The Seeds of Innovation

AMACOM Books

Chapter One

Wayne Gretsky was an exceptional hockey player because he anticipated the future and "skated to where the puck was going." Other less-talented players waste energy trying to catch up to the puck as it is passed from player to player. The same phenomenon appears in many organizations. While a few are looking up and planning for the future health of the organization, many are looking down, cutting costs and managing the day-to-day business. This short-term focus intensifies when people face what they perceive to be "tough times."

Now is the time to invest in building a stronger future, full of hope and exciting new ideas. Looking to the future and identifying strategic new ideas is particularly essential for those countries and organizations that are not blessed with rich resources or low cost structures.

Everyone can benefit from looking beyond what they are doing today to anticipate the future and to develop ideas that will bring stronger results. Some people, of course, do not believe the future can be anticipated. They feel the world is much too random for the making of accurate predictions about the future and that one cannot simply extrapolate the current situation to project an image of the future. While random events can certainly change the course of history, we should not ignore those faint blips on the radar screen that could indicate what the future might hold. For example, there are clear signs that the aging population will require more health care, that fresh water resources are running low, that the mobile phone Internet (m-commerce) era is upon us, that the global economy will flourish, that there will be computer chips in everything, that organizations will employ more and more technology in the pursuit of efficiency and strength in the marketplace, and that there will be more diverse work styles in the future. We should not ignore these signs. The general direction of the marketplace can be predicted based on what is happening today.

In order to master "looking to the future," one must develop strong imaginative skills. For some, the concept of imagination is associated only with fictional works such as the recent best-selling Harry Potter series. This view is too limiting. Imagination is indeed an important component of strategic thinking. When combined with a strong innovation-planning process like the Nine-Step Innovation Process, imagination can make the difference between mediocrity and success.

The Nine-Step Innovation Process

The Nine-Step Innovation Process was introduced at the beginning of this book. Unlike other innovation-planning processes that begin with an idea-generation phase, this process is different because it recognizes the need to fully understand the challenge early on in the process. As such, it begins by recommending a thorough understanding of the current situation or challenge, and a discussion of the Innovation Goalposts and BIG-Picture criteria before any idea generation takes place. These steps, which have been covered in previous chapters, comprise the first stage of the process, Understanding.

This chapter focuses on the second stage of the process. This stage, Imagination, involves gathering as many stimuli as possible, in order to maximize the probability of making new connections. With these stimuli and an active imagination, participants are able to uncover new insights. From these insights, new ideas can be identified. The three specific steps in this Imagination stage are: 4) seeking stimuli, 5) uncovering insights and 6) identifying ideas.

The third stage, Action, involves building the ideas into full business concepts and then into business plans. This stage is covered in Chapter 9. Again, a diagram of the complete Nine-Step Innovation Process can be seen in Appendix A.

Focusing on the Imagination Stage

Let's focus on the steps in the imagination stage: seeking stimuli, uncovering insights, and identifying ideas.

Seeking Stimuli

"Innovation can be systematically managed if one knows where and how to look" Innovators are those people who can zoom out to see a broader view of the world and see new ideas registering on their Innovation Radar Screens before others even know they exist. They stay aware of what is happening behind, in front of, and beside them, knowing that insights can come from any source. Their research antennae are at full mast, looking for signs in the global world of what may be useful in the future.

Relying on only one source of information is like going fishing in a large pond and sitting in only one spot all day, hoping the fish will come to you. What is needed is a bigger hook and movement around the pond. Fish in a larger area than you are accustomed to so that you can see emerging customer needs, technological developments, and trends in the marketplace that could represent new possibilities. Once you have had a look at the information that is available inside your organization, go farther out into the marketplace to discover deeper insights, using techniques such as direct interviews with customers, observation, lead-user research, and benchmarking excellence in other organizations.

Consider the following sources for "seeking stimuli to plan for future events":

* Analyzing the current state of your business. In order to have a strong knowledge base on which to make future decisions, it is important to research the current state of your business. Consider looking at trended sales information: by geographic region to see which regions are strong or weak, by distribution channel to see which channel is most or least beneficial to the business, by month of the year to see when the business is strong or weak, by customer group to see which groups are most and least important, and by product line to see which line is strong or weak. Compare this information with that of the overall market or industry to see where your particular business is leading or following the market. Look at your revenue, cost, and profit numbers for the last few years to see what activities were or were not effective. Once you have analyzed this information, you can decide whether to build on the business' strengths or allocate resources to address the weaknesses. This decision, of course, must be made in view of the overall trends in the marketplace and emerging customer needs.

* Analyzing current customer needs using the focus-group research method. A common approach to gaining insight into customer needs is the focus-group research method. Six to ten people are asked to participate in a round-table discussion in a specially designed room, which is outfitted with a two-way mirror. The client or those interested in hearing the customer feedback sit behind the two-way mirror in a separate room while the participants and moderators are in the main room. The focus-group session usually lasts for two hours, during which the moderator leads the participants through a series of preplanned questions that are designed to tap into their attitudes regarding the chosen subject, product, or service.

Many people use the focus-group research method because they have relied on its use for many years. However, there are several flaws with this method: (a) the artificial setting, (b) the presence of strangers, (c) the lack of time to really probe in-depth attitudes, (d) the lack of real stimuli (opinions are given without the benefit of stimuli such as competitive products and service examples), (e) the assumption that the participants' comments reflect their actual behavior, and (f) the lack of follow-up (any comments or insights the participants may have following the session are lost). Be wary of some focus-group moderators who maintain that their groups are unique because they restrict the number of participants or include creative-thinking exercises. In my opinion, the only difference is that the invoice is higher; the flaws of this technique still remain.

Because of these flaws, the focus-group research method should be restricted to gaining quick insight into what already exists in today's world. Also be aware that you are relying on a group of only six to ten participants to tell you whether your ideas are strong or weak!

* Analyzing current and future customer needs using direct-observation methods. Direct observation is a more powerful method of researching customer needs than are focus groups. By going to the source - observing customers - researchers can gain a deeper understanding of customers' true attitudes and behaviors. For example, by watching how customers complete their banking forms, how consumers wash their cars, or how people prepare home-cooked meals, researchers are able to truly see what works, what doesn't work, and what might work in the future.

Direct observation is a powerful method of gaining insight that can then be used to design future products and services. Some organizations have encouraged their customers to join specific online chat rooms. Researchers then observe their conversations to watch for new insights. Other organizations choose to observe the old-fashioned way - by watching how consumers actually behave. "Nissan designers were startled to see how many people were eating in trucks, not just drinks but whole spaghetti dinners." Intuit, the maker of the personal finance software package Quicken, used observation techniques in their recent "Follow Me Home Program." Product developers gained permission from first-time buyers to observe their initial experience with the software in their own homes. Intuit learned a great deal about its product, packaging, documentation, and installation from this exercise. Rowntree, the chocolate manufacturer now owned by Nestlé, discovered through observation that their customers liked to separate their candy-coated chocolates, which are similar to M&M's, by color. This observation led to their famous advertising jingle, "When you eat your Smarties, do you eat the red ones last?"

* Analyzing current and future customer needs using in-depth interviews. Consider interviewing your customers one-on-one to gain deeper insight. In order to research a customer's current and future needs, it is important to listen for what the customer says is a problem, hassle, or unmet need. In this regard, ask your customers to complete the following sentence: "I hate it when your product or service ___________________." Alternatively, ask them to complete this sentence: " I wish I had a product or service that could solve my need for ______________."

How can you or your team use direct observation and in-depth interviewing to find new insights for the future?

* Anticipating future customer needs using the lead-user research method. The lead-user concept was developed in a formal way by Eric von Hippel, a professor at MIT. The concept is a fairly simple one-gain insight into future needs and potential new products and services by learning from users who have already solved the problem in a unique way. Often these lead users have already developed prototypes or working models of their ideas that could be beneficial in future development work. A simple example of a lead user involves a dog owner who designed a washable cover for the back seat of the car, using Velcro strips to hold it in place. Since no cover was commercially available, the dog owner created her unique solution to address this unmet need. If car manufacturers were able to see this lead user in action, they could design a removable pet cover as an extra feature in their next car or SUV model. Another example of a lead-user group is young computer programmers who have already created new video games, who can be of benefit to software development companies who are looking for ideas for the next wave of video games.

Unfortunately, these lead users rarely show up in focus-group sessions. In order to locate such people, one must dedicate the energy and related resources to go out and find them. This is exactly what Dave Nichol and the Loblaws product development team did. They traveled around the world interviewing leading chefs and small food manufacturers in order to discover unique recipes and techniques for food preparation. Their ability to find these lead users enabled Loblaws to create one of the best retailer food programs in the world.

The lead-user concept has been applied successfully at 3M through its partnership with MIT. Other organizations have invited lead users who were experts in certain applications or who had knowledge of specific aspects of a project to assist them on development projects. Still other organizations have asked lead users to help them review their operations in anticipation of discovering new solutions that might have been missed. The cost of compensating lead users for their ideas is often small compared with the benefit of gaining quick access to unique ideas.

In our fast-paced world, it is beneficial to get in front of the development line by tapping into the expertise of lead users instead of asking for insights from mainstream customers whose preferences might lean toward ideas that have already been introduced into the market. How could your team benefit from using the lead-user research method?

* Researching existing solutions within your category. Expanding your research net a little wider to look at similar categories of products or services will provide additional food for thought. Somewhere, the seeds of the future have already been planted and may be starting to sprout. Find ideas that have already been introduced in one country and bring them to another country before anyone else thinks of doing so. A team of scientists and physicians might be doing research on a cure for a certain disease while another team halfway around the world has already found the cure. A product that is enjoying great sales in South America might just be entering the Chinese market but have yet to be introduced to the Australian market. This approach is not "stealing" since the ideas are already in the marketplace and are no longer "company secrets." Be careful, of course, to respect other organizations' trademarks, copyrights, and patents.

The future may have already happened in another organization, in another location, in another industry sector, somewhere on the planet. Find out what's hot in your category around the world. Find out how your category is changing. Find out what the latest innovations have been and try to understand why they have been successful in other markets. A quick route to innovation is identifying solutions others have already found and then "reverse engineering" or dissecting them to use the parts that would be most helpful to your specific situation.

Continues...

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Excerpted from The Seeds of Innovation by Elaine Dundon Copyright © 2002 by Elaine Dundon. Excerpted by permission.
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