MOST INNOVATIONS DON’T WORK BECAUSE
THEY ARE MADE WITH THE COMPANY IN MIND - AND THEY GO ON TO BE LAUNCHED INTO A MARKET THAT IS NEITHER INTERESTED OR FINDS IT MEANINGFUL. ADVERTISING AND DESIGN IS THEN ADDED IN ORDER TO CAPTURE PEOPLES MOTIVATION AND IMAGINATION. BUT WHY ARE WE DOING IT THIS WAY ROUND? WHY DON’T WE TURN THE PROCESS ON ITS HEAD AND START BY FIGURING OUT WHAT PEOPLE FIND MEANINGFUL IN THE FIRST PLACE.
I HAVE ATTENDED A MULTITUDE
OF CONFERENCE AND WORKSHOPS, WHERE BRILLIANT PEOPLE TALK ABOUT THE FUTURE AND HOW TO INVENT IT. BUT QUITE CONSISTANTLY ONE FACTOR IS ALWAYS LEFT OUT - THE CUSTOMER. THE TALK IS ABOUT HOW TO THINK, CREATE AND SOLVE PROBLEMS - NOT TO LEARN OR BE HUMBLE TOWARDS THE PEOPLE WHO YOU ACTUALLY DEPEND UPON TO GET YOUR BUSINESS TO WORK.
IMAGE BY VANCOUVER FILM SCHOOL
ON FLICKR.COM POST-IT’S ARE GREAT FOR SMART PEOPLE IN SMART ROOMS COMING UP WITH SMART IDEAS - THAT PEOPLE DON’T CARE ABOUT
9 3 THESE PEOPLE TRIED
TO UNDERSTAND COMPANIES AND FOUND THAT THEY COMPRISE OF NINE FUNDAMENTAL ELEMENTS - TRYING TO UNDERSTAND CUSTOMERS THEY CAME UP WITH THREE.
AS VALUE BECOMES MORE ILLUSIVE
IN THESE PERIODS [WHEN CUSTOMERS ARE CHANGING FASTER THAN ORGANIZATIONS] AND THE CHASM GROWS, ORGANIZATIONS TURN TO INNOVATION TO TRY AND GET THAT CURVE TO LIFT OF AGAIN. INNOVATION FUNCTIONS AS A PARADIGM EXTENSION. CAPITALISM IN THE AGE OF THE INDIVIDUAL SHOSHANA ZUBOFF EARLY CONSUMERS ZONE OF INNOVATION PROPRIETARY CAPITALISM MASS CONSUMERS ZONE OF MUTATION ZONE OF INNOVATION MANAGERIAL CAPITALISM MIGRATION PATH NEW SOCIETY OF INDIVIDUALS ZONE OF MUTATION DISTRIBUTED CAPITALISM WE ARE NOW IN A MIGRATION PATH TO A NEW PARADIGM: DISTRIBUTED CAPITALISM / CUSTOMER CAPITALISM / NEW SOCIETY OF INDIVIDUALS. INNOVATION TRIES TO KEEP THE CUSTOMERS IN THE OLD PARADIGM - NOT MOVE THE COMPANY ONWARDS TO THE NEXT.
“DELIGHTING THE CUSTOMER THROUGH OUTSIDE-IN
INNOVATION IS NOT JUST PROFITABLE. IT’S HUGELY PROFITABLE. THAT’S ULTIMATELY WHY IT HAS BECOME A BUSINESS IMPERATIVE. It explains why its conquest of the business world is inevitable. It’s not because the customers are more contented or because the people doing the work are happier or because it extends the life expectancy of a ﬁrm, generates jobs and fuels the growth of the economy. It does all those things, but the real driver of its inevitability is that it makes more money.” STEVE DENNING - FORBES.COM http://www.forbes.com/sites/stevedenning/2011/04/01/is-delighting-the-customer-proﬁtable/ Just look at the ten-year share price of exemplar ﬁrms like Apple [APPL], Amazon [AMZN] and Salesforce.com [CRM], with increases of around ten times to ﬁfteen times. Compare that to traditional stalwarts like GE [GE], Walmart [WMT] and Intel [INTC], which struggle even to hold their share price constant.
WE ARE DOING THINGS THE
WAY WE ARE BECAUSE PEOPLE - NO SMARTER THAN US - SAID IT SHOULD BE SO. AND NOT ONLY CAN WE CHANGE IT, WE HAVE TO CHANGE IT - IF WE ARE TO KEEP UP WITH OUR CUSTOMERS
Our ﬁrst shareholder letter, in
1997, was entitled, "It's all about the long term". If everything you do needs to work on a three-year time horizon, then you're competing against a lot of people. But if you're willing to invest on a seven-year time horizon, you're now competing against a fraction of those people, because very few companies are willing to do that. And just by lengthening the time horizon, you can engage in endeavours that you could never otherwise pursue. At Amazon we like things to work in ﬁve to seven years. We're willing to plant seeds, let them grow. We say we're stubborn on vision and ﬂexible on details. In some cases, things are inevitable. Ebooks had to happen. Infrastructure web services had to happen. You can do these things with conviction if you are long-term-oriented and patient. - Jeff Bezos http://www.wired.co.uk/magazine/archive/2012/01/features/ceo-of-the-internet/page/2
IN 2004 CUSTOMERS CAME SIXTH
IN THE LIST OF MARKET FACTORS COMPANIES BELIEVED WOULD DRIVE THE MOST CHANGE FOR THEIR ORGANIZATION, IN 2013 CUSTOMERS ARE LEADING THE AGENDA. AND COMPANIES ARE ALREADY CHANGING THEIR FOCUS. IN 2004 CUSTOMERS CAME SIXTH WHEN C-LEVEL EXECS WHERE ASKED TO RANK STRATEGIC IMPORTANCE, IN 2013 CUSTOMERS CAME SECOND ONLY TO THE C-SUITE THEMSELVES.
SUCCESSFUL INNOVATION IS A MINDSET
BEFORE IT’S A PROCESS OR OUTCOME. IT’S CHARACTERIZED BY A DOGGED DETERMINATION TO SEE THE WORLD THROUGH YOUR CUSTOMERS’ EYES. THAT MINDSET DRIVES ALL THE LITTLE DETAILS AND DECISIONS THAT CAN’T BE CAPTURED IN A PROCESS. 2.
Focusing on innovating — as
a worthy goal unto itself — tends to be born from self-centered motives: We need to protect ourselves from competitive forces. We need to ensure we have a growth engine. We need to keep up with other companies. To do all these things, we need to innovate. This is often a CYA perspective coming from an executive suite looking to protect its turf. It isn’t inherently bad. It’s just that this focus tends to create a culture where customers are on the sidelines, not in the center of the dialogue. By contrast, focusing on solving interesting and important problems tends to be born from customer-centered motives: What’s going on with this set of customers? Where are they ecstatic? Where are they upset? Where do they feel good? Where do they hurt? How can we better serve them? These types of questions pull customer problems front-and-center and create a culture where that’s expected. And since people naturally want to solve problems, it pulls for innovation. INNOVATE CREATE CONSUMER OPPORTUNITIES
“The best way to predict
the future is to create it.” - PETER DRUCKER - WRONG? FOCUSING ON CREATING THE FUTURE REMOVES THE FOCUS FROM WHAT’S IMPORTANT - FINDING THE BEST WAYS TO DELIGHT CUSTOMERS
THE STUDY FINDS THAT MARKET
DRIVEN CHANGES HAVE A HIGHER SUCCESS RATE THAN THOSE DRIVEN BY TECHNOLOGY. SOURCE: Sidesprang ga suksess, DN, 19.april.2014 - Alte Midttun, Nils-Otto Ørjasæter og Henning Thorsen GOVERNMENT OWNED INNOVATION NORWAY - FINANCING AND SUPPORTING PROJECTS, INNOVATIONS AND ENTREPRENEURS HAS SEEN THAT PROJECTS ACCOMMODATING SHIFTS IN MARKET DRIVEN CHANGES ARE EXPERIENCING INCREASED SUCCESS RATES COMPARED TO PROJECTS SHIFTING TO TECHNOLOGICAL OPPORTUNITIES.