James McQuivey, of Forrester, explains tactics for uncovering potential for innovation within organizations. Originally presented at Delight 2014, Oct. 6-7, 2014. http://delight.us/conference

1. Digital Disruption: Delivering the
Next Thing your customer wants
James L. McQuivey, Ph.D.
Vice President, Principal Analyst
@jmcquivey
October 2014 | forrester.com/disruption

2. › Before we begin, let’s learn two things
about the power of digital…

3. Which of these organizations is bigger
than Facebook?
1. The Catholic Church
2. China
3. The United States
4. India
Answer:
Only China has more
“users” than Facebook,
at 1.357 billion
By 2015 Facebook will be the
biggest organization the world
has ever known

4. Approximately how much annual
revenue has the global music industry
lost since 2000?
1. $10 billion
2. $15 billion
3. $20 billion
4. $25 billion
Answer:
$22 billion
The global music industry
shipped $36.9 billion in recorded
music units in 2000, compared
to sell $15 billion in 2013,
according to the IFPI.

5. © 2013 Forrester Research, Inc. Reproduction Prohibited 5
Reminder: This is about economics, not
technology, not even about design
Old disruption Digital disruption
10xthe innovators
1/10ththe cost
100Xthe power
Source: October 27, 2011, “The Disruptor’s Handbook” Forrester report
These economics favor those who put the
customer in the center of the innovation process

6. CBSP puts the customer in the center:
We’ll use CBSP to generate customer-first innovation
› Introduce the “adjacent possibilities” and the CBSP method
› Provide examples of how it works
› Conduct a CBSP brainstorming exercise
You’ll get the most out of CBSP if
you use it often

7. © 2013 Forrester Research, Inc. Reproduction Prohibited 7
What does your customer need next?
BY INNOVATING THE ADJACENT POSSIBLE
?
Don’t build the future; build the next thing
people really need and let the future find you.

8. Disney: a big company gone disruptive
 Disney learned from Angry Birds
what people wanted next, creating
‘Where’s My Water?’
 This tests the waters for Disney in
apps and YouTube – both critical
fronts in the digital media future
 Importantly, it gave Disney the
chance to innovate adjacent
possibilities

9. Disney continues innovating the adjacent
possible

10. Jawbone creates the future one adjacent step at a
time
• Instead of seeing itself as a
mobile accessory maker,
Jawbone identifies as a mobile
lifestyle company
• This led to the creation of a new
category of mobile accessories:
the high-end mobile speaker
• Then: UP, a wearable mobile
health monitor
• In response to the Apple Watch
announcement, Jawbone will
release the software to work with
any device

11. Forrester’s CBSP method guides you
C
B
S
P
Consumer
Start by understanding who you want to reach
Benefits
Then decide what benefits you want to provide to
them
Strategy
Specify what this will do for you, what outcome you
want
Product
Then develop the product that strategically delivers
the right benefits to the right consumers
In CBSP, we care about four things, in a very specific order, they are:

12. • This goes beyond mere demographics and other traditional
research measures, though it should obviously include those things
• It eventually has to capture a sense of who these people really are:
• What they want from life
• How they use your products and services (or others’ products) to get
more of what they want
• This works for existing customers as well as new target customers
C Consumer
Start by understanding who you want to reach

13. Connection Uniqueness
Consciously
Serve long-term
motivation
Threats Opportunities
Needs optimized to prepare us for
Comfort
(oxytocin,
serotonin)
Variety
(dopamine,
epinephrine)
Subconsciously
Serve short-term
motivation
Howneedsareexpressed
When you don’t understand your consumer, think of
their core needs

14. B Benefits
Then decide what benefits you want to provide to
them
To benefit from CBSP, you should focus on one major benefit at a time, even if
it means you will move to other benefits quickly
› If you understand your consumer properly, you will know what
benefits they derive from you
› However, you will be tempted to overload benefits: People have a
narrow ability to perceive and retain benefits
• No product experience is all the things its creators claim it is
• If you offer 10 benefits, users will not value them all, therefore it is best
to focus on one to begin with
› Then, as you expand, be sure to expand benefits in adjacent moves,
going in a direction that is consistent with the benefits they already
expect

15. SStrategy
Specify what this does for you
If you’re using CBSP for the first few times, focus most of your time and energy
on C and B, graduate to S and P only as you get confident in the first steps
• What strategic outcome do you want?
• It’s not only okay to want to make money, it’s imperative – we give
you permission to improve the financial fortunes of your company
• Make sure these statements are simple and measurable and
provide direct value for the company, for example:
1. We want to sign up x,000 people for this service
2. We want to extend minutes of engagement by x per day/week
3. We want to collect more data about our customers (so that we
can…)

16. P
Product
Then propose products (and services) that strategically
deliver the right benefits to the right consumers
Resist the temptation to think in products and services
until you have completed the CBS steps
 Companies often give in to technology decisions that should be
recast as product decisions: “Everyone’s making apps, we should,
too,” or “How can we get people to like us on Facebook?”
 At the CBSP stage, focus on innovations that help you reach
specific, measurable goals quickly and at low cost
– Example: Develop a single-purpose app as opposed to an all-
purpose app
 Be prepared to give up on sexy initiatives if they don’t perform

17. Examples, then a brainstorm
› As you think through the examples and engage in your
own CBSP exercise:
• Discipline yourself to define C narrowly
• Prioritize among B options; pick the most important one first
• Fearlessly identify and insist on a productive S
• Resist the temptation to jump to P
› In our experience, CBSP becomes a mental checklist
that quickly diagnoses product problems and moves you
past them by clarifying the goal

18. Disney: a big company gone disruptive
 Disney learned from Angry Birds
what people wanted next, creating
‘Where’s My Water?’
 This tests the waters for Disney in
apps and YouTube – both critical
fronts in the digital media future
 Importantly, it gave Disney the
chance to innovate adjacent
possibilities
C: Casual gamers invested in Angry Birds
B: Variety in intuitive mobile game
experiences
S: Use Disney assets to cheaply enter
market
P: Mobile games, YouTube, …

19. Jawbone creates the future one adjacent step at a
time
• Instead of seeing itself as a
mobile accessory maker,
Jawbone identifies as a mobile
lifestyle company
• This led to the creation of a new
category of mobile accessories:
the high-end mobile speaker
• Then: UP, a wearable mobile
health monitor
• In response to the Apple Watch
announcement, Jawbone will
release the software to work with
any device
C: Mobile lifestyle consumers
B: Mobility integrated into their lives
S: Expand product line to offer more
mobility
P: Jambox, UP, and whatever’s next

20. An hypothetical outcome from a CBSP workshop
› Consumer: Educated, affluent parents with infants and
toddlers; who also have an espresso machine
› Benefit: They want to be better parents than everyone
else, they want to do it with style, and with a high degree
of control
› Strategy: To create a digital customer relationship that
connects us to parents for their child raising hopes but
also allows cross-sell to other machines
› Product: Create a baby formula preparation machine
that is a fashionable appliance, just like an espresso
machine. Make it internet connected so that it collects
data about the child’s feeding patterns and gives parents
a digital feedback tool for seeing how good they are.
For an espresso machine maker

21. Welcome to BabyNes!

22. C
B
S
P
Consumer
Start by understanding who you want to reach
Benefits
Then decide what benefits you want to provide to
them
Strategy
Specify what this will do for you, what outcome do you
want
Product
Then develop the product experience that strategically
delivers the right benefits to the right consumers
In CBSP, we care about four things, in this order:

23. © 2013 Forrester Research, Inc. Reproduction Prohibited 23
What you’ll do at your table
1) Pick a moment in your customer’s
product experience, preferably a troubling one
2) Describe that Customer: What does he or she want from life?
What do they really need?
3) What Benefit does my customer need next? How does your
customer meet those needs today?
4) What Strategic outcome will this provide for you?
5) Describe the Product experience you would build to deliver
those benefits
If you are stuck between options, prioritize benefits and product
experiences based on:
• What is most needed
• What you can do most rapidly

24. Discussion
C
B
S
P
Consumer
Start by understanding who you want to reach
Benefits
Then decide what benefits you want to provide to
them
Strategy
Specify what this will do for you, what outcome do you
want
Product
Then develop the product experience that strategically
delivers the right benefits to the right consumers

25. What to do with this day-to-day
› See opportunities for rapid digital intervention around
you everywhere
› Consciously look for faster and cheaper ways to test
ways to improve your process and your product
› Think CBSP every day
• It doesn’t have to be a workshop
• Our happiest clients use it as a logjam-breaker
• When you adopt the language of CBSP you can
collaborate internally more quickly to generate innovation
Release the disruptor within yourself, your organization

26. Thank you
#digitaldisruption
forrester.com/disruption
James L. McQuivey, Ph.D.
VP, Principal Analyst
@jmcquivey