In this webinar, we invite you to hear more about Business Model Innovation and learn a systematic and pragmatic approach. This can help you re-imagine your business model in exciting and sometimes even radical ways.
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What do you say when you have nothing new to say? That is the dilemma marketers face in mature categories where the product's features and benefits are well understood. Even more challenging is when your product is virtually the same as the competition. Running ads to remind the market what they already know is wasteful and potentially annoying. But you can't risk being invisible to the market or you will lose brand awareness.
That's where the Extreme Effort Tool comes in handy. The tool works by exaggerating the effort one must go to use the product. Instead of promoting a particular benefit, the tool emphasizes the overall attractiveness and desirability. It is an efficient way to keep your product in the mind's of the audience and stand out in a busy marketplace.
The
tool is one of eight patterns embedded in most innovative commercials.
Jacob Goldenberg and his colleagues describe these simple, well-defined
design structures in their book, "Cracking the Ad Code," and provide a step-by-step approach to using them. The tools are:
1. Unification
2. Activation
3. Metaphor
4. Subtraction
5. Extreme Consequence
6. Absurd Alternative
7. Inversion
8. Extreme Effort
Here is an example from Kohler:
There are two ways to use the tool. One is to show the extreme effort customers will go to use or acquire the product, as in the Kohler commercial. The other is to show the extreme effort the company will go to provide or deliver the product. This is particularly good for service companies as they can demonstrate, in an extreme, outlandish way, the lengths they will go to deliver that service. Here is an example:
Suppose you're told that three out of four car accidents happen within 25 miles of your home. Are you safer driving away from home? Based on this statistic alone, most people would assume they are safer. But the picture changes when you consider an important part of this scenario called the base rate. In probability and statistics, the base rate is the underlying probability unconditioned by prior events. Failing to consider the base rate leads to wrong conclusions, known as the base-rate fallacy. In this example, the base rate is the total percentage of driving that happens within 25 miles of your home. Let's assume it is 90%. Given the odds of an accident are only 75% in an area you spend 90% of your time, driving close to home is clearly safer.
Why does this matter in innovation? Understanding the base rate with a product's performance can lead to hidden insights and opportunities. Look at this example, as reported by CNET:
"Where exactly do most people accidentally ruin their iPhone? If you guessed the toilet you'd be wrong, says a new survey. According to device warranty provider Squaretrade, most people — 21 percent to be precise — damaged their device in the kitchen. The runner up, at 18 percent, is the living room, followed by the bathroom at 16 percent."
Well that's fine, but now let's consider the base rate: how much total time do we spend using an iPhone in the kitchen versus other places? Assume people spend an average of 10% of their iPhone usage in the kitchen. Viewed this way, the rate of iPhone accidents in the kitchen seems high. We would have to conclude the kitchen is not a safe place to use a smartphone. At the other end, let's assume instead we spend 30% of our cellular calling time in the kitchen. In light of the base rate, the kitchen is actually a safe haven for iPhones.
For innovation practitioners, here is the point: when you see disparities between the point estimate and the base rate, you should ask why. Perhaps there is an opportunity to innovate a solution. If the iPhone is at risk in the kitchen, perhaps an innovation technique like Task Unification could help. Is there another component in the vicinity of the kitchen (The Closed World) that could be recruited to help reduce the risk of breakage? If so, you may have a nice commercial opportunity.
If the iPhone is safer in the kitchen, you should also ask why. Are there features, user habits, or design aspects that make it safer? Can they be generalized and embedded into other smartphones? Can they be used in other things like kitchen tools? Once again, you may have a nice commercial opportunity on your hands – thanks to the base rate.
The bottom line is that ignoring the base rate can lead to wrong judgments. Instead, take advantage of this often hidden gem. Peek into the base rate in any product scenario to see what possible opportunities lie within.
Navigating complex organizations takes skill and savviness, or what some call office politics. It is such an important skill that world class companies like GE and Johnson & Johnson teach it to their employees and reward them for using it. We may not like it, but for good ideas and people to survive, we must build organizational savviness and influence skills.
Succeeding at innovation takes that same organizational savviness. Here are eight tips to improve your innovation savviness:
1. You don’t have to be the smartest guy in the room. Corporate rookies, especially newly-minted MBA’s, rush in with the goal of getting to the best answer faster than anyone else in the room. Even when you are the smartest guy (gal) in the room, you should avoid this behavior. Otherwise, you will gradually lose allies. People will stop inviting you, and you will soon become a “solo act.” Instead, work hard to offer your ideas with the intent of combining them with the best of others. Be seen as an integrator of ideas rather than competing to create the best idea.
2. Make sure your innovation efforts are seen as relevant. It’s tempting to be the first to jump on the latest fad and prove your entrepreneurial spirit. However, by doing so, you risk being seen as someone who is out of touch, too theoretical, or “chasing windmills.” You may think you have a good grasp of what’s relevant to the organization. But your views may differ dramatically from what the boss sees at her level of the organization. Instead, make sure you solicit advice about the relevance of your project. How does it link to the strategic initiatives of the firm? How would you explain your project’s importance to an outsider? Pull out if you have difficulty making this link.
3. Work only on those projects with a clear, supported mandate from senior management. While your innovation project may be relevant, that is not the same as having a mandate. Many initiatives and ideas may be relevant to the organization’s success, but only a limited number get the necessary dollars and headcount to be successful. Link yourself only to projects that have management’s support. Avoid being sucked into every initiative that comes your way. If you are talented, people will want your time and energy on their projects. Be sure to “limit rather than dilute” – it is better to succeed on a few projects than deliver marginal results on many.
4. Timing is everything. Every project or initiative follows a predictable life cycle: intro, growth, maturity, and decline. Be sure to join innovation initiatives early in their life cycle, and get out when they mature. Some make the mistake of hanging on too long, after the program has lost its “oomph.” Either they didn’t see the decline coming, or they became too comfortable to change. Either way, they are doomed if they stay with an innovation program to its bitter end.
5. Learn to recognize…and deal with…sabotage by others. People treat ideas differently depending on the source of the idea. If an idea comes from an internal peer rival, people tend to see it as tainted. They sabotage it because it’s not theirs. If the same idea had come from outside the firm (from a competitor or consultant), people overvalue it. They see it as tempting. You should expect to see this behavior and have ways to neutralize its effect. One way is to not associate ideas with a specific person, especially you. Contrary to popular wisdom, avoid giving attribution the person who created the idea. This makes sure the idea is stripped of any associations related to the inventor. The idea now has its best chance of survival.
6. Savviness is not the same as manipulation. There is an old saying in the corporate world: “Don’t make enemies of your peers. If you do, you won’t need more enemies – they can ruin just fine.” When navigating the innovation waters, don’t see it as a political chess game where you have to manipulate others to get what you want. Savvy innovators have a high level of political astuteness and possess
strategies and skills for ethically navigating the corporate terrain to
gain “organizational influence and impact with integrity.”
7. “It’s not what you don’t know that will kill you. It’s what you know that ain’t really so.” Will Rogers is credited with this savvy quote. That wisdom holds true today for innovation. People let their current knowledge about an issue blind them to other facts that may contradict their beliefs. Holding onto a belief that you are certain is true…only to find out later that it isn’t…will cause others to question your flexibility and judgment. Learn to recognize this blind spot (called Confirmation Bias), and seek ways to weigh data equally, including data contrary to your point of view.
8. Treat yourself to continuous development and improvement. The biggest mistake corporate innovators make is they stop developing themselves. Your first priority is to assure your relevance to the organization, and you can do that only if you take the time to learn new skills and update old ones. If you are doing today’s job on twenty year old skills, you have become the proverbial “dead man walking.” Instead, you should make every year count – take time to do something, anything that develops and improves your innovation abilities.
Photo: Fresh Spectrum http://freshspectrum.com/social-media-savviness-indicato/
Nissan’s latest innovation takes the lowly car horn and elevates it to the status of “smart.” The 2013 Altima has a new feature that’s likely to surprise buyers. It’s called Easy-Fill Tire Alert. The car’s tire pressure monitoring system informs drivers when a tire is low on air and then uses the sedan’s horn and hazard lights to confirm that the tire has been filled adequately.
This is a classic use of the Task Unification Technique, one of five in the innovation method called SIT. Task Unification works by taking a component and assigning it an additional job. That component can be an internal resource (in this case, something on or in the car) or an external resource, something in the vicinity of the car, but not within the manufacturer’s control (a passenger, for example). The additional job can be “stolen” from another component or it can be assigned something new.
Auto makers have used this seemingly simple component before for other purposes than just beeping at other drivers. Car horns have been “recruited” to sound off as a burglar alarm, for example. Some models of cars have the horn sound when the car is locked or unlocked. Now, Nissan’s clever innovation assigns the horn the new task of assisting with tire maintenance. Brilliant!
Nissan’s humorous TV commercial to introduce the new feature is brilliant, too:
From Nissan:
The “Easy-Fill Tire Alert” system is an all-new control module currently being phased into vehicle redesigns like the all-new 2013 Nissan Altima. First, the vehicle’s tire-pressure warning system alerts a driver to a low tire; and on some models displays the current pressure and tire or tires that require attention on the dashboard display. When alerted, drivers should stop at the nearest gas station to fill the tire with an available air hose. Once air begins flowing into the tire, the vehicle’s four-way flashers come on to confirm the process has started. When the tire hits the appropriate pressure level, the horn then chirps to let drivers know the tire has been properly inflated. If the driver continues to fill the tire with air, the horn honks more aggressively to indicate over inflation. Once air is let out of the tire, the horn chirps once to indicate the correct pressure has been reached.
Just imagine what else a car horn can do. Using Task Unification makes it easy.
It might surprise you that a single innovation pattern, Multiplication, formed the premise of all photography. The cameras you use today evolved from Multiplication. The entire photography industry continues to benefit thanks to this powerful pattern.
Multiplication is one of five simple patterns innovators have used for thousands of years. These patterns are the basis of Systematic Inventive Thinking, a method that channels your thinking and regulates the ideation process. The method works by taking a product, service, or process and applying a pattern to it. This changes the starting point. It morphs the product into something weird, perhaps unrecognizable. With this altered configuration (we call the Virtual Product), you work backwards to link it to a problem that it addresses or new benefit it delivers. The process is called Function Follows Form.
The photography industry continues to evolve thanks to more of the SIT patterns. At this years Photokina show in Cologne, Germany, camera makers unveiled their latest and greatest inventions. Here is an example of the Subtraction pattern in the new wave of digital photography (as reported by CNET):
The mirrorless cameras leave out the reflex mirror of SLRs, which use it to bounce light into the viewfinder so a photographer can see through the camera’s lens. When it’s time to take a photo, the SLR mirror flips up out of the way, the shutter opens, the light hits the image sensor, then the mirror flips back down.With mirrorless cameras, the light just goes straight to the image sensor all the time. If there’s a viewfinder at all, it’s an electronic display, often an optional accessory. The design is simpler, smaller, and all the rage in the industry.
As camera-enabled smartphones have grown in popularity, consumers have learned to love the ability to photograph and then immediately share their photo over the Internet. Now, traditional camera makers are responding to the threat in an interesting way. Rather than compete head-to-head with smartphones, they are using the Task Unification pattern instead. Task Unification works by “assigning an additional job to an existing resource within the Closed World (where the product or service is being consumed). See if you can spot the Task Unification in this new crop of cameras:
Wireless networking in the camera industry in general has been conspicuous by its absence, isolating cameras from people’s in-the-moment sharing activities. Curiously, though, the very smartphones that have put the camera industry so much on the defensive are proving to be its savior, too. Cameras now can connect directly to those smartphones, letting the two cooperate rather than compete. Canon’s new SLR, the EOS 6D announced at Photokina, has Wi-Fi built in; with the Canon EOS Remote app for iOS and Android, people can remotely operate the camera, review photos even while the camera is stashed away in luggage, and most importantly, transfer photos to a smartphone for quick sharing. Another new Wi-Fi-enabled Canon camera is the PowerShot S110. For this model — and doubtless others to come — smartphone users can connect over Wi-Fi with the CameraWindow app for iOS or for Android. That lets people share their photos immediately using a phone.
It’s official. Pinterest has joined the elite group of social apps along with Facebook, Twitter, LinkedIn, Youtube, and Google Plus.
“Pinterest is a Virtual Pinboard that lets you organize and share all the beautiful things you find on the web.” How popular is it? It is the fastest site ever to break through the 10 million unique visitor mark. A report by Shareaholic claims, “Pinterest drives more referral traffic than Google+, LinkedIn and YouTube combined.” As of March 2012, Pinterest was valued at $1.5 billion.
There are many creative ways to use Pinterest. New apps are emerging around it much like what happened with Twitter. But to maintain growth, Pinterest needs innovation. For this month’s LAB, we will apply Attribute Dependency, one of five techniques of Systematic Inventive Thinking, to Pinterest. Our goal will be to create new innovations around Pinterest as we did with Twitter and Facebook.
To use Attribute Dependency, make two lists. The first is a list of internal attributes. The second is a list of external attributes -those factors that are not under your control, but that vary in the context of how the product or service is used. Then, create a matrix with the internal and external attributes on one axis, and the internal attributes only on the other axis. The matrix creates combinations of internal-to-internal and internal-to-external attributes that we will use to innovate. We take these virtual combinations and envision them in two ways. If no dependency exists between the attributes, we create one. If a dependency exists, we break it. Using Function Follows Form, we envision what the benefit or potential value might be from the new (or broken) dependency between the two attributes.
The attributes of Pinterest are:
Internal Attributes:
External Attributes:
The new concepts are:
1. Push To Friends: Pinterest pushes a notification to Facebook friends or Twitter followers based on a keyword in the description of the Pin. This is a bit like RSS feeds into a reader, but different in that the Pinterest board owner gets to decide what gets pushed to friends. There are some existing links between Pinterest and the other social networks, but an approach like this could make it much stronger and more valuable.
2. Pin Recommender: Pinterest finds and recommends new Pins to you based on keywords in your Pin or Board description. It is similar to the “You Might Also Like…” feature on many web applications. A new app called SpinPicks does something similar, but it does not pull from the inventory of images in Pinterest.
3. Board Cloud: The Boards of a Pinner change size depending on Likes and Followers. This is similar to a tag cloud where each word varies in size depending on how often it shows up on a website or document. Tag clouds help the reader quickly understand which words are most prominent or popular. Twitter has a similar feature called Trendsmap. Given the highly visual nature of Pinterest, I would expect users to be able to turn features like this on or off in their settings to give a more personalized experience.
4. Twitter Trender: The boards displayed on the viewers main page vary depending on what is trending on Twitter. Twitter has become the “eyes and ears” of the world, and hot topics trend all the time. Pinterest would read these trends and match them to Boards for display on the front page, perhaps as defined by the viewer.
Imagine you just completed an innovation program, but things went terribly wrong. So wrong, in fact, that the boss won’t allow anyone to use the term “innovation” in any context. You and your colleagues spent a lot of time, money, and effort only to realize that you did not get what was promised. What do you now? How do you reboot your innovation program?
Here are some tips:
1. Conduct a Post Mortem: Despite the pain, you should thoroughly examine the “dead body” to understand what happened. How did we get here? What stimulated the initiative? What were our assumptions going in? What changed? How did we identify potential consultants to work with? How did we vett them? How did we select one to work with? Did we have the right team in place? Were we using the right method?
2. Take Stock in the Positives: No effort is a total waste no matter how miserable. You should take the time to identify the positives. What did we gain out of the effort? What did we learn? What were we hoping to gain and didn’t? Is that gap still relevant? What did we take away that we can leverage? Did we get anything that can be leveraged in another part of the company?
3. Refresh the Palate: Members of your team paid dearly to be a part of their program. They suffered the opportunity cost of being away from their work. In return, give them a rest. Let them recharge and catch up. People need to flush the bad experience out of their system before considering the next one.
4. Create the Burning Platform: What is happening in your business over the next 12 to 18 months? Is it growing? Contracting? What changes do you anticipate in your competitive position? No industry is completely calm and stable, though some are more turbulent than others. You need to spot an inflection point in your business where technology, regulatory or other forces are looming. Then, you need to sound the alarm, create the burning platform, and gain alignment from your leaders to anticipate the problem with a new innovation initiative.
5. Propose a Pilot Program: Reduce the risk of a new innovation program by testing it first. A short, pilot program that addresses a specific product or service line helps you understand whether a new method is right for your company. Pilot programs help keep your costs in line, and they help you reduce resistance to adopting new methods.
6. Syndicate!: Initiate the next program with the support of other departments. Enroll other divisions to share the risks…and rewards…from the pilot. Ask peers to chip in part of the expense, even if it is a small amount. By “syndicating” support of the pilot program, you broaden the exposure to a successful outcome.
7. Emphasize Skill Building: To stay competitive, companies must include innovation in their competency models. A competency is a persistent pattern of behavior resulting from a cluster of knowledge, skills, abilities, and motivations. Competency models formalize that behavior and make it persistent. Use the pilot program as an opportunity to partner with your Human Resources colleagues to create an innovation competency model.
8. Create Lasting Support Systems: Not only must you reboot the innovation culture at your company, you must also create the support systems to make it stick. Can we continue to use a method without consultants going forward? Are there training aids and tools to help teach others? Can the pilot program be extended to a general training program? What is the retention rate one month out? Six months out? How many people could be trained within your current budget cycle? How do you continue to build innovation muscle?
Cartoon courtesy of Doug Savage at www.savagechickens.com
The Association to Advance Collegiate Schools of Business (AACSB) wants business schools to do more to support innovation. It wants schools to reinvent curricula to be more integrative and convene executive programs that create new ideas and networks. “Through outreach activities, such as business plan competitions, student consulting projects, and business incubators, business schools’ activities contribute directly to innovation in the communities they serve.”
One things schools can do to foster innovation is to create a student innovation club. These clubs create a sense of belonging, instill a sense of identity and purpose, and they extend learning beyond the traditional classroom. Innovation clubs are a great way for corporate practitioners, innovation consultants, and venture capitalists to get involved and tap into a source of innovation talent.
Here are some examples of innovation clubs from around the U.S.:
The AACSB emphasizes that “business schools do not and should not support innovation in the same ways; what each school does should depend on its context, mission, and other factors—which can differ significantly among schools.” It is clear that business schools should approach creating value at the “intersection of different perspectives and proactively advocate for their role in innovation.”
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