Wednesday, September 30, 2009

Trends to Watch

I thought these were some pretty cool trends that are clearly B2C in nature but I believe can be extrapolated to B2B situations as well:

"Reviewing is the New Advertising
There are many more research studies, findings, dissertations, and so on that confirms the same fact: reviewing is the new advertising. This shouldn’t come as a surprise: just as with other trends, what’s unfolding now is a ‘forever need’ among consumers, one that's now being satisfied in a superior and previously unattainable fashion. In this case, the need is for trusted advice and recommendations—for feeling in control, for knowing the facts, for avoiding mistakes and disappointments—in order to make that perfect purchase. Which has become even more pressing as choice-overload continues: never before was there so much to choose from, in mature consumer societies, and thus such a need for reviews.

INNOVATION JUBILATION (May 2009) “ There will never be a shortage of smart new ventures, brands, goods and services that deliver on consumers’ wants and needs. And if those wants and needs currently revolve around practicality, efficiency and responsibility, and less about traditional luxury, splurging and upgrading, then that’s what brands should deliver on……. As focused as we are on emerging consumer trends, we never tire of pointing out that trends are only good for one thing: inspiring you to innovate, to come up with new goods, services and experiences for (or even better, with) your customers….
• Innovation is not necessarily about people in white coats puttering about in R&D labs. In an experience economy (which we’re still in, recession or not), marketing innovation is equally important, and often trumps technical innovation.
• Furthermore, as consumers’ wants are sometimes frilly, new products and services can be, too. Really, innovation doesn’t have to be so earnest all the time! Have fun with it, too!
• Thirdly, doing or starting something new doesn't have to cost the world. Many of the innovations featured in this briefing thrive on nimbleness and creativity, not huge budgets.

SELLSUMERS: Whether it’s selling their insights to corporations, hawking their creative output to fellow consumers, or renting out unused assets, consumers will increasingly become SELLSUMERS, too. Made possible by the online revolution’s great democratization of demand and supply, and further fueled by a global recession that leaves consumers strapped for cash, the
SELLSUMERS phenomenon is yet another manifestation of the mega-trend that is 'consumer participation'.

ECO-BOUNTY refers to the numerous opportunities, both short and long term, for brands that participate in the epic quest for a sustainable society. Some of these opportunities exist despite the current recession, others are fueled by it, not in the least because of new rules and regulations. Downturn-obsessed brands who lose their eco-focus will find themselves left out in the cold when the global economy starts recovering."

NICHETRIBUTES, which is about the power of making products and services relevant by incorporating ‘attributes’ and features that cater to distinct (if not niche) consumer lifestyles and situations…. NICHETRIBUTES are attributes / features / additions to existing products, making them more practical for specific user groups, while at the same time signaling to those users that the brand 'gets it’, that it cares, and in some cases even pays tribute to their lifestyle. An interetsing example is sell winter gloves for those who use touch screen devices: Dots Gloves are knit gloves with metal dots on the fingertips that won’t scratch iPhones, iPods or other touch-screen phones or devices, while Etre Touchy gloves keep hands warm and dry while operating electronic gadgets by baring only the wearer's index finger and thumb. And how about the first hands-free cell phone glove for winter sports, the GX-1 by Swany?"

Saturday, September 26, 2009

Managing Through Uncertainty. Mastering New Realities: ADVERTISEMENT
November 9 – 10, 2009
James L. Allen Center
Kellogg School of Management
Evanston, IL

I have been associated with the Kellogg Innovation Network (KIN) for the past 5 years and this is one of the best sessions to date. The KIN is a group of companies that meet 3 to 5 times a year to discuss timely topics facilitated by a Kellogg team. The topic -- Managing Through Uncertainty. Mastering New Realities.—is one that I feel is essential in our new marketplace. I highly recommend you attend if you can. Contact Rob Wolcott at if interested. Note, there is limited space so inquire soon if interested.

Here is a summary of the session (Program fees are $1850 per participant)

"The world has changed dramatically in the past year. What is different? What remains the same? Managing for the next quarter or year isn’t enough anymore, yet the rate of change has accelerated globally. How can we manage through this uncertainty? Leaders like Jeff Scott, MD at LexisNexis and former CTO of Thomson Financial; Thomas P.M. Barnett, New York Times bestselling author and globally-recognized geopolitical strategist; Dr. Jack Groppel, founder of the Human Performance Institute; Dr. George Basile, Executive Director of the Decision Theater at ASU; and Kellogg Professor Jim Shein, a nationally-recognized expert in corporate turnaround management, will all be part of a powerful and, shall I say, ‘innovative’ program.

Join us for an active dialogue to become some of the best prepared executives in the world. Our Dialogues are limited to an intimate group of innovation leaders from global companies, some of our KIN Senior Fellows and a few other surprise guests. We won’t just listen to keynoters and panelists, we’ll engage with them in collaborative sessions.

Program Content

Jeffrey Scott, MD at Lexis Nexis and former CTO of Thomson Financial, led Thomson Financial through a radical transformation over seven years, crossing the dotcom crash and 9/11 in the process. Thomson emerged alongside Bloomberg as the world’s top players in their industry. He’s leading a similar process at Lexis Nexis. We have much to learn from his experience navigating through adversity to achieve a long-term vision.

Dr. Thomas P.M. Barnett, Senior Managing Director of Enterra Solutions, LLC, and New York Times bestselling author of The Pentagon’s New Map and Great Powers: America and the World after Bush, is one of the most sought after advisors to government and military leaders worldwide. He has advised the US Department of Defense at the highest levels under both Republican and Democratic administrations. We will hear his vision for the most critical geopolitical issues in the world over the next few years… and challenge ourselves to understand what these developments mean for leading our businesses.

Prior to the past year, few executives have faced the kind of adversity we’ve seen in global markets, though some executives have managed through radical corporate turnarounds. Kellogg School Professor James Shein, globally-recognized expert in corporate turnarounds and leader of the Kellogg School’s annual turnaround conference, will lead a panel of executives who have taken companies on the brink and brought them back to growth and profitability.

Dr. George Basile, Executive Director of the Decision Theater, Arizona State University, leads one of the most innovative programs dedicated to making decisions under conditions of significant uncertainty and complexity. Dr. Basile will explore business focused sustainability challenges as an issue area to share his program’s unique processes. We’ll see how other companies and government organizations have addressed critical challenges in unique and powerful ways.

A pioneer in maximizing human performance through management of health and
stamina, Dr. Jack Groppel will share with us techniques he employs with organizations from P&G and PepsiCo to the Pentagon and even the Kellogg School of Management. Johnson & Johnson was so impressed, they bought Groppel’s Human Performance Institute in December, 2008, as a cornerstone of the company’s Wellness & Prevention platform.

Wednesday, September 23, 2009

The Corporate Lab as Ringmaster
August 16, 2009

The concept of Open Innovation (see earlier postings at our blog site under the category IDEAS) is truly the wave of the future as this article implies. Importantly, this concept although pioneered by large companies can and will work equally well for smaller enterprises with more limited R&D budgets. In fact, I believe it is the only way for smaller companies to compete with the big guys if they do it right.

"THE Internet has changed many things, of course, but one of its more far-reaching effects has been to transform the economics of innovation.
The nation’s big corporate research and development laboratories — at I.B.M., General Electric, Hewlett-Packard and a handful of other companies — have their roots and rationale in the industrial era, when communication was costly, information traveled slowly and social networks were fostered at conferences and lunchrooms instead of over the Web.

Crowdsourcing and other new, more open models of innovation are really byproducts of the low-cost communication and new networks of collaboration made possible by the Internet.

So, in the Internet era, what is the continuing role and comparative advantage of the corporate R.& D. lab?

Its role will be smaller and its advantage diminished, suggests Michael Schrage, a research fellow at the Center for Digital Business at the Sloan School of Management at M.I.T. The idea-production process, according to Mr. Schrage, will continue to shift away from the centralized model epitomized by large corporate labs, going from “proprietary innovation to populist innovation.”
Much of traditional corporate R.& D. spending, he said, has been subsidized by profits that are increasingly under Internet-era pressures. “The economic case for a lot of in-house R.& D. no longer makes sense,” Mr. Schrage said.
The best bet for corporate R.& D. labs, he said, is to adopt a “federated” model that leverages all the innovative work by outsiders in universities, start-ups, business partners and government labs. The corporate lab’s role, then, is to be more of a coordinator and integrator of innovation, from both outside and inside the company walls (
I believe this model is ideal for the smaller company with more limited R&D budgets)

Though hardly alone, Hewlett-Packard has aggressively adopted that approach in the last two years, after Prith Banerjee became the senior vice president for research. Under Mr. Banerjee, former dean of engineering at the University of Illinois at Chicago, H.P. Labs has not only narrowed its focus, placing larger bets on fewer projects, but has also systematically sought outside ideas.
H.P. now runs a yearly online contest, soliciting grant proposals from universities worldwide. The company lists eight fields in which it is seeking advanced research, and scientists suggest research projects in those fields.

The H.P. grants are typically about $75,000 a year, and many of the collaborative projects are intended to last three years. In June, the company announced the 61 winners from 46 universities and 12 countries, including 31 projects receiving a second year of funding. “We are tapping the collective intelligence, selectively, of leading academics around the world,” Mr. Banerjee said……
…..Opening up is a good approach to some problems. But tight-knit teams inside corporate labs, experts say, can outshine the open model when working on multidisciplinary challenges in projects soon heading to market.
“You can’t leave discovery completely to others and to chance,”

A viable approach is to go outside to develop new concepts and then after using techniques such as Real Options management – see earlier postings under the category head PROCESS BEING AMBIDEXTROUS for descriptions) --test and develop/reject them internally.

Wednesday, September 16, 2009

Welcoming the New, Improving the Old
NYT, Sept 6, 2009

An important theme we developed over our blog’s history is the importance for companies to be “ambidextrous”—using multiple processes to achieve business success (see our blog site --
- -for a grouping of earlier postings on this subject under the PROCESS-BEING AMBIDEXTROUS category). The focus has been the proper deployment of processes like 6 Sigma and innovative process like the one discussed below. It is my experience that companies tend to latch on to one process (usually 6 Sigma) with a religious fervor trying to adapt it to all situations.

“For decades, companies from Cisco Systems to Staples to Bank of America have worked to embed the basic techniques of Six Sigma, the business approach that relies on measurement and analysis to make operations as efficient as possible.
More recently, in the last 5 to 10 years, they have been told they must master a new set of skills known as “design thinking.” Aiming to help companies innovate, design thinking starts with an intense focus on understanding real problems customers face in their day-to-day lives — often using techniques
derived from ethnographers
(study customers vs. just asking what they want)— and then entertains a range of possible solutions.

To many, the two skill sets don’t fit together well, and Chuck Jones, vice president for global consumer design at Whirlpool, explains why that may be so. Design thinkers, he says, are like quantum physicists, able to consider a world in which anything — like traveling at the speed of light — is theoretically possible. But a majority of people, including the Six Sigma advocates in most corporations, think more like Newtonian physicists — focused on measurement along three well-defined dimensions.
(This is one of the best comparisons I have seen!!)……..

…..To survive, many businesses will have to figure out how to incorporate both approaches. Design thinking offers tools for exploring new markets and opportunities; Six Sigma skills can be applied to improve existing products. Companies that adhere strictly to one or the other risk failure. “The practices that make for success at one time can trap firms and contribute to their downfall at a later time,” says Bob Cole…….

……..the Six Sigma process starts with an assumption about what is good…..Design thinking, meanwhile, inquires as to what is good…..

The different world views, however, can be brought together.
Progressive Insurance has also turned design and Six Sigma techniques into reasonably comfortable bedfellows. In the early 1990s, it started emphasizing showing up at an accident scene and handling situations in real time, according to a 2004 article by Michael Hammer in The Harvard Business Review. That move reflected a designer’s way of thinking about customer needs, but the company was able to execute the idea through its ability to measure, analyze and improve its processes.

Both worlds — the quantum one where designers push boundaries to surprise and delight, and the Newtonian one where workers meet deadlines and margins — are meaningful. The most successful companies will learn to build bridges between them and leverage them both. "

Wednesday, September 09, 2009

Breakthrough Thinking from Inside the Box
HBR, December 2007 Reprint: R0712E

Whenever we teach or consult on growth, one key aspect is expanding the addressable marketspace of your business to afford room to grow. The classic example is Coke defining their addressable marketspace as all consumed liquids vs. just carbonated beverages. One requirement we place on our clients is that you must stretch yourself sufficiently out of your current box such that you will need new capabilities to compete in the expanded space. The following is the visual we use to depict the logic of capturing a greater share of the consumer dollar,wallet (The Profit Zone, Slywotzky) in the space you want to participate in:

We try to encourage businesses to go from the “brown box” to the “green” one.

However, a key larning fo me afte reding his article is that there maybe sufficient growth potential in the "brown box". There was a great article in HBR on that issue, entitled “Breakthrough Thinking from Inside the Box”. The type of questions asked are:

“De-average” buyers and users
Which customers use or purchase our product in the most unusual way?
Do any customers need vastly more or less sales and service attention than most?
For which customers are the support costs (order entry, tracking, customer-specific design) either unusually high or unusually low?
Could we still meet the needs of a significant subset of customers if we stripped 25% of the hard or soft costs out of our product?
Who spends at least 50% of what our product costs to adapt it to their specific needs?
Explore unexpected successes
Who uses our product in ways we never expected or intended?
Who uses our product in surprisingly large quantities?

Look beyond the boundaries of our business
Who else is dealing with the same generic problem as we are but for an entirely different reason? How have they addressed it?
What major breakthroughs in efficiency or effectiveness have we made in our business that could be applied in another industry?
What information about customers and product use is created as a by-product of our business that could be the key to radically improving the economics of another business?

Examine binding constraints
What is the biggest hassle of purchasing or using our product?
What are some examples of ad hoc modifications that customers have made to our product?
For which current customers is our product least suited?
For what particular usage occasions is our product least suited?
Which customers does the industry prefer not to serve, and why?
Which customers could be major users, if only we could remove one specific barrier we’ve never previously considered?

Revisit the premises underlying our products and processes
Which technologies embedded in our product have changed the most since the product was last redesigned?
Which technologies underlying our production processes have changed the most since we last rebuilt our manufacturing and distribution systems?
Which customers’ needs are shifting most rapidly? What will they be in five years?"

I strongly suggest ordering the reprint for some great insights!