The Fallacy of The Next Big Thing

https://medium.com/@kumarmehta_16246/the-fallacy-of-the-next-big-thing-2db25e969f58

I thought this was pretty interesting.

Just want to announce that our next Org Growth class at Kellogg is scheduled for April 2 to the 6th. In case you were unaware, the class was extended for a full day which enabled us to add two additional, critical discussions-- how to most effectively build the new Capability Platform from acquisitions to alliances AND a more in depth discussion on on decision biases that are critical to understand in any process or endeavor. The ratings are through the roof for the program.

Every company is continually looking for the next big thing. I can’t count the number of times I have heard executives say something along the lines of “I want to know what’s going to be the next iPhone before it becomes the next iPhone.” Corporations are looking for someone to tell them what trends and products are going to be the big hits. Once they know what the next big thing is (ideally, before everyone else knows about it), they can invest early, create a dominant presence, and reap the rewards. Simple.
Unfortunately, it does not work that way. While my research on innovation has revealed some distinct factors necessary to create breakthrough offerings, it also highlighted some of the misconceptions and fallacies that impede corporations as they try to become more innovative. One of the prime misconceptions in the corporate world today is that companies must continually quest for the next big thing. 

There are three problems with looking for the next big thing. They are, in order, (1) next, (2) big, and (3) thing.
NextRarely do innovations and trends take the world by surprise. One of the consistent themes in the history of innovation is the concept of slow burn, or a slow evolution. Most industry trends are visible and provide clues about the next breakthrough. …Most innovations in history have had a slow evolution process. Things move slowly, but not because they have to; rather, it is because people often don’t see the value in what is being developed and don’t adopt the innovations…..In the technology industry, where I spent the majority of my career, the trends have always been clear. They were the PC, the Internet, mobile devices, the smartphone, and the cloud. Today the trends include AI, machine learning, and other developments. The innovators were the ones who rode these trends to create fantastic products that customers embraced. They created business models that produced gravity-defying profits, and ecosystems that built a generation of entry barriers. Microsoft did not create the first computer operating system. Google did not create the first search engine. Facebook did not create the first social platform. Apple did not create the first portable music player or the first smartphone. None of these trends were a secret; they were available to everyone to build societal value. None of these companies were first to market; instead they did it better or engaged their users in better ways..BigThe second fallacy of the continual search for the next big thing is “big.” Looking at the history of innovations, rarely does something become big right from the start, and rarely does the innovator know that what they are developing is going to change the world. Few world-changing innovations started with a view to change the world. Few billion-dollar businesses started with a view to earn a billion dollars. The one thing they had in common was that they altered customer experience through a unique approach and, in the process, created an immense amount of value for their users.As we know now, Google became big — very big. The “big” happened not by executing a plan to build a world-changing company but by providing a big improvement to the experience of users — a large experience delta, the difference between the current experience and the new one. The business model (based on advertising revenues) that created over half a trillion dollars of market value was not part of a grand plan, but as the company increased its value to society, society figured out a way to reward the company…..…In looking for the next billion-dollar opportunity, corporations spend countless hours doing strategic planning and modeling how their new initiatives will generate massive financial returns... .l. These plans rarely focus on customer experiences, because these are nebulous, or on products that inspire customers on a small scale, because although these small changes might add up to enormous changes for society as a whole, they don’t visibly move the corporate needle…..Worse yet, inspiring ideas and innovations that could be breakthroughs often get shoved aside (like the first digital camera developed at Kodak) because they don’t fit with the existing business model or have a billion-dollar plan…...So keep in mind that the big opportunity you are chasing may actually appear as something quite small. The key is to learn to recognize the opportunities that alter experiences and to understand and articulate how these customer experiences are transformed. Once you can do this, even at a small scale, the chances are high you’ll find the right opportunities that will evolve into the big game changers we are all looking for.ThingThe third flaw in the relentless search for the next big thing is the “thing.” My research has shown that there are two main problems with this. The first is that an innovation is often not a physical thing — a product. The second misleading aspect of “thing” is that the value of the innovation is often not in the thing that is being developed; the real value is in how an invention is supported — something I call the “thing behind the thing.” Let me explain both of these misconceptions.The thing is not a thing..…..companies have always enjoyed unparalleled success not by selling things but by providing value in other ways. Innovation can come in many forms, and even if you are a product company, it would be wise not to think about innovation as solely the creation of new products.
The thing behind the thingThe second issue with focusing on the thing is that the invention we think of as being the innovation is often not the main creation — it is something else. Sometimes, the key to the success of an innovation is an entire system of supporting developments. These supporting developments are the thing behind the thing, essential elements without which there wouldn’t be an innovation. For example, everybody thinks of the wheel as one of the greatest inventions of all time, enabling the first information and commerce highway in history. When you study the invention of the wheel, you learn that creating the wheel was the easy part; the hard part was connecting it to a stable platform. The true innovation was in the development of the axle, and it was the combination of the wheel and the axle that allowed the wheel to have a transformative effect on society. The axle was the thing behind the thing…..How to think about innovation in light of the next-big-thing fallacy…..Given the fallacies about the next big thing, your company should take a new approach when thinking about innovation. To start with, you need to have a deep-seated understanding of the trends in your business and of new developments that are being worked on within your own organization, other companies in your sector, and other sectors.. .…You will also need to experiment more and increase the number of new bets you make. Your rate of success will increase once you have a culture of innovation — when launching new offerings to customers is part of your company’s DNA. Not all the new bets will have breakthrough success, but if you get in the habit of launching offerings geared toward transforming customer experiences, the rate of innovation will increase.Finally, don’t think about new product introduction as the only way to innovate. Think about all the other forces that can make your product more successful. Think of the things behind the thing. Think of ancillary benefits that can provide insanely high customer value and make an existing product irresistible. .

10 Principles for Leading the Next Industrial Revolution

Tools and techniques to ensure your company will stand out in the new age of digitization. See also “A Guide to Leading the Next Industrial Revolution.”

by Norbert Schwieters and Bob Moritz

https://www.strategy-business.com/article/10-Principles-for-Leading-the-Next-Industrial-Revolution?gko=f73d3&utm_source=itw&utm_medium=20170824&utm_campaign=resp

Really, really important. Please go to the original article to gain the full impact.

It isn’t often that the broad infrastructure that underlies industrial civilization undergoes a dramatic transformation. But just such a change appears to be happening now. In a great wave of technological change, sensors are spreading through factories and warehouses, software is predicting the need for maintenance before a machine breaks down, power grids and loading docks are becoming intelligent, and custom-designed parts are being produced on demand. The leaders of the next industrial revolution are companies making advances in fields such as robotics, machine learning, digital fabrication (including 3D printing), the Industrial Internet, the Internet of Things (IoT), data analytics and blockchain (a system of decentralized, automated transaction verification). Because these technologies all reinforce the others’ impact, they are leading to a new level of proficiency, and to new types of opportunities and challenges for business and for society at large.

One key indicator is that conventional boundaries between industries are eroding. It’s getting harder to tell the difference between, say, a telecommunications company and an entertainment producer, or between a retail bank and a retail store. The relationships among suppliers, producers, and consumers are also blurring, more rapidly than many business decision makers are prepared for.

The foundation of business strategy has long been the classic value chain, which links together raw materials producers, manufacturers, distributors, and (in the end) consumers through a well-established commercial infrastructure characterized by a stable set of transactions. But the rise of digital technology enables individuals to connect outside the value chain and deliver more efficient, effective products and services. This will reduce the importance of economies of scale and conventional divisions of labor. Relationships among companies will be more fluid and the price and cost of goods and services more volatile than they are today. There is one certainty, however: Trustworthiness and a clear articulation of purpose, will become more important to business. An enterprise that is continually changing must balance that turbulence with purpose and trust, or people — including employees, suppliers, customers, and regulators — will not be able to make the full commitments that businesses need….

…The following 10 principles can help senior executives navigate the uncertainties of the next few years in a systematic and profitable way:

Building a marketing organization that drives growth today

By Raphael Buck, Biljana Cvetanovski, Alex Harper, and Björn Timelin

Technologies and customer expectations have changed faster than marketing organizations. Here’s how to fix that.

http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/building-a-marketing-organization-that-drives-growth-today?cid=other-eml-alt-mip-mck-oth-1708&hlkid=c73ee2f989694be6a752be639f3fc30d&hctky=2805824&hdpid=b7d68b3d-c9e3-47c8-bfbf-46c90f903cd9

I believe this is an  important area for your companies to truly understand. Although this article discusses B to C businesses, it also hold for B to B.

There have been five shifts that have redefined the modern marketing landscape:

FROM:

1.  Targeted campaigns to personalized consumer interactions, leveraging advanced analytics

2.  Sales primarily through bricks-and-mortar stores to a mix of online, offline, multichannel, and owned channels

3.  Mass advertising campaigns to always-on content publishing

4.  A long-term innovation funnel to rapid test-and-learn, with an emphasis on speed to market

5.  Marketing as a cost to marketing as an investment, with measurable ROI

Few marketing organizations are able to take full advantage of new digital and advanced analytic s tools that would enable them to be more agile, engaging, and effective. They are also missing out on growth. A recent McKinsey survey of executives found that 81 percent of high-growth companies outperformed in data and analytics.
 
But capturing that advantage requires a new way of working. Some 71 percent of high-growth companies in that same survey have adopted agile processes such as scrum, cross-functional collaboration, and co-located teams. Another report found that top-performing marketers were more likely than their peers to be part of a networked organization (51 percent vs. 18 percent) and met more frequently with other parts of the business to create and deliver customer experience journeys.
Extensive experience working with dozens of companies to improve their organizational models has shown that marketing organizations need to change in three ways. First, they need to shift their organizational model away from “boxes and lines” to a fluid ecosystem of internal and external partners. Second, they must scale agile ways of working. And third, they need to build out a set of supporting capabilities that can deliver great customer experiences:

Bran Ferren on the Art of Innovation

A celebrated proprietor of R&D ateliers explains how companies can cultivate the rare people who create miracles.
by Art Kleiner and Juliette Powell

http://www.strategy-business.com/article/00381?gko=6aa82

This is a GREAT article to read. The following excerpts are intended to stoke your intreest…

As we teach in class, innovation is taking something new and bringing to use. Invention, is bringing something new into being.: the iPhone — a communications-centric computer, designed in the form of a smartphone. There wasn’t a lot of new invention involved in it. Instead, it brought together inventions that already existed, that had evolved independently of one another. I was not an insider, but we all know what was involved. It required a high-resolution display, bright enough to read, and lithium batteries that could provide enough power in a small enough size. It needed thermal and chemically tempered glass, which Corning had developed. It needed a multi-touch touchscreen, which meant the appropriate capacitive conductive screen technology. It needed wireless digital networks — cellular telephony, Bluetooth, and Wi-Fi — but also the ability to surf the Internet. 

The iPhone and the Newton [Apple’s failed handheld device, released during the mid-1990s] essentially started with the same idea: a personal digital assistant. But the difference between them was profound, because the Newton existed without the Internet as we know it, and without voice and digital communications, and it was too big and heavy. A personal digital assistant that wasn’t networked was basically useless.
If you had shown them the iPhone 10 years ago and said, “This will be the future of how civilization works,” they would have said, “No, it won’t.” In fact, some companies looked at this space and elected not to pursue it. 

This is because their innovation process doesn’t give their leadership a context for thinking about profound innovation. In a conventional company, an innovation process is often a substitution for creativity and thoughtfulness. Companies have come to us and asked for something like “disruptive innovation.” It is fashionable and they’ve read about it; they don’t know why they need it, but they hope it will help. However, they are seldom prepared to embrace what’s necessary to actually do this. 

They tell their engineers to think outside the box, and the engineers dutifully respond by immediately designing a new box. They take the boxes they’ve already got, the products and processes already with them, and they usually make those boxes brighter, shinier, lighter, and more efficient. The result is usually more of the same with incremental improvement at best. The business leaders are obsessed with getting the right answer, but they’re not willing to put the energy into making sure they’re asking the right questions. 

A good innovation process establishes context. It sets up a dialogue among the most capable people you can attract. So, should you have a revelation, you can recognize it and say, “That’s it!”…. 

… the heart of [the art of leading a company] is the ability to identify an idea, conceptualize it, bring a team of people together, execute it in a way that’s effective, and course-correct as you go. According to Steve, the iPhone was originally a tablet project. Partway through the R&D process, he said, “Hmm, we can make a phone out of this.” After the launch, many people rewrote history and said that the purpose of the iPhone was to reinvent the future of telephony. 

Suppose you had been at Research in Motion (RIM) — the creator of the BlackBerry — at that time, thinking about inventing the future of telephony, with no holds barred. Suppose you conducted market research with your most expert BlackBerry users and asked them, “What do you crave in a phone?” You would tell them to assume no boundaries or constraints, to just ask for something so great it would change their world.
What devoted BlackBerry user would have said, “Get rid of all the keys. Give me a screen three times as big, and it needs to be multimedia capable. I really need a music and video player, and multi-touch would be nice. I’d like one-third the battery life, and make sure that battery isn’t interchangeable, so when I run out of power, I can’t put in a new battery. Make it really thin, because I really care about thinness. And please give me apps (whatever they are), and I really need an online store where I can go buy those apps.”

For Biggest Results, Focus On The Struggle
SEPTEMBER 19, 2015 / CARTERANDDAVID

This is from a piece Co-Authored by David Schonthal and Bob Moesta, CEO of the Rewired Group (Originally published as a contribution Dave Kerpen’s column Inc Magazine)

http://thebestnextthing.com/2015/09/19/for-biggest-results-focus-on-the-struggle/


Pretty nice thought process..read the full article

Successful innovative products and technologies start by focusing on the consumers’ problems to be solved. What do consumers really want to do? What are they trying to do but cannot? What are the trade offs they are willing to make to achieve better outcomes? 

The solutions target consumers’ functional, social, and emotional needs and, even more important, their desired outcomes. Think Maslow’s Hierarchy, with its tiers of psychological, safety, love, esteem, and self-actualization needs. The further a product‘s benefits extend up that pyramid the better chance the company will tap into massive pent-up consumer demand for innovation… 

…..The key is to frame the forces of progress (function, social, and emotional) that cause people to make progress in their lives. As the “Forces Diagram” (below) illustrates, the push of the situation and the pull of a new idea are weighed against the habit of current practice and the anxiety of adopting a new solution. Progress only happened when the push and pull are greater than the anxiety and habit.