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Consumer Driven Innovation

Published date: July 27, 2015 в 3:00 am

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Innovation is all about creating products and services that make your company more competitive in the marketplace. Those actions typically include generating ideas, creating prototypes, building the business case, and getting alignment to launch. Marketers must develop a strategy to know where to focus their resources. They must segment, target, and position the offering. Finally, they have to execute their plan by developing a coordinated set of marketing tactics including what products and services to offer, pricing, distribution approaches, and marketing communications.
There’s a lot at stake. If you get it wrong, you might be wasting a lot of money that could have been spent on other things. Even worse, you could lose valuable revenues and the profits that go along with those revenues. Long term, you might start losing customer loyalty. As you can see, you’ve got to get this right, right from the start.
One very important way to sharpen the focus of your marketing initiatives is to apply the principles and concepts of consumer behavior – how people think, decide, and act when buying things. When you embrace consumer behavior, you’re putting the customer at the center of all your marketing activities.
Here’s an example. Consumers often buy products and services that help shape the image they have of themselves. If you understand that phenomena and develop your programs to help the customer associate your product with their self-image, you’ll be more successful.
The study of consumer behavior doesn’t apply to just individual consumers like you and me. In business-to-business industries, companies buy products too. If you’re in a B2B company, you’ll need well-thought out marketing programs to reach through to these more difficult clients.
Organizations are made up of people, and guess what? The concepts of consumer behavior apply to them too. Understanding consumer behavior will sharpen your B2B marketing campaigns and make them more effective.
Think of marketing as entire spectrum of activities and decisions. It starts with strategies on how to acquire and retain customers, followed by segmenting, targeting, and positioning your offering, and then implementing the right products, at the right price, through the right channels, and promoted with the right marketing message. You can improve what you do at every point along this spectrum by applying the principles of consumer behavior.
The best marketers are those that have the customer’s interest at heart when creating new products and services, and a solid understanding of consumer behavior can help you just that.

Innovating Out of Crisis

Published date: July 20, 2015 в 10:04 am

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In Innovating Out of Crisis, How Fujifilm Survived (and Thrived) As Its Core Business Was Vanishing, published by Stone Bridge Press, Berkeley, California, Shigetaka Komori, FUJIFILM Holdings Corporation Chairman and CEO, recounts how he was inspired to lead Fujifilm’s journey from the brink of extinction to its current path of prosperity and growth – and a new direction.
In its recent fiscal year ending March 31, 2015, FUJIFILM Holdings Corporation reported a record profit, in spite of the loss of its core business several years ago, brought on by a rapid increase in the digitalization of photography as well as the world financial crisis in 2008. In the year 2000, photographic products made up sixty percent of Fujifilm’s sales and two–thirds of its profit.  Within ten years, however, the booming market for digital photography destroyed that business. In the midst of this, Mr. Komori guided the company through an historic transition from being a traditional photographic company into a leading global innovator.
In his book, Mr. Komori states, “The company’s core photographic film market was shrinking at a spectacular rate, and the situation was critical. Fujifilm had good management resources, first-rate technology, a sound financial footing, a reputable brand, and excellence in its diverse workforce. If all these assets could be effectively combined into a successful strategy and applied, I was sure that something could be done to save the day. The whole of Fujifilm was depending on my managerial skills to make it happen.  I was gripped by a strong sense of mission. ‘Maybe I was brought into this world to overcome this crisis,’ I thought at the time. The hair stood up on the back of my neck.”
Fujifilm is now a leading global company with business interests in a variety of industries, including:  healthcare, highly functional materials, document solutions, digital imaging, optical devices and graphic systems.  The company has been applying its unique core fundamental technologies, resulting from 80 years of research and development that began with the design and production of fine, quality photographic products.
In 2015, Fujifilm will celebrate 50 years in the United States.
Innovating Out of Crisis is now available through Amazon.com and BarnesandNoble.com, in both hard copy and e-book.

Innovate to Reduce Your Customer’s Risk

Published date: July 6, 2015 в 12:21 pm

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Do you remember a time when you were just about to buy something, but at the last minute, you stopped and said, “No, I don’t think I’ll buy this.” So what stopped you? It was most likely because you were worried about something. There was too much risk around the purchase, so you walked away. Guess what? You’re just like every other consumer out there. Being a consumer is risky business.
As an innovator, you have to understand the risks and uncertainties faced by your customers, and figure out innovative ways to lower that risk. The lower the risk to consumers, the more likely they are to buy the product and less likely they are to complain about it afterwards.
Consumers face different types of risk. Financial risk is the risk of losing or wasting money on the deal. Physical risk is the risk of injury from using the wrong product or using a product incorrectly. Functional risk is the risk of buying a product that doesn’t work as expected or fill the need the way you wanted it to. And finally is psychological risk. This is the risk you face from feeling badly about the purchase, perhaps feeling guilty or even foolish.
When people face these risks, there’s two ways they think about it. First, they wonder about their downside risk, or what they stand to lose in buying the product. They also wonder about their upside risk, or what they stand to gain from buying the product. Research shows that potential losses loom larger than an equivalent gain. In other words, people do more to avoid losses than they do increasing their gains, and that is especially true as we get older. After all, people are betting the product will meet their needs, and they don’t want to lose out.
Now, consumers will do all they can to reduce these uncertainties, but things get in their way, sometimes making the shopping risk even worse. For example, you might be shopping online and find many competing products to the one you were interested in. Now you have choices to make, and that gets scary. Or perhaps you find information about the product that’s inconsistent with what you originally thought. Perhaps prices are changing so often that you don’t know the right time to buy.
So here are things you can do to help consumers deal with uncertainty. First, provide as much information about the product as you can. Make sure it’s where people can find it, in your stores, online, or with your salespeople.
Show comparisons between your product and the competition. Provide independent test data on how your product works. Give consumers access to knowledgeable and trustworthy experts. Share testimonials from other customers about their experience with the product.
Make it easy and convenient to shop for your products. Let them inspect and test your products before they buy it. If they’re worried about the product working or the price changing, give them a warranty or guarantee so they can return the product if it doesn’t work or if they find a lower price.
Now here’s a tip. Try to give your customers three choices of the product: a high priced/high functioning product, a low priced/low functioning option, and a middle option. Research shows people often select the middle option when they’re not sure what to buy. Without that option, they may walk away.
Trust me – customers want to buy from you. Good innovators make it as easy and risk-free as they possibly can.
 
Want to learn more about your customers? Visit Understanding Consumer Behavior.

The 2015 Breakthrough Innovation Report

Published date: June 29, 2015 в 3:00 am

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Nielson released its 2015 BREAKTHROUGH INNOVATION REPORT that features best practices from winning brands – with seven specific case studies from Pepsico, Kraft, MillerCoors, Kellogg’s, Nestle Purina, Atkins and L’Oreal Paris.
The report is based on a two year study examining over 3000 products launched in the US. It debunks conventional wisdom that new product success is random. Instead, it shows that success in new product innovation is repeatable and scalable when the science of innovation is applied.
Key findings:

  • American consumer sentiment toward new product innovation is relatively low in an environment that shows CPG innovation investment currently at an eight year high. With projections that show a real acceleration in the number of products that are being introduced into the marketplace in the next 12 – 24 months – (yet failure rate for new products stands at 85%)businesses need to primed for an uphill battle for consumer attention.
  • The efforts mapped out in this year’s case studies showcase proven methods to flip the odds from high failure to regular, repeatable and scalable success.
  • The application of a “Jobs Theory” yielded success for brands: from ultra-light kitty litter to hand held, healthy breakfast sandwiches…the innovative products named in this year’s Breakthrough Innovation Report highlights examples of innovation that not only help to re-define their category by also served a specific purpose or performed a “job” for consumers

The Nielsen Breakthrough Innovation Project has examined over 20,000 new product launches over the past four years. To date, only 74 products have been named a “Breakthrough Innovation Award Winner.” Twelve brands were awarded this year, with seven highlighted in this year’s report. Winners had to meet the following strict criteria:

  • RELEVANT: Achieved a minimum Sales of $50 million in Year 1
  • ENDURING: Sustained enduring success for 2 years (achieving in year two at least 90% of year one sales)
  • DISTINCT: Delivered a new value proposition to the market

This year’s winners are:

  1. Advanced Haircare, L’Oreal Paris
  2. Atkins Frozen Meals, Atkins Nutritionals
  3. Duracell Quantum, Procter & Gamble
  4. Lunchables Uploaded, Kraft Foods
  5. Monster Energy Ultra, Monster Energy Company
  6. Mountain Dew Kickstart, PepsiCo
  7. Müller Yogurt, Muller Quaker Dairy
  8. Redd’s Apple Ale, MillerCoors
  9. Special K Flatbread Breakfast Sandwich, Kellogg’s
  10. The Red Bull Editions, Red Bull
  11. Tidy Cats LightWeight, Nestlé Purina
  12. TOSTITOS Cantina Tortilla Chips and Salsa, Frito-Lay (PepsiCo)

Download the report at http://www.nielsen.com/breakthrough.

Innovation Training and More From LinkedIn

Published date: June 22, 2015 в 12:22 pm

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Learn innovation, group creativity, and much more at Lynda.com, a division of LinkedIn. Check out these courses with a 10 day free trial:
1. Business Innovation Fundamentals: Innovation propels companies forward. It’s an unlimited source of new growth and can give businesses a distinct competitive advantage. Learn how to innovate at your own business using Systematic Inventive Thinking, a method based on five techniques that allow you to innovate on demand. Topics include:

  •     What is innovation?
  •     Understanding the myths about creativity and barriers to innovation
  •     Understanding the characteristics of innovative products and services
  •     Using the five techniques of Systematic Inventive Thinking
  •     Creating new services and processes at work
  •     Running innovation workshops
  •     Involving customers in innovation
  •     Mastering innovative thinking

2. Understanding Consumer Behavior: Consumer behavior is all about the way people buy and use products and services. Understanding consumer behavior can help you be more effective at marketing, design, product development, and every other initiative that impacts your customers. You’ll learn how consumer behaviors such as motivation, appetite for risk, personality, attitude, and perception, as well as feedback from friends and family, impact buying decisions. It discusses how individual consumers as well as organizations buy products and services, and how you can connect with them after a purchase.
3. Managing Team Creativity: Do you ever think, “I’m just not that creative”? You’re not alone. But companies increasingly expect their employees to think about problems in new ways and devise unexpected solutions. The good news is that creativity is not a gift, but a skill that can be developed over time. Learn nine simple tips to boost your creative output at work and learn how to think about the world in a different way, break problems down into manageable parts, divide and conquer a problem, and evaluate ideas systematically.
4. Marketing Fundamentals: Whether you’re rebuilding your marketing program from the ground up or leading the first campaign of your career, this course will help you lay the foundation for a successful marketing endeavor. This course explains marketing’s role in an organization; provides frameworks for analyzing a business, its customers, and its competitors; and shows how to develop a successful marketing strategy and use that strategy to inform everything from pricing to promotion.
You’ll also learn to address tactical challenges and present the plan to get buy-in throughout an organization, from the C-suite to the sales team, as well as use the marketing plan to guide outside agencies and vendors. Finally, you’ll learn how to launch the campaign and measure its performance. Topics include:

  •     Marketing in an organization
  •     Assembling the team
  •     Creating the marketing plan
  •     Analyzing your products, customers, and market
  •     Segmenting customers
  •     Creating a value proposition
  •     Developing a strategy
  •     Setting goals
  •     Setting prices
  •     Using social media
  •     Presenting your plan to leadership

5. Improving Your Judgement: Want to make better decisions at work? In this short course, you’ll learn ways to confront your hardwired cognitive biases, in order to make good decisions and exercise more balanced, sound judgment. Topic include:

  • The base rate bias
  • The confirmation bias
  • The availability bias
  • The hindsight bias
  • The overconfidence bias
  • The sunk cost bias

6. Branding Fundamentals: Get a framework for branding, and learn how to develop and launch a brand and measure its success. This course explains how to define and position a brand and communicate the brand effectively internally, to employees, and externally, via social media, PR, advertising, packaging, and other channels. It explains how to measure brand performance in categories such as authenticity, relevance, differentiation, consistency, presence, and understanding. The course concludes with solid steps for periodically reviewing the brand and its effectiveness, especially when there are significant changes that could impact the brand. Topics include:

  •     Identifying your core values and drivers
  •     Linking your business model to the brand
  •     Identifying customers
  •     Developing your brand promise
  •     Expressing brand identity
  •     Creating a brand book
  •     Expressing brand in social channels, through advertising, and in packaging
  •     Measuring brand performance

7. Writing a Marketing Plan: A solid roadmap makes any marketing effort more successful. This course will help business professionals write and leverage great marketing plans. Learn how to assemble a team to create the plan, analyze an existing market, and break down the plan’s components into focused sections. It offers advice on how best to present and leverage the plan throughout an organization. Topics include:

  •     Planning for a marketing campaign
  •     Writing the situation analysis
  •     Writing the strategic, tactical, and budget sections of the plan
  •     Leveraging your plan

 

The Attribute Dependency Technique: Three Ways to Create Smart Products

Published date: June 15, 2015 в 11:03 am

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When using the Attribute Dependency technique, you’ll reach a point in the function follows form process where it’s time to make adaptations to your concept. That’s where you try to improve the concept and put more definition around it.
One way to make adaptations with Attribute Dependency is to change the type of dependency. There are three ways to do it: passive, active and automatic. Think of these as what has to happen within the product or service for the dependency to take place. Let’s look at each type.
Mixing bowlsPassive dependencies, just as the name implies, are passive. Nothing has to happen for the dependency to take place. There doesn’t need to be an intervening element to cause the dependency.
Look around and you will see that many products and services are examples of passive dependency. Here is a simple example of mixing bowls that come in different sizes.
Now you may ask, “Is this really an example of the attribute dependency pattern?” It certainly is. As one thing changes another thing changes. In this case, as the needs of the user change, the size of the bowl changes. It’s a passive dependency, though, because the bowls simply exist in various sizes and shapes. In fact, any product that comes in different sizes such as clothing, hardware items, even homes are examples of passive attribute dependency.
Happy hourBut some dependencies require an active, intervening element to cause them to occur.  A very simple example is Happy Hour, when the price of drinks in a bar is reduced. But for this to happen, somebody has to do something. That active element, of course, is the bartender. At the appointed happy hour, let’s say 5 o’clock, the bartender simply lowers the price of the drinks presumably for an hour. Then again at 6 o’clock, the bartender raises those prices back to their normal level. Because of the active intervention, we call this an active dependency.
And finally, we have automatic dependencies. These are unique because they happen, as the name implies, automatically. The product or service is designed so that as one thing changes, the product automatically changes by itself without some intervening third-party element to make that change.
Transition sunglasses are one of the best examples of an automatic dependency. As the brightness of the light changes, the lens automatically darkens in response to that change.
Products that have this type of dependency seem almost smart. They know when it’s appropriate to change in response to some other variable, either an internal or external. The consumer doesn’t have to do anything because the product does it all by itself.
How do you know which type of dependency to use? It depends on a lot of factors such as how much convenience you want to deliver to the customer. Is it technically feasible to create a particular dependency? For example, your engineers might be able to make a mixing bowl that automatically expands as you put more things in it. But that also adds a lot of cost and complexity. It’s probably a lot easier for the customer just to grab the right size bowl to make a cake.
It also depends on how much control you may need in a situation. Do you want the customer or another person making the change? Look back at the happy hour example. You could create a cash register that automatically adjusts the price of drinks based on the time of day. The bartender wouldn’t have to think about. You would have complete control over the prices throughout the day.
Passive, active, and automatic. That’s three ways to give your customers very cool products with the Attribute Dependency technique.
 

Listen, Watch, Ask, and Involve Your Customers

Published date: June 8, 2015 в 7:54 am

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When describing the SIT method, I sometimes say it’s like using the voice of the product. That’s because SIT is based on patterns that are embedded into the products and services you see around you. If products could talk to you, they would describe the five patterns of SIT.
But there’s another important voice in business innovation: the voice of the customer. After all, that’s why you do innovation – to create new value, directly or indirectly, for your customers. A good innovator understands their needs and wants.
One of the first things you should do is listen to what customers are saying about a particular product or brand. It’s especially important to hear what customers say to other customers. That’s when they’re the most truthful and objective, even when talking to complete strangers. If you had a way to eavesdrop on a conversation between two customers, you’ll get new insights about their attitudes.
A great way to do that is to use social media. Applications like Twitter and Facebook let you hear what’s being discussed, almost as if you were standing right there with them. It’s inexpensive and it’s easy.
When you listen to customers on social media, pay close attention to the specific words or phrases they use. What emotions do they express? What beliefs do they have about a product and how it works? Whether those beliefs are true or untrue, you need to know what they’re thinking so you can design your products accordingly.
Another way to learn about your customers is to watch them. Using field research, you go into the customer’s natural setting where they use the product or service. You observe their behaviors as they do routine, ordinary activities. If you watch carefully, you’ll see things they could never have described for you in words. They’re not even aware they are doing them.
By watching them, you might learn about a new step in how they use the product. That could affect how you use the Division Technique. Or, you might become aware of a new component in their Closed World, and that might affect how you apply the Task Unification technique. Pay close attention to who else is involved, what information are they using or not using, how they prepare the product for use, and perhaps how they store it or maintain it.
A third way to get customer insights is to ask them. You’re probably familiar with marketing research tools like surveys and focus groups as a way to collect voice of the customer data. But there are two simple techniques you always want to be able to use at a moment’s notice in case you engage a customer.
The first is to use open-ended questions. An example of an open-ended question is: “What’s most important to you when using this feature of our product?”  A closed-ended question would be: “Do you like this feature of our product?” The open-ended question encourages a full, meaningful response as opposed to a closed-ended question, which encourages a short or single-word answer. You’ll get deeper insights with open-ended questions.
The second technique when talking to customers is to use laddering. Laddering means asking a series of questions, one after another, but you base the next question on the answer you received from the last one. Like climbing the rungs of a ladder, you first ask about the functional aspects of your product, then ladder up to the values the customers sees in those features.
Finally, a great way to learn about your customer’s needs is to involve them in the innovation process. Once you’ve created the virtual product using one of the five SIT techniques, you ask two specific questions. The first is should we do it? Does the new configuration deliver some new benefit? Who would want this? I can’t think of anyone better to help you answer these than your customers. After all, they stand the most to gain by a new innovation. When they see something they like, they’ll tell you or they’ll tell you how to modify the concept to make it even better.
Customers might also have new insights about the second question: Can we do it? Do we have the know how or the right material or the right processes to make this? Are there barriers that might prevent us from making this? Your customers might have some critical insight or skills about how to remove barriers or make the concept more feasible.
Listen, watch, ask, and involve. The Voice of the Customer, used along with the SIT Method, will help you become a more effective innovator.

INNOVATE! – The App That Facilitates S.I.T.

Published date: June 1, 2015 в 7:11 am

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The Innovate! Inside the Box app for iPad facilitates the use of Systematic Inventive Thinking. It explains each of the five techniques and allows users to generate creative ideas and innovations on demand.
To Use the App:
Go to How to Use the App on the Homepage to read about Systematic Inventive Thinking.
You can review how each technique works by going to Learn a Technique.
Then, go to My Innospace and look at the sample project, Refrigerator, under Current Projects. Review the Ideas List for examples of ideas generated with each technique.
You may recognize some of these from this course.
App4Go to New Innospace and create a new project. Enter the Name of product or service you want to innovate. Enter a Description of the project and hit Enter.
Next, enter the Components and Attributes of the product or service.
Select one of the five techniques to apply to the new project. You can select a technique, or select the “I’m Feeling Lucky” option.
Then step through the two buttons shown here to read each of the Virtual Products that the app creates. Use Function Follows Form to identify potential innovations. Capture new ideas discovered.
App7Enter a name of the idea. Enter a description of the idea. List the benefits. Add notes if needed, then hit Done
You can share your ideas via email, Facebook, or Twitter.
Of course, it’s always a good idea to backup your projects by going to the More link.
The innovate app is a great way to help you stay organized when you’re applying Systematic Inventive Thinking.

The Creative Versatility of the Task Unification Technique

Published date: May 25, 2015 в 2:16 pm

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It’s hard for me not to play favorites when it comes to the five creativity techniques of the SIT method. After all, they’re just like children – each is unique with their own potential and personality. But when it comes to versatility, the one that may do it the best is Task Unification. It tends to produce ideas that are both clever and resourceful, often harnessing resources in the immediate vicinity of the problem in a unique. These ideas tend to make you slap your forehead and say, “Gee, why didn’t I think of that?”
Task Unification is defined as “assigning an additional job to an existing resource.” That resource could a component within the product or service, or something else nearby. Here are three very different examples, but each one clearly exhibits the Task Unification pattern.
The Aivvy Q is a pair of headphones that keeps your music within the unit itself. There’s no need to plug into an external player or smartphone. Here’s how it works:

The next is called Nerdalize. It works by taking heat from computer servers and using it to heat homes. Take a look at this short video.

And finally, here is Bioconcrete. It uses bacteria to heal itself in case it cracks. If that happens, the bacteria  germinate, multiply and feed on the lactate, and in doing so they combine the calcium with carbonate ions to form calcite, or limestone, which closes up the cracks. Take a look:

Now THAT is versatile!
Learn all five techniques at Lynda.com.
 
 
 
 

The Second Direction of Innovation

Published date: May 19, 2015 в 11:18 am

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Innovation is the process of taking an idea and putting it into practice. Creativity, on the other hand, is what you do in your head to generate the idea, an idea that meets three criteria: an innovative idea must be new, useful, and surprising. New means that no one else has done it before. Useful means that it delivers some new value for you or your customers. And surprising? It means that the market will be delighted with your latest innovation.
Most people think the way you create an idea is to start with a well-formed problem and then brainstorm a solution to it. What if you turned that around 180 degrees? It sounds counter-intuitive, but you really can innovate by starting with the solution and then work backwards to the problem.
In the Systematic Inventive Thinking method, we call it the Function Follows Form Principle. Here’s how it works. First, you start with an existing situation. That situation can be a product, it can be a service, or perhaps a process. You take that item, and you make a list of its components and attributes.
Then you apply one of the five thinking tools. They’re called subtraction, division, multiplication, task unification, and attribute dependency. I know some of these sound mathematical, but they’re really not, as you’ll see when you start applying them.
When you apply one of the five tools to the existing situation, you artificially change it. It morphs into something that, at first, might seem really weird or absurd. That’s perfectly normal. In fact, as you get more comfortable with this method, you’ll come to expect it. We consider the strange thing a virtual product. It doesn’t really exist except in one place, right up here in your mind.
This step is really important. Take your time. You have to mentally define and visualize the virtual product. I like to close my eyes and mentally see an image of the item once it’s been manipulated. As you practice the method more, this will get a lot easier.
At this stage, you ask yourself two questions, and you do it in this specific order. The first question is, “Should we do it?” Does this new configuration create any advantage or solve some problem? Is there a target audience who would find this beneficial? Does it deliver an unmet need? We call this step the market filter. It’s a filter because if you cannot identify even the tiniest benefit at this step, you throw the concept out the window. You don’t waste any more time on it. This is very different than other ideation techniques like brainstorming, where “there’s no bad idea.” Trust me, there are plenty of bad ideas, and if you realize one here, you eject it and go back and reapply the tool to generate a different concept.
If you do identify some benefit, then and only then do you ask yourself the second question, “Can we do it?” Do we have the technical know-how to make this concept? Is it feasible? Do we have the intellectual property? Are there regulatory or legal barriers? This step is the implementation filter because once again, if you have a great idea in theory but no way to make it, don’t waste any more time on it.
If you pass through both filters, you move on to the adaptation step, where you allow yourself some degree of freedom to modify the concept to make it even stronger and deliver even more value. You may have to iterate through these steps several times before you end up with what I would consider an idea.
To be a great innovator, you need to be a “two way” innovator. Learning the Function Follows Form process will help you do just that.

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