strong incentive to. So if we don’t use it, one of our competitors will. The imperative is to find it faster.
“Stand on the shoulders of giants” – Many brilliant people have downplayed their genius by reminding us that they’ve only been able to achieve by standing on the shoulders of giants. Great inventors in your organization probably believe this too. What you want to do for them is make your Technology Scouting process so efficient at finding great inventions that they can come to rely on you to find the shoulders for them to stand on, the building blocks they need to achieve their own greatness.
“Find our value add” – This concept, like many of the others, is another way of talking the need for people to identify the invention white space. Say to your employees that our value add is in understanding how to tailor the technology (whether an internal invention or external one) to the customer’s problem. Emphasize how much importance managers in your company will begin to place on rewarding the R&D people who demonstrate initiative in understanding the customer’s and market’s need.
Edisonian Approach – Even Edison who lived long before a time of Open Innovation knew the importance of building upon others’ work. He said, "When I want to discover something, I begin by reading up everything that has been done along that line in the past - that's what all these books in the library are for. I see what has been accomplished at great labor and expense in the past. I gather data of many thousands of experiments as a starting point, and then I make thousands more." (Wikipedia.org)

White paper on "Implementing Open Innovation" now available
This blog series has been adapted into a white paper called "Implementing Open Innovation" that I would be happy to share with you and your company if you are looking to implement Open Innovation.

Sources
The analysis above draws on information from Suzanne Harrison’s new book, Einstein in the Boardroom, Henry Chesbrough’s book Open Innovation, the Harvard Business Review article on Procter & Gamble’s Connect and Develop program, Breakthrough by Stefik & Stefik, and my own interviews and experience. I would also like to thank Mike Docherty for inspiring use of a "series" for blogging. Thanks Mike.

PDMA 2006 – Day 2 Lunchtime Keynote, Ping Fu

2006-10-24T15:40:00.000-07:00

Ping Fu opened with a promise: A lunchtime keynote speaker is supposed to add some spice to your meal.

I, for one, thought she really delivered on that promise.

Ping’s story was truly inspiring. She endured the hardships of the Chinese Cultural Revolution including having her parents taken away from her and having to raise her 4-year-old sister. She was exiled from China for political reasons and sent to the US where, although she only started out knowing 3 words and carrying $85, she managed to earn a second degree in computer science and land a job at the NCSA. There she worked with super computers and gave Marc Andreesen encouragement to work on the web browser that led to the founding of Netscape. Later in life she founded a really interesting company called Geomagic that can take a 3-D image of an object and enable you to re-create that same object. Think of a 3-dimensional equivalent to the photocopier. Although it can’t be used to fax a pizza, Geomagic has some very compelling value propositions involving things like engine turbine rotor blade replacement where an exact replica is needed to keep costs down in the financially challenged airline industry.

I was inspired by her stories of needing to learn that she had to take responsibility, even when she didn’t have the experience to know what to do. Like when she raised VC money but didn’t know how to spend it and found out that the executives she had hired who should have known how to spend it ended up wasting it. She was able to recognize that she had the power and ability inside to take that responsibility even though she didn’t have the experience. Perhaps this draws from some of her experience as an 8 year old having to grow up quickly and take responsibility for her younger sister.

This will be my last post on PDMA 2006. I hope my efforts and memorializing the sessions I attended have been helpful to some of you. If you would like to debate anything, I welcome you to post your comments online. You know I don’t usually put much thought into stuff I put on blogs. It’s supposed to be that way to encourage naïve thinking that can lead us to new ideas. I know a lot of people who read blogs are intimidated to say something, but if you feel that way just know that it is supposed to be a free-form, casual setting and you can let your guard down a little (or a lot).

I’d appreciate any introductions to great Product Marketing professionals who’d be interested in working for an exciting startup in Silicon Valley.

PDMA 2006 - Track 4 - Roadmapping at Nokia for product ideation and development

2006-10-24T14:45:00.000-07:00

Speaker: Scott Smith, Futurist, Social Technologies

What could be the progression of technology usage from today till 2012? How will consumers use the devices in 2012? What might be the most important use-stories? How should Nokia respond to the user needs?

Understanding and Mapping Implications - What are major emerging needs? What are the emerging capabilities? How do the crossing of these create opportunities or “sweet spots”?

This was a fastening session with visuals I can’t reproduce here. Scott has a very cool way of representing the output of Roadmapping. I’d contact him if you’re interested:

Scott Smith
+1 202 223 2801 ext 215
scott.smith socialtechnologies.com

PDMA 2006 - Track 4 - Operational Excellence in the Midst of Uncertainty

2006-10-24T09:45:00.000-07:00

Speaker: Jens Hamester (DaimlerChrysler AG)

Jens outlined their NPD process at DaimlerChrysler. It consists of a familiar-looking set of phases reticent of a stage-gate model. Here were some unique ideas he focused on:

What does Simplification mean? It does not mean disregard for all complicated parts nor does it suggest being overhasty, naïve, primitive, ordinary, or superficial. It does mean focusing on crucial points and essential interrelations.

What does Radical mean? Well again, it does not mean things like moving to extremes (extremism). It doesn’t mean getting ruthless, manic, or rowdy. What it does mean is attacking the roots of the challenge while retaining control of decision chronology.

There were a few guiding principles they used to guide their process. For these, I’m just pasting in the content of the slides because they were pretty good:

Rule 1: Use Simple Real World Metrics to Address Uncertainty in the Hazy Pre Product Development Stage

-Do not attack with even more complex evaluation methods
-Accurate methods can not (always) cover complex environments
-Use project ranking by distinguishing pure customer benefit
-Demand courage and entrepreneurship to promote innovations

Rule 2: Center AE Activities Around Today’s and Tomorrow’s Customer Buy Criteria.

-Strategic direction from brand positioning is used to define AE project portfolio
-Define not 20, but merely 4 fields of criteria
-Choose stable customer buy criteria for continuity
-Achieve critical mass within each main field

Rule 3: Place Small Strategic Bets by Tracking Future Trends on a Qualitative Basis.

-Initiate expert interviews with drivers, owners, scientists
-Identify driving forces for market developments
-Transform market development into corporate risks and opportunities with respect to possible disruptive elements

There was on more rule (4: Realization of Innovations Needs Discipline.) but I didn’t find it as useful to include.

PDMA 2006 - Track 4 - Disruptive Innovation Tools to Predict and Drive Growth

2006-10-24T09:21:00.000-07:00

Speaker: Michael Clem (J&J), Ruben Gavieres (Deloitte)

J&J hired Clayton Christensen for advice because they wanted to conduct more of their own innovation, it was becoming to expensive to grow through acquisition. They decided to set up a special division and to hire Deloitte because Michael Raynor was the co-author of the Innovator’s Solution.

Ruben reviewed the core idea behind the innovator’s dilemma. See Wikipedia for a written explanation.

Michael had a great slide that illustrates the difference between sustaining innovation and disruptive innovation.

Sustaining innovation is like fortification (picture a castle under construction)
Disruptive innovation is like exploration (picture a 15th century ship out on the ocean)

Michael gave a laundry list of techniques that recur in successful innovations in the medical field. It’s a good list that reminds me of TRIZ although tailored to medicine.

They found Jobs-Outcomes-Constraints (JOC) very helpful in framing the needs.

They’ve adapted a spiral development model from the software industry. Basically it entails an iterative model with recurring go/no-go decisions. Each pass around the spiral should reduce the risk by collecting more information about the market and the technical feasibility. They tried to keep it to 3 turns around the spiral.

By the way, I’ve not tried to reproduce the presenters’ slides which covered the material pretty well.

PDMA 2006 - Track 4 Making Innovation Repeatable in Large Orgs

2006-10-24T08:47:00.000-07:00

Speaker: Yoon Lee, Samsung Electronics

The focus of this presentation is about improving “product innovation” at large organizations (5,000+) through improving four major domains that support product innovation:

People
Process
Technology

The intersection of these three is your Product.

Some causes of product failures:

Apple misread customer maturity curve-Apple II set user expectation on the PC price

Sony PDA failed because it misunderstood the need – simplicity over functionality.

Ford failed to make the process robust to support sales.

Why do new products fail? According to AMR, 46% of the time, products fail in market because the company didn’t meet customer needs.

Yoon recommended the “Rainmaker Index” (1998 PDMA conference) that shows analysts in the top third of the “Rainmaker Index” generated 95 times more profit than those in the bottom third. For more information, see winovations. That said, you need someone who can put it through a repeatable process.

The presentation largely followed the slides, so I’ve just focused on highlighting what I thought were important points or content that wasn’t captured in the slides.

PDMA 2006 - OCI Awards (part 2 – Xerox Corporation)

2006-10-24T07:48:00.000-07:00

Innovators at Xerox produce about 2 patents per day on average.

One early key innovation was with their business model. Rather than selling the customer a copier, they leased them the copier and they were charged per copy. Xerox would handle the maintenance.

In 2000, Xerox had a “Perfect Storm” including decreasing revs, new competitors, delayed product, stock price drop of 15%, debt rating fell. So they focused on stopping the bleeding. But “I have to survive the present, but I must invest for the future or else I’ll fail” is what the CEO declared.

Today’s story is about that time period.

Here’s how they created a culture of innovation:

Intense customer focus
Create and leverage the world’s best new technologies
Use a disciplined process
Embrace and manage risk

Everyone knows about VoC, conjoint, and the rest of the tools of customer-focused marketing. However, they also have the Gil Hatch Center for Customer Innovation and Ethnographic Research.

The Gil Hatch center invites customers (sometimes alone, sometimes together) to interact and work with Xerox’s engineers and scientists. Customers receive access to Xerox’s technology. They work together to develop concepts.

Ethnographic research flips it around and Xerox goes out and visits the customers in their native environment.

These tools augment VoC and actually make customers a part of the innovation process.

Create and Leverage the world’s best new technologies.

Global presence
Crown Jewel Process – “Partner or perish”
Managing the innovation web

We don’t think in terms of “make or buy” but instead “how can what’s available out there complement what I’m doing”.

Using a disciplined process...

Rigorous (data driven, metric based) (Lean Six Sigma, Design for Lean Six Sigma)
Make it easy to use
Leverage Information Technology

Originally their process was documented across 11 binders. That was too cumbersome, so they simplified it enabled people. They also employed information technology to make it easier.

Design for Lean Six Sigma (DLSS) is about never letting waste into the original design. At first they had to grapple with how to combine Phase Gate and DLSS, but they ultimately determined it was:

Phase Gate – “the what”
DLSS – a set of tools for developers to use to keep it simple

Failure is defined as letting a project go on too long w/o doing the due-diligence to test assumptions. Failure is also defined as missing an opportunity. It’s not failure if an idea falls out of the rigorous process, that’s success.

PDMA 2006 - OCI Awards (part 1 – Bank of America)

2006-10-24T07:35:00.000-07:00

The Outstanding Corporate Innovator award is presented each year, to date 33 awards.

Criteria:

1. Significant commitment to innovation
2. Have proven themselves capable of delivering innovation sustainably
3. Their process and culture provide a good learning experience for the rest of us

Bank of America
Xerox Corporation

Each one of these companies have made a strong commitment to innovation as a strong driver of growth. They make strong use of Voice-of-the-Customer (VoC) to determine what they need to do. They both have excelled at creating a highly innovative culture. We’re going to learn from them through their best-practices presentations.

Bank of America – Ray Chin
Innovation story / capability at BofA have three characteristics

1. It’s been a journey, it didn’t start over night
2. Innovation is a part of our DNA
3. Integration is our competitive advantage (although it’s not easy)

We were one of the first non-manufacturing companies to apply Six Sigma. We used it to develop the process itself

Gen 1: Build the process (2002 – 2003)
Gen 2: Execute and triage the process (2003 – 2005)
Gen 3: Integrate and refine (2004 – 2006)

At every step we improved the process (that’s the Six Sigma aspect).

The process in more detail…

They’ve integrated the strategic planning with NPD process itself.

Vertical & Horizontal Strategic planning
Idea Generation (including triage)
Stage-Gate with these phases: DMAIC
Product Lifecycle Management
Back to Vertical & Horizontal Strategic planning

DMAIC – Define, Measure, Analyze, Improve, Control

Vertical & Horizontal Strategic planning consists of a cascading Hoshin Plan. Hoshin Plan definition: “The basic premise behind the hoshin plan is that the best way to obtain the desired result is to ensure that all employees in the organization understand the long-range direction and that they are working according to a linked plan to make the vision a reality. The second aspect of the plan is that there are fundamental process measures which must be monitored to assure the continuous improvement of the organization's key business processes. In essence, all are heading in the same direction with a sense of control.” (source)

Example: Keep the Change program

Strategic plan – Boomer women with kids had unmet needs and they seemed to have growth potential for BofA.
Idea Generation – They conducted VoC with the target
Define – Stated it simply
Measure – Evaluate and validate
Analyze – The final design
Improve – Build and prepare for the launch (coding, training, marketing)
Control – Launch and monitor

VoC helps drive the innovation process:

Concept Screening (ethnography, mind mapping, brainstorming, etc.)
Concept Optimization (qual. and quant.)
Business Case & Build - Concept Testing
Launch - Market Test (VoC, BoC (Behavior of Customers))
Monitor & Improve

They use Accolade to manage the process.

Their ethnography indicated that Boomer women would ‘trick’ themselves into saving money, so Keep the Change would allow them to round-up their purchases and the change would go into a savings account. BofA would match the amount.

Key Performance Metrics

Units
1. Number of ideas generated
2. WIP, Yield, Kill Rate
3. Strategic Mix (incremental, strategic, breakthrough)

Time
1. Average Completion Time
2. Average time to launch
3. Average aging

Quality
1. Tollgate achievement rate
2. Rolled Throughput Yield (RTY)

Benefits
1. % of total rev. from new produscs
2. % of benefits achieved
3. number of patents

In recent years they’ve focused on improving their Kill Rate.

They’ve driving double digit growth from their new products. BofA is the fifth most profitable company in the world.

Here’s their framework on sustaining innovation.

Leadership commitment and growth aspirations
Idea generation and management
Content development and prototyping
Portfolio management and measurement
Talent management
Governance
Funding
Innovation culture

“Flawless execution” is the mantra of their management team. That would seem to fly in the face of creativity. They’re expected to take risks, calculated risks. Each stage of the process is meant to reduce the risk. It’s the discipline of their process that enables them to achieve close to flawless execution while also being creative.

Strategically driven innovation
VOC throughout the process
Integraiton (of the products, the stakeholders, etc.) made the difference

In its first year, over 3.2 million accounts were created. Customers have saved of ver $230 million in their accounts (not including the amount BofA will match on their anniversary).

PDMA 2006 - Darrel Rhea Keynote

2006-10-24T06:27:00.000-07:00

Darrel Rhea is from Cheskin Research, a leading market research / innovation consultancy.

Main message: making meaning with relentless attention to people you serve.

What’s the role of a keynote speaker?

1. Create a useful framework for the rest of the conference
2. Provoke controversy
3. Remind us of the value and importance of what we do

Darrel showed the Tide package cut up in 16 pieces and jumbled up on the screen. It was still recognizable. Cheskin claims credit for this.

Theme of the conference: competing to win. Cheskin has had a profound impact over 60 years. They worked on x-box, and Windows Mobile, 5 generations of MS Office, etc.

Cheskin’s privilege has been in their access to people. They’ve interviewed millions of people. What have they learned?

He wrote another book called “China’s new culture of cool”. The Chinese youth today is a huge segment and they’re nothing like their parents.

Another book that Darrel has written: “Making Meaning”

As marketers, designers, researchers, inventors, what we do is serve human beings.

To truly serve people requires compassion & empathy.

When we do our best work, we create value, enrich lives, and evoke meaning.

PDMA 2006 - Scott Cook Keynote

2006-10-24T06:11:00.000-07:00

Scott Cook is the founder of Intuit.

The company was founded when Scott noticed his wife having trouble balancing her checkbook.

Intuit has 16M customers for Quicken and 72% market share.

Dick Drew, 3M employee, was working on sand paper. He went to see how autobody repair shops were using sand paper. The shop employees were complaining because tape would pull paint off the cars. He started working on a tape that would lay down cleanly but come off easily, leaving no residue.

McKnight, the CEO came in to talk to Dick and wasn’t happy he was working on his new invention. McKnight told him to stop and work on sandpaper instead because they knew how to sell sandpaper. Dick followed orders for about a day. McKnight came back a few months later and saw Dick still working on tape. He didn’t say anything. Thanks to him not saying anything, Dick was able to invent masking tape and cellophane tape.

“The bottleneck is always at the top of the bottle.”

-Peter Drucker

This was a shot taken at senior management (which is at the top).

5 Principles for Innovation

Celebrate the entrepreneur
Aim high ... to change lives
Innovation comes from mindset change
Savor surprises
Put your customer metrics above your money metrics

Then Scott told the story of the invention of containerized freight. The time in port dropped by 36 fold 50 years ago. Don’t focus on the boat in the water, focus on the boat in port was the mindset change. Others had worked on making faster ships. This story illustrates principles 1, 2, and 3.

QuickBooks story...

They were launching a product that had 1/2 the features at twice the price and had no recognized brand. It had bugs in it, bad bugs. The advertising was really bad too. Their internal goal was to catch up to the market leader in 2 years. In 1 month QuickBooks became the market leader!

The story started 2 years earlier. They surveyed Quicken users and found out that 1/2 of the users were using it in an office setting. It bugged Scott, because it was for home use. So he went and found out what was going on. Turns out the reason was that small business users hated accounting. So they built accounting software that worked the way that these business users actually worked. That was what made it such a success, despite all the blemishes.

The key to a mindset change is savoring surprises. When you hit something that you don’t understand, that’s an opportunity to learn something.

Success starts with humility. Sometimes our own beliefs are what are holding us back. All our minds are packed with furniture. The key to innovation is removing the furniture to make room for the new furniture.

“Empathy is not just about walking in another’s shoes…first you must remove your own shoes”

-Indian proverb

They identified five distinct taxpayer types. One of them was a “worry warts”. These people were willing to do the work of preparing taxes but they worried that they were doing something wrong. So they introduced a version of TurboTax with an integrated online chat that can help him access live assistance.

“Discovery consists of seeing what everyone else has seen and thinking what nobody else has thought.”

-Albert Gyorgyi, Nobel Laureate

Here’s another problem they’re working on. Some businesses, such as a bike shop, want to be found by web users but they want the users to come to the store. The problem has been getting their inventory on the web. So Intuit has integrated QuickBooks with Google to upload the inventory information in QuickBooks with AdWords and Foogle.

Soon Froogle will be integrated with Google.

The last point is to put customer metrics ahead of financial metrics. Careers are made or lost on profit numbers. But what metrics exist for customers? Profit is easy to measure, customer metrics are not. So what’s a good metric?

“The only way to grow a business is to get customers to come back fro more and tell their friends”

-Enterprise Rent-A-Car

So Intuit measures (on a scale from 0 to 10) whether their customer would recommend Intuit products to their friends. They categorize the response as:

0-6 detractor
7-8 passive
9-10 promoter

This is the final metric that Intuit tracks:

net promoter score = % promoter - % detractor

Now Intuit is working on health care. They’re developing a medical bill application for consumers with big medical expenses. It was invented by an Intuit employee whose son was born with a dire medical problem. The employee designed some software to help manage the medical bills. He then worked with Intuit to look for others with the same problem. That’s how a new product was born.

PDMA 2006 CEO Roundtable

2006-10-22T14:08:00.000-07:00

CEO Panelists

Clemens Caicedo, Senior Director, Strat. Alliances, Latin America Human Helath, Merck & Co. Inc.
M.P. Chugh, Chief Executive, Tata Autocomp Systems Ltd.
Prof. Deng Mingran, Dean, School of Management, Wuhan Univ. of Tech, China
William B. White, President, DuPont Canada
Moderator: Deborah Wince-Smith, President, Council on Competitiveness

Council on Competitiveness representative spoke first. Purpose of the CoC is to understand competitiveness and what do we need to do to maintain the US’s competitiveness.

Competitiveness depends on innovation because we need to be able to sell high-value products around the world.

Innovation is I to the fifth power: imagination, insight, ingenuity, invention and impact and it all about the transformation of economic value.

We’re beyond the Knowledge Economy and into the Conceptual Economy.

M.P. Chugh spoke on India’s Approach to NPD and Innovation

India started with overhauling its patenting system and privatizing.

It’s not really Indian companies that are innovating; it’s the multi-nationals that happen to have offices there that are innovating. Most Indian companies innovating are just adapting products for the local market.

He believes that only people can make innovation, not policies.

We need more funding, but really what we need is more people willing to take risks.

Prof. Deng Mingran spoke on integrative innovation of product-industry-region

They plan to study the Silicon Valley to see what they can learn to improve innovation in China.

Clemens Caicedo

Latin American countries need to develop the basic institutional factors to attract capital to develop platforms for innovation.

They want to emulate Research Triangle from Virginia (?) where the economy used to be just like that of Latin America today, namely based on natural resources and commoditized.

Legislation in Brazil prevented professors from working with the private sector. That had to be reversed to foster innovation.

William B. White

We recognize now that we can’t do technology push, that we need to understand the market first, obtain insights from the market, and do market-driven innovation.

He thinks in 10 years, a roundtable like this will not be organized by geography but by market. What markets will be receptive to the most innovation, not which countries.

Happy Birthday PDMA!

2006-10-22T11:50:00.000-07:00

This marks the 30th anniversary of the founding of the Product Development Management Association. The conference opened with “Happy birthday to you” for PDMA.

PDMA membership has reached 3100 and has int’l affiliates all over the world. The sun never sets on the product development management community nor on the PDMA!

Keynote Presenter: Capitalizing on Opportunities in Emerging Markets
Presenter: Sam Pitroda, Chairman, The Knowledge Commission of India

Sam was introduced as the father of the “Telecom Revolution”.

“To survive for 30 years is itself an accomplishment,” was his congratulatory opening remark.

He was asked to talk about capitalizing on opportunities in emerging markets.

Only 20% of people on earth live in the developed world.

As a lad in India he heard President Kennedy’s announcement to put man on the moon and embarked on a journey to come to the US just to be a part of the excitement. The journey he had was the journey of many from the developing world. It’s been a great learning.

Information Technology has brought about openness, decentralization, etc. and as a result social transformation. It has opens new horizons as to what’s possible, what’s feasible.

China and India are coming online as markets that must be paid attention to. The number of people born in India every year is enormous. It would be like adding another Australia to the world every year.

These emerging markets need basic infrastructure. Three technologies will be critical:

1. Information and Communication Technology (ICT)
2. Biotechnology
3. Alternate energy

Two examples of the kinds of revolutions we’ve seen in emerging markets that have been possible against all the odds (gov’t corruption, etc.).

The first example is from Bangladesh. This year’s Nobel Prize for Peace went to someone who did work on microcredit. He realized that women in Bangladesh had trouble getting loans. With $27, he distributed it to 42 women w/trust alone. This was 30 years ago. Today 100 M people in the world use microcredit. Unicef has distributed $6B in Bangaldesh alone.

Then there was mobile telephony made possible by microcredit. Phones were used by women as an instrument of earning. They would walk town-to-town with these phones to help make phone calls and the women could make a living out of it.

The second example is long-distance telephony. He had tried to make a call to his wife overseas and couldn’t connect. So he decided he would solve this problem. The key was a different model from increasing telephony density (the US model). He decided to focus on access. Don’t focus on giving everyone a phone; instead focus on public access located in very convenient locations.

He had breakfast with Jack Welch in India. Welch said, “I’m here to sell engines”. Sam said, “we’re not buying engines, I’m here to sell you software”. Jack said he wasn’t there to buy software. There was awkward silence for 90 seconds. Jack finally said he wanted to hear about software in India. And so it goes.

“Product design came to my rescue”. That was good comedic relief. His story was that he was down and out, walking down the street, when he noticed Radio Shack selling something he had patented. So he sued them, won, and got the money he needed to get back on his feet.

Concluding remark: 5,000,000 people in this world are waiting for your new products, your ideas, your innovations.

“I wouldn’t have spent $70B on the war in Iraq, I would have spent $70B on human development there.”

PDMA 2006 Research Forum - 10-22-06 Morning cont. (Track 1)

2006-10-22T10:15:00.000-07:00

Developing a Climate of Trust to Enhance Cross-functional Relationships within NPD teams (Rowland, Kyriazis)
This presentation was a conceptual framework because Rowland is at the beginning of her PhD program.

Question: How do you achieve the effective integration of multiple functions?

Rowland had some very compelling imagery to motivate the need for trust which I can’t describe in this forum ;-)

A lot of times, NPD teams are assembled quickly, before members have had time to develop interpersonal trust. What can trust come from then? Perhaps something called Swift Trust which relies on institutional cues rather than firsthand knowledge. (Jarvenpaa and Leidner, 1999)

Uncertainty: Is it a Threat or Opportunity for NPD teams? (Chen, Reilly, Lynn)
Research question: What view of uncertainty is right?

1. A major to rationality (Thompson 1967)
2. A source of entrepreneurial opportunity (Schumpeter 1934)

We think either view just looks at one side of the same coin, so we need to look at it both ways.

Exploring differences between inventors, champions, implementers and serial innovators in developing new products in large, mature firms (Simm, Griffin, Vojak, Price)

This is a continuation from her presentation last year, which was very good.

We’ve found that there are a lot of people with specific characteristics that matter for NPD. We know about stage gate models, and certainly process is important. But what about the characteristics of the people?

Different skills matter at each stage of product development. Creativity is needed at the FFE. Political skills are important for project approval. Facilitation is important for development. It’s unlikely that any one person can play all of these roles? However, there are a few people, serial innovators, who have the skills and capabilities to shepherd and innovation all the way from the beginning to the end.

3 studies and 1 pilot.

Today’s talk is about the pilot, however here are some points from the other studies.

Innovators are systems thinkers; they don’t think about just features and specifications. They believe technology is a means-to-an-end and is only there to make money for the corporation. They’re also idealistic and want to make the world a better place. A lot of them went through childhood tragedies and don’t want people to have to go through the same thing. They study both technology and business. What motivates them is being able to solve peoples’ problems and their motivation is intrinsic. They’re good at politics and process to operate successfully within the confines of a corporation. They have a very positive attitude about politics. They don’t have positions of responsibility; they get things done not by telling people what to do but by influencing them in creative ways.

They have a very interesting approach which involves jumping back and forth among the technology, the customer, and the market. They spend a long time specifying the problem. They then plan, develop, and publish post-invention.

In the pilot study, they talked to 2 inventors, 2 champions, 3 implementers, and 3 serial innovators. They then looked at personality differences.

Inventors – liked working with technical concepts and gravitated towards them.
Champions – were drawn towards customers problems and solving them; extroverts
Implementers – enjoyed working with well defined/tangible problems
Innovators – seem comfortable thinking broadly in terms of both customers/tech – systems thinkers. They’re introverts (on the MBTI scales).

Innovators tended to have strong perspectives on the role of business in technology but the other 3 roles didn’t have much.

Regarding preparation, inventors tended have Ph.D., but narrow. Champions had varied technical knowledge, etc.

Motivation: inventors driven by advancing state-of-the-art . Champions want to satisfy customers and make sales. implementers enjoy their work. Innovators want to help people.

Politics: inventors tend to use data as the basis of their arguments. Implementers are primarily administrators but don’t like politics. Champions are aggressive in selling product ideas to the customer and management. Innovators work the politics behind the scenes.

Process: inventors develop design requirements. Implementers get their ideas from others. Champions are usually not involved in the development and delegate the execution to others. Innovators can do the process steps, but because of time constraints, may often hand it off to others.

How should we organize better to accommodate the innovators? How do you find them, manage them, develop them, and enable them effectively? That’s what the researchers are looking at now. Hopefully next year she’ll be able to come back next year to share what’s she’s learned from the 20 innovators she’s studying.

She’s developing a scale to help a company identify the innovators in their company.

Some of them have titles like Research Fellows. Typically what they do is they find managers that understand how they need to work and they stick with them for a long time.

Do innovators get along with other innovators? Yes, they do. They know that big egos don’t fly in an organization, so they like to get to know people. They also have very unusual hobbies, for instance one guy has a hobby in sniping.

The Antecedents and Consequences of Procedural Justice in NPD Teams (Dayan)
Presenter didn’t show up, better luck next time.

PDMA 2006 Research Forum - 10-22-06 Morning (Track 2)

2006-10-22T07:07:00.000-07:00

Emphasizing customer advantage or competitor advantage (Rijsdijk, Langerak, Hultink)
Hypothesis: customer-oriented firms place a high priority on the creation of customer value. Whereas, competitor-centered firms have unstable strategies. A competitor-orientation results in products that are similar to existing products.

The study (maybe read the write-up if you’re interested) recommends when to emphasize benefit statements that are superiority-oriented vs. advantage-oriented. The difference? Both express a benefit, but a superiority-oriented benefit statement explains how the product is better than a competitor, rather than how the product solves the user’s core problem.

This survey looked at about 140 data points, and I was told by another researcher that it was a low response rate, but don’t take my word for it.

Information Search Strategies, Market Knowledge Dimensions, and NPD performance (Atuahene-Gima, Toilo, Luca)
These researchers wanted to determine how market knowledge search strategies impact NPD performance.

Market Knowledge = Customer Knowledge + Competitor Knowledge

Among knowledge acquisition process, information search is the “most consciously pursued by mangers on a day-to-day basis” (Huber 1991, p. 97)

Firms vary in the degree to which they search in the domain of their prior knowledge (local search) and/or in new domains (distal search)

Distal search and local search are not two ends of a continuum.

Functional learning occurs within communities of practice which specializes around specific problem solving activities.

They surveyed 750 high-tech firms in China.

Conclusions:

Local search is the stronger antecedent of both depth and breadth of market knowledge.

Distal search leads to market knowledge breadth but not to market knowledge depth.

Broad market knowledge needs to be complemented by broad technology knowledge.

PDMA 2006 Research Forum - 10-21-06 Keynote

2006-10-21T14:58:00.000-07:00

Perspectives on the future of innovation research (Raji Srinivisan)
NPD is a complex, risky, process involving multiple actors. Despite risks, the rewards are high.

Much of the research has focused on new product innovations. But that’s a necessary but not sufficient condition for organizational innovation. Raji Srinivisan proposes a borader view of organizational innovation. It’s time to look beyond products.

Organizational Innovation includes:

Integrated view of offerings to include services
Industrial design in innovation
Innovation failures
Marketing innovations
Innovating for international markets

Service Innovation
Some of the research in services is coming from Operations Research. Does the stage gate process apply to service innovation? How about the rest of the best practices we know from product innovation, can they be applied to service innovation?

Service firms don’t have R&D budgets. Where is the innovation happening if not in an R&D group? If service firms could answer these questions, would they be able to accelerate innovation the way we do with product innovation?

Industrial Design Innovation
For industrial design, what can you do to integrate marketing, design, and product development? What is design exactly? It’s adjusting the product and product delivery to maximize user experience.

Innovation Failures
It’s easy to look at successes because there’s more information available. It’s an important area of study because most new products fail. Yet, “failure is the only opportunity to begin again more intelligently” (Henry Ford). Can we create a body of knowledge to identify patterns?

Here’s something that occurs to me…if Fail Early Fail Fast (FEFF) is important to finding a success, then if we studied the failures, could we learn something about failing faster, cheaper?

Marketing Innovations
Parity in product performances creates a shift toward other changes in the marketing mix. For example, innovativeness in pricing, promotion, and distribution channels. Brand managers do this all the time. Can the body of innovation research help brand managers innovate on the marketing mix?

Innovating for International Markets
The developed market is saturated, single-digit growth rates. International is the opportunity for market growth and profitability.

Should product development firms operating in multiple countries decentralize their R&D efforts or go with a hybrid model?

PDMA 2006 Research Forum – 10-21-06 Afternoon Track 2

2006-10-21T14:53:00.000-07:00

Success measures for product development programs (Manion, Cherian)

Last year they presented on PD projects, but this one is on programs.

There have been two types of success measurements programs often use: growth-orientation vs. efficiency-orientation.

Similarly, there are three categories typically used to characterize PD efforts: Prospector (“first mover”), Analyzer (“early follower”), Defender (“efficiency expert”).

This study’s survey looked at the type of measurements chosen based on how the firm is characterized. They hypothesized the following mapping:

Prospector = Growth-Oriented Measurer
Analyzer = Efficiency-Oriented Measurer
Defender = Efficiency-Oriented Measurer

The data supported this for the most part, but it found the middle mapping was incorrect, suggesting that the mapping should be:

Prospector = Growth-Oriented Measurer
Analyzer = Growth-Oriented Measurer
Defender = Efficiency-Oriented Measurer

The study also recommends the following measurements based on the program type:

Prospectors: opportunities, new profits, new sales, growth
Analyzers: strategic fit, new profits
Defenders: success rate, 5-year objectives, efficiency

They surveyed 222 PD professionals.

The Comprehensive Strategic Positioning Framework (Blankson, Hirunyawipada)

The purpose of this study was to provide managerial guidelines for strategic positioning.

Positioning has been defined in two ways. One school of thought is that positioning is about how you describe your product so it resonates with consumers. Another school of thought is that positioning is about adjusting customer beliefs about the benefits and qualities of an offering so they desire it. This was one of the most interesting learnings today because it represents such as a clear difference in the meaning of a word that we as practitioners use all the time.

This study takes positioning to be both of these things.

Two frameworks were combined into the Comprehensive Strategic Positioning to frame the managerial guidelines Brand Concept Image Management (BCM), and General Positioning Framework (GPF). Here were the problems identified with the two frameworks that had to be addressed by the new one:

Positioning over time
Aim of positioning

Aim: effectiveness of the strategy should be based on convincing the buying community.

Positioning strategies:
Top of the range
Service
Value
Reliability
Attractiveness
Country of origin
Brand name

Managing Fail Early Fail Fast (FEFF) Decisions in NPD (Darroch, Schmid)

Because the drug development process is so long, the key is to fail early, before it gets too expensive. This is a generally accepted idea in big pharma (and other big firms doing NPD). But is FEFF a good strategy for small companies that can’t really afford to fail?

To achieve success with NPD, you have to look at a large number of opportunities because the chance that any one will pay off is low. The way to minimize costs, given this strategy, is to fail fast. Knowing sooner, though, requires a lot of information, quickly. That’s why innovation project teams need a steady stream of insights to determine viability quickly and cost-effectively.

A question I asked was: what are the keys challenges to putting FEFF into practice? They answered that nobody wants to stop their project. These side projects can continue longer in large companies than in small.

This was the most interesting presentation so far.

Pioneer vs. Follower: The time-to-market dilemma (Voigt, Brem, Scheiner)

If you have market insights, it’s more likely the product will be a success.

PDMA 2006 Research Forum – 10/21/06 Morning (cont.)

2006-10-21T09:04:00.000-07:00

Operationalization of the Garcia and Calantone innovation typology (Darroch, Miles, Jardine)
This session was best summarized by this quote from their write-up: “Our findings demonstrate that no matter what type of innovation a firm pursues, those within the firm need to have a clear and deep understanding of consumer needs (both explicit and latent) and the broader market conditions that may impact upon current and future consumers.”

Understanding Firm Innovativeness (Calabretta, Durisin)
Research question: How can we measure whether firms are innovative or not?

This is a particular question for Italy, where the researchers are from, because patenting activity is lower than all other European countries there and most companies have fewer than 20 employees.

Firm innovativeness was defined as the propensity of the firm to innovate and at the same time the capability of delivering successful products or services.

The results are only preliminary, but it suggests that having an innovative corporate personality is not very important compared to attention paid to strategy, planning, and making product-related decisions.

Going beyond technology: constituents of newness in ‘content-specific experiential products’ (Ece)
This researcher wanted to challenge what ‘new’ means for a product. iPods are the typical example NPD researchers care about. But what about the non-technological products like books (Harry Potter), movies (Da Vinci Code), songs. They are experiential. They are successful, proliferate, but researchers in NPD ignore them.

Experiential products – dominant emphasis on consumption experience, main benefit is pleasure and hedonic value.

Utilitatarian products – utility is the emphasis

What are the elements of newness or experiential products? She consulted with literature experts and identified a few components of newness of experiential products, but I couldn’t get their differences.

One thing she reports is that it’s better to play with the consumer’s expectations a little than go with something completely new. It makes a less risky purchase, which speaks to the success of familiar pleasures and subtle newness.

Why not ascribe an economic value to pleasure so that experiential products can be treated like utilitatarian products? After all, eventually, they do all come back to economics because you have to pay for them.

Development of Market Efficiency Technological Innovation (Harmancioglu)
Nukhet won the PDMA Dissertation Award last year. She came this year to present the conclusion of the research that the award funded.

What’s really interesting about this research is how much it leverages the quantitative analysis of existing literature asking the same questions. This type of research is called “meta-analysis”. Here were some of her conclusions from one of her studies:

NPD process execution is the key to achieving positional advantages in the market. Being proficient at ideation, for instance, will affect your end-product’s performance.
Development speed reduces the degree of the customer need met.
Project formality provides cost efficiencies, but project climate (e.g. cross-functionality) increases speed—both lead to better execution. So collaborate, but not too much.
Product advantage is more important as the market demand shrinks and the competition becomes more intense.

PDMA 2006 Research Forum – 10/21/06 Morning

2006-10-21T07:01:00.000-07:00

I’m attending the Product Development Management Association (PDMA) 2006 Research Forum today. I learned a lot here last year and have high expectations for this year. Here’s a log of interesting research results I’ve learned about this morning.

Product review practices (Schmidt, Sarangee, Montoya-Weiss)
These researchers investigated the product review practices for new product development (NPD). They found that the quality of the review practice is what predicts the success of innovation, more than the number of review checkpoints in the process. The quality of the review practice was self-measured though.

Impact of IT usage in NPD performance (Barczak, Sultan, Hultink)
Types of IT tools investigated included desktop software, web-based tools. These tools are supposed to increase collaboration, reduce NPD cycle times, etc.

Interesting conclusions: IT appears to be a way to create empowerment for NPD teams. In other words, if you use IT tools, you can give team members more autonomy. Also, you can’t expect immediate results, it takes time to embed IT tools into a NPD process.

NPD performance was measured as product quality, speed to market, budget, and market performance. The types of IT tools covered included communication & collaboration, product development, project management, information & knowledge management, and market research & analysis.

Using sales force intelligence in B2B NPD (Bonney, Kahn)
This project sought to answer whether listening to your sales force is a wise decision or not. The study suggests that it depends on how the information is used.

They also found that during idea-generation stage, NPD teams will seek information from sales via tacit monitoring. It’s only later that NPD teams tend to seek out information more explicitly. However, NPD teams tended to prefer to talk to a handful of sales people, an inner circle, so to speak.

Effect of application selection (Thongpapanl, O’Connor, Sarin)
They wanted to know how R&D teams choose applications to explore for major innovations. By application they were referring to the deployment of the innovation to a specific purpose, to solve a specific problem.

Initially they observed that it was impossible to explore all application possibilities and that application exploration approaches were suboptimal.

They surveyed 2000 NPD managers and R&D individual contributors from large companies. The survey had a response rate of 11.5%.

The study showed that the amount of time you spend on application exploration positively impacts the eventual business impact.

They define the following term: Application Market Exploration (AME).

Coffee Grounds, Flying Bathroom

2006-10-21T07:00:00.000-07:00

I’m flying out to the annual Product Development Management Association. Getting up to stretch my legs, I took a trip to the lavatory where I was amused to see a bag of coffee grounds hooked to the coat hanger on the door. I finished up my business, and still smiling from amusement, I exited the lavatory and asked a flight attendant what the heck was that bag of coffee grounds doing there?

She said it was to freshen the air in there. I laughed and asked her why they didn’t just use an air freshener. She said United doesn’t supply them with air fresheners so they’re forced to use things like the bag of coffee grounds. “Maybe I should start a business,” I joked. “Yes, you should” she responded, chuckling, as I walked back to my seat still pondering and smiling in amusement.

Yet another example of Eric von Hippel’s astute observation that users are a wonderful source of innovative ideas. I knew that airlines have been in financial trouble and that this trend would be creating opportunities for innovation, but not being a flight attendant or a pilot or a mechanic who’s actually on the ground (or in the sky as the case may be), I wouldn’t have known what the problems were or what resources existed close at hand to solve the problem.

Business Model Innovation

2006-10-12T16:09:00.000-07:00

Business model innovation has captured the attention of executives tasked with achieving growth in the face of increasing competitive pressure. Business model innovation suggests that if you took an existing product and repackaged how you sold it, you can hold off competitive pressures and even capture entirely new market segments. For obvious reasons this is attractive to companies, but when a company’s brightest are tasked with finding ways to innovate their business model, they’re often forced to make it up as they go along.

What’s needed is a how-to manual for business model innovation.

Below I explain what a business model is and how it can be differentiated by comparing Netflix with Blockbuster. After giving a high-level overview of business model innovation, I’ve provided a list of steps to go through to arrive at business model transformation.

Netflix vs. Blockbuster, a comparison of business models
Suppose you’re over at a friend’s house for dinner on a Saturday evening. After dinner, you settle down in the living room to watch a movie. The movie, however, turns out to be a real bore and as your mind wanders, you begin to wonder…did my friend rent this from Netflix or Blockbuster?

From just watching the movie, you wouldn’t know where it came from. Both companies sell exactly the same product. So what makes these companies different? The answer: their business models.

What makes up a business model? Let’s answer that by reasoning through why anyone would buy from Netflix when practically every town in America, big or small, has a Blockbuster. The first person to rent from Netflix must have done so for a reason. Netflix offered some advantage over Blockbuster; it solved some deeply-rooted, unmet need among Blockbuster consumers.

A business model can be thought of as the way that a seller transacts with a customer. Some business models are less consumer-friendly than others. Netflix picked up on the discontent Blockbuster customers felt about late fees and they offered a business model that got rid of them. There are now many happy Netflix customers, and I am among them.

But is the Netflix model the be-all end-all of business models for DVD rental? To answer that question, we simply need to ask whether or not consumers have any unmet needs with regard to the way they do business with Netflix.

There are indeed many Netflix customers who are very unsatisfied because of a problem they are calling “throttling.” In fact there is a whole blog out there called www.hackingnetflix.com that has helped expose how Netflix becomes gradually less responsive to its most avid users, a problem that has become known as “throttling.”

In addition, many customers complain about discs arriving scratched. Now with the Blockbuster business model, a customer can just go back to the store to get another copy and finish watching the movie that night. With Netflix, if it’s a Friday night, you’re not going to get to see the rest of that movie until Wednesday. Bummer.

As illustrated, the definition of a business model is the way a supplier transacts with its customers. Business model innovation focuses on addressing unmet needs on the part of consumers who dislike some aspect of an existing business model for an existing category.

As with so many other types of innovation, business model innovation comes down to what my dear old professor Eric von Hippel taught me at MIT: market needs drive innovation.

Business Model Innovation: How-To
How then, can companies go about innovating their business model? I would like to invite my fellow innovation bloggers to share their ideas, but I think business model innovation consists of the following steps:

Identify the market category
Gain insight into what the market dislikes about incumbent business models for that category
Scout for business models that address those problems in adjacent industrie
Take action

There are different ways of obtaining the information needed for each of these steps. The market category in question would be your own market category if you’re seeking to innovate on your own business model. But if you’re an entrepreneur that’s not tied down to any existing product or market, you could pick any market category where you’d like to investigate opportunities for business model innovation.

The second step involves gathering insights about unmet needs. Ethnography is one way of doing it, if you have the time and resources. But more and more, people are turning to the Internet for those types of insights.

The third step is very much like technology scouting. That is to say, a business model is just another form of intellectual property, or I-Stuff, as Suzanne Harrison describes it in her new book, Einstein in the Boardroom.

Open Innovation Blueprint: Commandment 9

2006-09-18T20:08:00.000-07:00

This continues my on-going blog on mapping out a blueprint for implementing Open Innovation. The first entry in this series talked about the framework I am using to analyze this question, the Ten Commandments of Change Management. Open Innovation is a big change, and therefore requires a change management program. In today's blog, I'll cover the ninth element of the framework:

9. Communicate, involve people, and be honest
The new paradigm of Open Innovation accelerates time to market, however the underlying matchmaking of technologies and markets is still a game of chance. People in your company need to know what kind of results to expect, which is why benchmarking with other companies is such a good idea. For instance, did you know that you typically have to evaluate 100 good ideas before you find one to take to market? That’s what P&G reports and they’re one of the earliest adopters. Incidentally, a side-benefit of benchmarking is that you build relationships with other companies, making it possible to talk with them also about doing Open Innovation together.

As I always say, people support that which they help create so build support for Open Innovation by involving stakeholders in the process. For instance, promote some of your best R&D people to be Technology Brokers. You may need to give them some training in business skills such as negotiation, but their clout with the R&D people helps smooth the transition to Open Innovation.

Another way of involving R&D people is to have them participate in the technology scouting, prioritization, and vetting processes. Engineers identify problems with technology very well so try giving them a hundred leads and asking which ones are the charlatans. The ones they don’t consider charlatans aren’t necessarily gems either, but this method of prioritization seems to be easier than asking R&D which lead is best, and, like I said, it involves them in the process.

Also, the Chief Innovation Officer should monitor his or staff to make sure they’re not harping on R&D people about a “Not Invented Here” culture. I believe that NIH is a problem that stems from lack of communication between management and R&D. R&D people don’t like to reinvent the wheel; they know that great people stand on the shoulders of giants (Einstein, et al). A CIO can not only monitor the Open Innovation unit’s staff but also train R&D people to insist that Technology Brokers search harder, faster, and more broadly to find qualified leads. R&D people are good at critiquing technology and the issues they raise should be embraced and dealt with, not dismissed as NIH culture.

Show that you value your R&D staff’s contributions to Open Innovation. Try to schedule meetings at times convenient for them. Bring cookies to the Technology Scouting lead-prioritization meetings, because typically R&D would rather be inventing something new than evaluating someone else’s inventions. Generally less resistance comes with Technology Marketing processes due to the personal satisfaction an inventor gets from finding new sources of value in their invention. But bring cookies to all meetings with R&D for good measure. ;-)

I'll mention again, in the spirit of being open, all of these ideas are open for discussion, so please share your thoughts!

A new role model: the hedgehog

2006-09-11T10:00:00.000-07:00

An investor I know, Ho Nam, recently wrote a blog posting about foxes vs. hedgehogs. It's full of insightful comparrisons about types of startup-founders. Here are a couple I liked:

Foxes = serial entrepreneurs / Hedgehogs = stay at one company
Foxes = VC-friendly / Hedgehogs = like to boot-strap

So I have a new role model, I guess: the hedgehog ;-)

The Innovation Equation

2006-08-30T16:51:00.000-07:00

IBM conducted a very insightful study of 10 innovations which revealed an equation, so to speak, for innovation:

Market Insight

+ Technological Know-How

------------------------

Innovation

IBM shows this equation empirically through 10 examples. Here were two of the examples I thought were most compelling illustrations of this model of innovation:

Cemex:

Expensive equipment sits idle while waiting for cement deliveries

+ Satellite tracking technology and advanced scheduling software

------------------------------------------------------------------

Reduced the delivery window from 3 hours to 20 minutes

Progressive Insurance:

Good drivers want and expect cheaper rates

+ Satellite tracking technology & advanced risk calculating methods

-------------------------------------------------------------------

Aggressive pricing for good drivers while increasing profit

Technology Scouting Topology

2006-08-18T21:04:00.000-07:00

Research - Technology Management, a publication of IRI published an article in June 2006 in which the authors propose a new topology for thinking about the types of Technology Scouting conducted in Open Innovation. I thought the topology was very helpful because of all the debate regarding what constitutes Open Innovation and versus traditional out-sourcing, M&A, alliances, Business Development, Corporate VC, and sourcing. Here is their proposed topology.

External Technology Sourcing Topology

Level 1 - Cost and Supply Chain Management
Level 2 - Strategic Partnering
Level 3 - Extended External Networks
Level N - Integrated External Innovation

In Level 1, companies “focus on modifying existing products or processes to meet current market needs.” To me, this means Level 1 is for the Incremental Innovation Christensen talks about. It either adds a new bell/whistle to the product or helps lower the cost which can allow a company to lower their price.

In Level 2, the “focus…varies but includes specific market needs, development skills and market access.”

In Level 3, what the company needs is “determined by specific areas of business activity, such as identifying therapeutic candidates, new catalysts or other materials.”

In Level N, “the business drivers…include strategic issues that necessitate multiple sources of innovation, a fast pace of innovation as well as a leadership vision that sets expectations around truly discontinuous innovations.”

Open Innovation Blueprint: Commandment 8

2006-08-17T15:11:00.000-07:00

This continues my on-going blog on mapping out a blueprint for implementing Open Innovation. The first entry in this series talked about the framework I am using to analyze this question, the Ten Commandments of Change Management. Open Innovation is a big change, and therefore requires a change management program. In today's blog, I'll cover the eigth element of the framework:

8. Develop enabling structures
Enabling structures include policies, new roles, processes, etc. needed to run Open Innovation. You should plan to introduce these structures as you build toward running your Open Innovation system in the steady state.

Policies – P&G says all technology becomes available outside of P&G after 3-5 years. Likewise, for external scouting, they aim to have 50% come from outside.

Roles – The CIO’s full-time staff includes Technology Brokers and their research aids. Make the brokers responsible for both scouting and marketing since, as P&G says, “Often, we find that the most profitable arrangements are ones where we both license to and license from the same company.” (HBR p. 8) The CIO’s dotted-line reports include an innovation manager from each business unit as well as legal support for transactions. Have the business unit staff a Quality Assurance function to evaluate in-bound technology. QA will not typically be the same people as your senior scientists and engineers who need to integrate and continue to invent technology for internal and external application.

Process – There’s a lot to the processes for Technology Scouting and Technology Marketing, contact me if you’d like to talk in more detail. At a high level, Technology Scouting starts with understanding market and technology trends and the needs arising from them. From there, search your own company’s technology for solutions that provide the desired set of benefits. Continue the search externally until a suitable match is found. For Technology Marketing, begin by articulating the benefits of each technology in the portfolio. Devote a fixed amount of time to searching for evidence of the need for those benefits in different markets. At each stage of these processes, you must prioritize the opportunities and if you run into a brick wall, work on re-articulating the benefits and re-searching. For Innovation Roadmapping, there are many good tools and strategies that borrow from “Seeing What’s Next” by Clayton Christensen.

Budgeting – Technology Brokers need to have a lot of leeway if they’re supposed to be out doing deals with other companies. You don’t want them to lose a negotiation because your company’s budget cycle isn’t for another month.

Reward Structure – It’s tempting to reward based on the number of in-bound deals, but that misses the point. According to P&G’s experience, the best way is to reward for speed to market. Give R&D people their ordinary bonus, no matter the source of the technologies they apply. But give an extra bonus if they can get a product done in half the time. For Technology Marketing, consider replacing a bonus based on the number of patents to a bonus based on the number of uses of the technology internally or the revenues from licensing it externally. Another consideration is how much time researchers spend with your customers as IBM does with its First of a Kind (FOAK) projects. A more general point is to reward your R&D people for getting out of the technology to enrich their understanding of the market’s problem and adapting the technology to work well at fulfilling the customer need.

Measurement Systems – According to a recent study by BCG (“Innovation 2006” and “Measuring Innovation 2006”), most companies struggle with measuring innovation performance. The measurements that are seen as the most useful are: Time to market, new product sales, and Innovation ROI. I’d like to thank Steve Winters for letting me know about this study.

I'll mention again, in the spirit of being open, all of these ideas are open for discussion, so please share your thoughts!

IBM has identified three kinds of innovation

2006-08-09T15:06:00.000-07:00

IBM recently published a continuation of its Global CEO Study entitled Expanding the Innovation Horizon. One key finding is that a large proportion of the 765 CEOs surveyed are beginning to pay a lot more attention to business model innovation.

IBM saw three types of innovation in general:

Business model - Innovation in the structure and/or financial model of the business
Operational - Innovation that improves the effectiveness and efficiency of core processes and functions
Products/services/markets - Innovation applied to products or services or "go-to-market" activities

I always find it useful to think about business concepts in terms of their impact on shareholder value, since in many respects the buck stops with them. Most shareholders care about sustainable growth, generally meaning profit growth.

The third type of innovation, products/services/markets, gets to profit growth directly by creating new streams of revenue.

The second type of innovation, operational, gets to profit growth by attacking the cost side of the profit equation: make a business more efficient so it can claim more profit for itself. The other possible outcome of operational innovation is lowering your prices by reducing cost. That can allow you to capture more market share, albeit at a lower price, and grow by increasing volume--as long as the numbers work out.

The first type of innovation, business model, gets to growth by changing the game. By thinking creatively about how to deliver value to the customer you can achieve growth through new revenues, increased volume, lower costs, lower prices that increase volume, or all of the above.

A popular example of business model innovation is the DVD rental market. Blockbuster Video's business model was to deliver DVDs to customers in retail outlets. The rental terms were you rent for 3 days and return the video on time or pay a late fee. Then NetFlix came out with the same product but a different business model. With NetFlix you pay a subscription fee with all-you-can-eat DVDs. NetFlix recognized some of the problems customers hated about the Blockbuster business model and they solved them. For instance, customers didn't like it when all the videos they wanted to see were checked out, they didn't like late fees, and they didn't like not having some certainty the movie they were about to watch was any good or not.

IBM on the role of the Chief Innovation Officer

2006-07-31T16:54:00.000-07:00

In March 2006, IBM launched a campaign to promote the role of the Chief Innovation Officer:
http://www-306.ibm.com/e-business/ondemand/us/pointofview/cio/mar06/featured_story.html

There are many paths to the role, but I think IBM's perspective makes a lot of sense: transform the Chief Information Officer into Chief Innovation Officer.
What's the most strategically important information in a corporation but information about markets, technologies, and competitors. That information is the lifeblood of innovation. So if Chief Information Officers are looking to be more strategic as IT matures as a management area, it also makes sense to take on the new title of Chief Innovation Officer.

What we need to do now is come up with a standard definition of the role. What are its responsibilities? How does it relate to the rest of the organization? What's its budget?

Open Innovation Blueprint: Commandment 7

2006-07-27T16:55:00.000-07:00

CEO communicates the need for Open Innovation
Appoint Chief Innovation Officer
Identify business unit to pilot Open Innovation
Set goals with the business unit

Second month

Staff the Open Innovation unit
Train R&D on how to work with the Open Innovation unit
Technology Scouting: Identify and prioritize key market trends and needs
Technology Marketing: Identify and categorize IP

Third month

Initiate the Innovation Roadmapping process
Begin operating your Technology Scouting and Marketing processes
Continue training and executive communication
Initiate relationship with peer companies to share best practices

I'll mention again, in the spirit of being open, all of these ideas are open for discussion, so please share your thoughts!

Open Innovation Blueprint: Commandment 6

2006-07-10T16:36:00.000-07:00

Open Innovation Blueprint: Commandment 5

2006-07-06T23:12:00.000-07:00

New blog from the Product Development and Management Association (PDMA)

2006-06-28T14:09:00.000-07:00

Here's an announcement about a new blog from PDMA that I am contributing to...

Introducing.... the PDMA Blog! (blog.pdma.org)

We’ve assembled a diverse panel of new product development experts…

….who will be sharing their thoughts, experiences, and recommendations on product development with readers of our new PDMA BLOG!

Some examples of blogging topics so far:

OPEN INNOVATION BLUEPRINT
INNOVATION IN THE FUZZY FRONT END
THE “INVENTOR MENTALITY”
LEARNING FROM PRODUCT FAILURES
THE NATURE OF CREATIVITY
USING AND CHOOSING PLM TOOLS
THE USE OF COLLABORATIVE TOOLS IN INNOVATION
TOYOTA AND BENCHMARKING
ALIGNMENT IN NEW PRODUCT DEVELOPMENT

Click to view these recent posts:

Renegade Innovation - Donavan Hardenbrook, Intel Corporation
Beyond New Product Development - New Business Development - Mike Docherty, Venture2
The Virtuous Cycle of Open Innovation - Michael Osofsky, Accelovation
Strange New Products - David Olson, PDMA Webmaster
Alignment - Dave Angelow, Business Foundations LLC
Paintball and Product Development - Montie Roland, Montie Design
The Role of Collaborative Tools in Innovation - Tricia Sutton, Sutton Enterprises

OUR BLOGGING PANEL INCLUDES:

* Dave Angelow -- Principal with Business Foundations LLC, assisting organzations with NPD process redesign and Product Lifecycle Management (PLM) selection/implementation. He is also president of the PDMA chapter in Austin . H is focus over his 20+ years of experience is on Business Process Redesign and Systems-Driven Organizational Transformation.

* David Olson, NPDP – Principal with David Olson Consulting, with nearly 30 years of experience in new product marketing and market research at the Leo Burnett Company, and is PDMA’s current national Webmaster. His focus is on market research, concept testing, sales forecasting, and launches of new consumer goods and services.

* Donavan Hardenbrook, NPDP – A senior consultant with 16 years of experience at Intel Corporation, supporting key process improvement initiatives at the company. He is also president of the PDMA chapter in Arizona . His a reas of personal interest are portfolio management, product development processes, requirements engineering, project management, and external benchmarking.

* Michael Osofsky – Co-founder and Chief Innovation Officer of Accelovation, and a graduate of MIT (working with Eric von Hippel), and founder of the MIT Innovation Club. His main interest is in understanding where creative, valuable ideas come from, and how tools and techniques can mine the world for creative insights.

* Mike Docherty – Head of a new ventures company called Venture2 that is focused on identifying and commercializing new business ventures in the consumer product markets. He also operates a corporate venture incubator called The Launching Pad in Delray Beach , Florida . His primary areas of focus include “open innovation” networks, and the commercialization of breakthrough innovation.

* Montie Roland – Principal and Founder of Montie Design, a product design firm in North Carolina . He has 15 years of experience designing products for diverse market spaces including industrial, commercial and military. He also is president of the PDMA chapter in The Carolinas. His primary area of interest is finding better ways to identify and define a vision for new products.

* Tricia Sutton, PMP, NPDP – President of Sutton Enterprises, a management consulting firm. She is also president of the PDMA chapter in Chicago , and editor of “Chapter Spotlight Features” in Visions Magazine. Her work focuses on helping organizations apply lean principles to increase effectiveness and innovation in product development and business operations.

Front End of Innovation 2006

2006-06-28T14:00:00.000-07:00

PDMA and IIR hosted the fourth annual Fuzzy Front End of Innovation conference at the end of May. A high-profile event, it attracted over 700 people and featured the field's greatest speakers.

One of our customers commented, and I thought this was particularly insightful, that all the thought leaders seemed to be saying the same things. That's a good because it means we can begin to unify all of the theories into a comprehensive best practice.

If anyone's interested in working on a practitioner-led effort to create a Unified Innovation Theory that, let me know.

Open Innovation Blueprint: Commandment 4

2006-06-28T13:50:00.000-07:00

Virtuous Cycle of Open Innovation

2006-06-19T18:21:00.000-07:00

Virtuous cycles are the elegant phenomenon in nature where systems function on their own because of self-reinforcing feedback loops. I think I see a virtuous cycle driving Open Innovation, illustrated in the diagram below.

The cycle seems to have begun with Technology Marketing (also called Intellectual Asset Management), back in the late 1990’s. Companies had accumulated many, many patents that were not making them any money. Companies such as P&G set up External Business Development groups to out-license those technologies. These groups paid for themselves in licensing revenues, but it didn’t contribute to the production of new products, the primary driver of sustainable growth.

Seeking truly innovative products to grow their businesses, companies such as P&G then began in-licensing technology from the outside, what many call Technology Scouting and which P&G calls its Connect + Develop program. Since so many companies had begun to do Technology Marketing, there was a nice big Technology Pool to select from to build new products with.

So many companies have begun to do Technology Scouting--close to one quarter of the top 1000 R&D spenders according to a Bain study--that they are beginning to have to compete for the hottest stuff. Paying the top dollar isn’t good enough for Technology Marketers pushing their latest and greatest. Buyers need to bring their own technologies to the negotiating table to differentiate themselves. That adds more technology to the pool, completing the virtuous cycle.

Of course no virtuous cycle builds on itself indefinitely. They all have a balancing force. But in this case, perhaps the most significant constraint to speak of is mankind’s own capacity to invent new technologies.

Open Innovation Blueprint: Commandment 3

2006-06-16T11:27:00.000-07:00

Open Innovation Blueprint: Commandment 2

2006-06-13T22:31:00.000-07:00

Technology Scouting provides faster time to market and can block a competitor from accessing a vital new invention available from another open innovator. P&G estimates they have effectively increased the size of their research pool to a million inventors by looking to the outside world (Buckley, 2005) and they currently source 35% of their ideas externally.
Technology Marketing allows you to create new streams of revenue through IP licensing. IBM received $1.9 billion from IP royalty payments in 2001. (Thinksmart Blog) That was a fifth of their revenue!

Paint a picture for your organization depicting a future where technology flows effortlessly in and out of your company leading to a global acceleration in innovation. It’s all about getting products that solve important problems to market more quickly by making use of the wheels already invented by others. This new paradigm will improve quality of life for all consumers. Make sure the image of out-sourced R&D doesn’t figure in your imagery though—the world doesn’t need fewer inventions, it needs more! Open Innovation just helps inventions get to the place where they’re needed most.

I'll mention again, in the spirit of being open, all of these ideas are open for discussion, so please share your thoughts!

Open Innovation Blueprint: Commandment 1

2006-06-11T14:37:00.000-07:00