Tuesday, May 25, 2010

Customers Are Guests

C. Engdahl
The Big E of Big E Toys

Sometimes being innovative means deviating from corporate policy.

I readily admit that I am ultimately responsible for the situation I found myself in. I know this. Acknowledging this fact though doesn’t change the absolutely perturbed feelings I felt towards one particular retailer when the following sequence of events came to pass.

The greatest thing that ever happened in my life as a retail shopper came a few years ago when Target stopped requiring its customers (or as they refer to them – “guests”) to have possession of original receipts in order to return items purchased at their stores. For as often as I purchased stuff at Target, I always hated keeping track of all those pesky pieces of paper in the off chance (or rather better than off chance) that some piece of clothing wasn’t going fit one of my kids, or that I’d inadvertently bought the wrong size bed sheet, or picked out the wrong color bath towel. But no longer did I have to keep all those crumpled up receipts. I merely needed the credit card I’d used to make the purchase.

Not sure receiptless shopping constitutes something innovative. But I thought it brilliant. With this simple move, Target made my life easier. Thank you.

For a long time now, except when I happen to purchase what might be considered a fairly large monetarily priced single item, I don’t bother saving my Target receipts (for larger items I keep the receipt for a little while as sort of back-up proof of purchase.) Nowadays I just rip up the receipts and toss them. This practice recently cost me $25.

My wife and I (along with our kids) were at one of the three Targets near my home just before Easter purchasing a variety of different things – groceries, clothes, Easter goodies, toys, video games, music, etc. We had two carts, each virtually full. We probably bought about $250 worth of stuff that day. A few of these items were meant to be surprise Easter basket goodies for our kids who were all sort of hovering around the checkout area as we attempted to finish our shopping. My wife had discretely indicated to the cashier that certain items were meant for the kids, and as she passed them to the cashier they were rung up and quickly placed in a bag so our kids wouldn’t see them. The cashier did a good job. My kids didn’t notice what we had gotten. I didn’t either. Or at least I didn’t notice one particular item – a 5-pack of $5 circular silver dollar-sized gift card coins. They were kind of cute looking. They were going in our kids’ Easter baskets.

I hadn’t purchased any large items that day. So I tossed my receipt. Oops.

Shortly after Easter I was back at a Target store, with my kids attempting to use one of the $5 gift card coins. I think one of my kids was trying to buy a Slushee at the food counter. The card didn’t work. I pulled a different $5 gift card coin from my pocket. That one didn’t work either. Turns out, the 5-pack of gift card coins never got activated. And I didn’t have a receipt.

Perhaps you can already see where this story is going, so I’ll skip to the end.

Ultimately, after talking with several associates, I found myself at the service counter talking with the MOD (manager on duty) – a twenty-something, maybe early thirty-something fresh-faced kid named J.P. I described the situation to him. By the expression on his face, I knew essentially what his response was going to be. A syllable, maybe two got out of his mouth before I interrupted and said in a somewhat stern voice “I fully appreciate the corporate policy regarding gift card returns and receipts. I know that without a receipt any sixteen year old kid could walk in here, take a few gift cards off the self, never actually pay for them, then walk back in some time later and claim that the cards never got activated. I understand this. But I am not that sixteen year old kid.” As far as I was concerned, Target messed up by not activating these gift cards/coins in the first place. My kids wanted their $25.

The facts are simple. I was holding five $5 gift card coins. None had been activated. I couldn’t use them until they were activated (or replaced with a new gift card). I didn’t have a receipt. J.P. couldn’t with any definitive, tangible proof, actually confirm for himself whether I purchased the gift cards.

J.P. had essentially two options at that moment. In my opinion - not simply because I had a $25 stake in the situation - J.P. should have recognized the reality of the situation and done something to correct it. From a customer service standpoint he had the choice to either treat me like a guest and take me at my word, or treat me like a deceptive thief (with three young unwitting accomplices) looking for a quick $25. It would have been innovative if J.P. had simply replaced the unactivated coins with a new gift card, if only because it would have been a bit unexpected. To be honest, I was fully expecting to walk away completely frustrated and perturbed. I was fully expecting to be out $25.

What do you think J.P. did?

I only remember hearing the first couple words of J.P.’s response. “Unfortunately, corporate policy blah blah blah blah blah…” I knew I was out $25. Fully perturbed, but not surprised I walked away in anger.

On average I typically visit a Target store at least twice a week. And sometimes three or four. It’s not like I don’t have options to go elsewhere for groceries, clothing, household items, and virtually everything else our family uses on a regular basis. I’ve always liked going to Target for some reason though.

I can honestly say I’m not angry about what happened with the gift coins. Like I said, ultimately it was my responsibility. But perhaps coincidentally, or perhaps subconsciously, since this incident from a couple months ago, I think I’ve walked into a Target store a total of maybe three times.

I didn’t feel much like a guest that particular day. Perhaps I don’t feel as welcome as I once did.

Thursday, May 20, 2010

A Letter to the CEO: Let us Innovate!

Nilofer Merchant of BusinessWeek recently called for our corporate leaders to adopt a new way of thinking about growth and innovation in this post. CEOs too often want all members of the organization to innovate but without giving a clear understanding of what matters to the company.

Robert Kaplan, author of The Strategy-Focused Innovation, mentions that only 5% of the company workforce can actually explain in detail what the company strategy is and how their individual efforts can contribute. So my question to you Mr. Leader is how do we make the company more transparent so that employees feel enabled to spread their creativity?

Wednesday, May 19, 2010

Live Webinar: Innovative Research on the Changing Face of Beauty

We're putting together a free innovation webinar on June 10th from 11am - 12pm with our good friends over at BuzzBack Market Research. This webinar discusses how to leverage emerging trends and attitudes to develop new products. Make sure to reserve your spot now (as we all tend to forget later). Here's a description of the webinar below.

Date/Time: Thu, Jun 10, 2010 11:00 AM - 12:00 PM EDT
Presenter: Brendan Light, SVP, Research & Development, BuzzBack

In order to develop new products, companies need to identify unmet needs as well as emerging trends and attitudes. Furthermore, we need to better understand how consumers navigate through new categories.

In order to understand how the category has evolved, we need to be able to look back in time. In 2005, BuzzBack conducted a study among US women around personal appearance and their use of personal care products – from cosmetics to body and face lotion. The study utilized eCollage, our award-winning online technique for revealing visual associations and underlying emotions/feelings.

In this new webinar, five years later, we will look at what’s changed – as well as compare to new findings among women in the UK.

Attendees of this webinar will learn:

• How attitudes related to beauty and appearance have changed among females in the past 5 years and why
• How women use imagery to better express how they feel about their personal appearance on a typical day
• What remains the same -- which consumer feelings are similar today compared to 5 years ago and why
• How the recession has impacted purchase behavior and why

In addition, you’ll learn how new research methodologies, especially hybrid qual-quant online techniques, have evolved. Traditional quantitative measures will be combined with future-facing qualitative collection methods and advanced qualitative analysis.

Register below, make sure to use priority code MWS0029BLOG

Tuesday, May 18, 2010

Bring It To Your Customers

C. Engdahl
The Big E of Big E Toys

A couple years ago I remember consumer trends research company Iconoculture put out a series of analysis using the name “It Sucks To Fly”. They took a look at prevailing consumer attitudes concerning everything airline – security checks, wait times, luggage restrictions, food, scheduling, layovers, etc., etc., etc. As the name implied, consumers generally thought “it sucks to fly.”

I don’t fly as much as I once did, and thus have a bit more patience for what transpires during a trip to the airport. That being said, I feel the need to share this story...

So I took a cab a couple weeks ago at the conclusion of FEI2010 to Logan International Airport in Boston. I was standing in line to check a bag after receiving my boarding pass at a self-service kiosk, when the airline attendant at the counter (assigned to help self-service kiosk customers) indicated to those of us standing in line that we could walk down to the traditional check-in line and get help there if we didn’t want to wait further in this particular line. There was only one airline employee servicing what was turning out to be a fairly long line in the self-service kiosk area. And conversely there were a handful of attendants about 50 yards away helping virtually no one in the traditional check-in lines. Most of the attendants in the traditional check-in area were helping no one. They were sitting there picking their noses (not literally of course. That would have been gross.) I’ll not identify the airline other than to say it wasn’t Alpha, Beta, or Gamma.

This didn’t make much sense to me.

Why make customers, each of whom has at least one piece of luggage to haul around, walk an additional distance to get satisfactory service? The reason people use the self-service kiosks in the first place is because it’s meant to be quick and easy. It was turning out not to be so quick and easy. I think there were three people in front of me when the attendant made the proclamation and at least ten behind me. Based on the grunts and groans from those in line, I imagine most were thinking the same thing as me - “You’ve got to be kidding?”

Not more than 30 minutes prior to waiting in this particular line, I was listening to the closing keynote address by Bert Jacobs, CEO of Life is good® apparel company, at the FEI2010 conference. As I indicated in my post last week, Mr. Jacobs was entertaining and inspirational. The story of the beginning of Life is good® is a fairly compelling story.

[excerpted from the Life is good® website]

In 1989, Bert and John Jacobs designed their first tee shirt. They knew nothing about the business. For five years, the brothers hawked tee shirts in the streets of Boston and traveled the East Coast, selling door-to-door in college dormitories. They collected some good stories, but were not very prosperous. They lived on peanut butter and jelly, slept in their van, and showered when they could. Chicks were not impressed.

By the Fall of 1994, heading home from a long, less-than-fruitful roadtrip, Bert and John were desperately searching for answers to keep the dream alive. Little did they know, the only answer they needed was back in Boston, hanging up on their apartment wall
[the original picture of Jake, who would become the company’s iconic brand image].

One fateful September day, they printed up 48 Jake shirts for a local street fair in Cambridge, Massachusetts. They laid the shirts out on their rickety card table. By noontime, all 48 of those tees were gone. A star was born.

Soon Jake was introduced to local retailers, and his simple message of optimism was embraced like nothing the brothers had ever seen. As demand for product soared, Jake's team grew, and the Little Brand That Could began to spread across America.

Today, the New England based brand stays close to its roots, with an emphasis on simplicity, humor and humility. Through Life is good Festivals, positive products, and a steady dose of ping pong, Jake's crew does its best to keep the good vibes flowing.

What would have happened to Life is good® had Bert and his brother John not taken to the streets? What would have happened had the brothers waited for its customers to come to them rather than bringing its product to its customers? Even today, despite being in more traditional retail outlets all across the country, the company still brings it to their customers through festivals.

So when I heard the attendant at the airport indicate that we had the option to walk to the other line to get service, I politely asked but in a loud enough voice for all around me to hear “instead of us walking down there, why not bring a couple of those attendants down here?” Nods of agreement came from others waiting in line. “Bring the service to the customers, I say”, I said. The attendant looked down the countertop to see her colleagues picking their noses (not literally of course. That would have been gross.) After giving the suggestion brief consideration, she sort of shrugged her shoulders and I think decided it was easier for her to absorb the slightly perturbed, disgruntled attitudes of the waiting customers than to attempt to get her colleague’s fingers out of their noses (not literally of course. That would have been gross.)

To be fair, the lone attendant in the self-service area was quite pleasant and helpful when I finally made it to the counter. Wouldn’t it have been much more convenient for everyone in line though if an attendant or two from the traditional check-in area had come down to help those of us waiting in line in the self-service area? Certainly those that were picking their noses (not literally of course. That would have been gross) could still use their eyes and see that the customer-to-employee ratio in the self-service area was much too high. Somebody from the traditional check-in area should have brought the service to the customers.

It still sort of sucks to fly. Some of the suckiness is probably unavoidable. But some of it falls squarely on the airlines themselves. In this particular instance the remedy seemed quite simple. It was within the power of the airline employees to rectify the situation. It required a certain, perhaps different mentality though. One that isn’t prevalent in a legacy industry like the airline industry.

If the unnamed airline keeps this up, and other airlines step it up, I imagine this airline will find itself last in customer perception. Maybe we’ll then refer to them as “Omega Airlines”.

Tuesday, May 11, 2010

Know Who You Are, And Act Like It

C. Engdahl
The Big E of Big E Toys

The closing address last week at FEI2010 was presented by Bert Jacobs, CEO (Chief Executive Optimist) for clothing company Life is good®. His presentation was an excellent finish to an outstanding conference. He was entertaining and inspirational. His down-to-earth, decidedly non-corporate style mixed together what I’d describe as a little bit Robert Fulghum, a little bit Confucianism, a little bit Ben & Jerry’s, and a tiny amount of foul-mouthed language for timely humorous effect. Like I said, it was entertaining and inspirational.

Like the clothing sold by Life is good® itself, Bert’s presentation was filled with little life-lesson sayings to help us on our organizational journeys.

“Whatever you are, be a good one.”

“Do what you like. Like what you do.”

“Not all who wander are lost.”

…and more.

From the perspective of those of us looking to innovate, the most intriguing saying for me was

“Know who you are, and act like it.”

I think often times, either as individuals or organizations, we find ourselves copying others or mimicking their actions. Taking the lead of others can be simpler and productive. And doing so isn’t necessarily inherently bad. There are certainly valid reasons for choosing this path. From an organizational perspective regarding innovation it might make perfect strategic sense. I don’t think Bert Jacobs is suggesting that taking the lead of others, or copying what they do, is inherently bad either. It becomes problematic however, both for individuals and organizations, if such mimicking defies your own inner nature and perspective. Copying and following others is problematic to the extent that mimicked actions do not represent who you or your organization really are. It’s okay to copy others unless it leads you down a path that goes against your own being.

Life is good® for instance, rather than following more traditional marketing approaches put forth by other successful clothing purveyors, decided its promotional roots lie in “festivals”. Rather than spend their dollars on traditional advertising, they took their message to the people on the street at festivals – pumpkin festivals, music festivals, etc., many of which are used to raise money to help kids with life-threatening illnesses. Life is good® has nothing against the promotional approaches used by more affluent or upscale imaged clothing brands. It’s just that these approaches and their subsequent image are contrary to what Life is good® is all about. You’ve got to remember that Bert and his brother John are two guys that drove around in a beat up van for five years, living off peanut butter and jelly sandwiches hocking t-shirts door-to-door in college dormitories.

Know who you are, and act like it.

Wednesday, May 5, 2010

Innovation Management At FEI Conference 2010

Posted by Chris Andrews, Forrester Research

The following post is my summary of my thoughts from FEI 2010, and will be replicated on my Forrester blog at http://blogs.forrester.com/christopher_andrews. After the event, please follow me on this website and at my twitter address: @chrisandrews50. I’ll be very pleased to make the connection.
I just had the chance to attend the “Front End of Innovation” conference in Boston May 3-5. This event is sponsored by variety of innovation management suppliers, and included some great speakers like James Surowiecki (author of “The Wisdom of Crowds”) and Sophie Vanderbroek (President of Xerox Innovation Group). Though I was only able to attend two of the three days at this event, I was able to leave with a solid impression on the innovation management marketplace.
A few of my notes from this event:
· There is a unique innovation marketplace. With the sheer diversity of innovation discussions taking place at this event, I found it interesting to question whether the there is such thing as a common innovation management marketplace. I think there is. Everyone I spoke to at this event was either trying to unlock innovation potential within their own organization, or was trying to help their clients unlock their innovation potential. In this regard, the marketplace for innovation is quite different (although sometimes connected) with the boarder market of social collaboration tools and technologies –which I do not think have the same mission.
· The market is broader than many realize. Despite the common objectives, the companies in this “market” bring a wide variety of different capabilities to the table. For example, at this event, I interacted with:

o Companies like Spigit, Imaginatik, Idea8, and Kindling who have software tools focusing on idea management (but each with unique strengths)
o NineSigma and Innocentive who are leveraging their “open innovation” heritage to bring new business models and a distinct offerings to clients
o Innosight, which brings more management consulting offerings and thought leadership to lead its strategy consulting engagements
o Seek, Futurethink, and Maddock Douglas which do not focus nearly as much on technology, but instead on methodologies, thought leadership, and workshops that can help clients clarify innovation objectives.

This was only a partial list of the companies I interacted with at this conference – but you can see how this market is evolving in many different directions. Further (as I will note later) there are other players (and potential players) in this marketplace that were not represented at this event.
· The interest in this market is strong. I was impressed to see such a diverse group of innovation stakeholders come together to discuss common innovation interests. In general, I see more CEOs looking to innovative companies – like Apple and Procter and Gamble – and saying “if we’re going to remain competitive in a global market, we need to be like them” – and perhaps this trend was partially behind the crowd at this event. For most stakeholders at this event (as well as Forrester clients), this objective means that they must gain access to more innovation best practices, and manage innovation as a cross-functional discipline.

But all is not roses in the innovation management space. I have a few questions that could impact how this event and this market will look in coming years:
· Where’s the business value? I found myself disappointed by the fact that many end-user companies, and innovation suppliers, were eager to talk about how they changed their internal innovation processes, but short on the ability to describe the actual business value that was generated from that change. This was particularly true when people spoke about social technologies, which I think we can all agree are cool and may inspire collaboration, but have yet to work their way into the mainstream business processes of most of my clients.
· What’s the long term outlook? From the vendor perspective, I wonder how much disruption this “market” will experience when the "gorillas" of the technology marketplace (Microsoft, IBM) and collaboration providers (Tellgent, Jive) push more formally into the innovation technology landscape. Some companies at this event clearly have differentiated models or thought leadership that will be hard for these larger companies to replicate, but others do not. I wonder how many of these same companies I will see at this event in five years – and which companies will emerge as the leaders.
· Where are those gorillas anyway? I’m curious why I saw many software tool providers and small/mid-size consultancies were sponsoring this event, while leading brand name companies I follow in the innovation space were less visible. I would love to know why companies like BCG, McKinsey, IBM, Accenture – companies who pride themselves on their innovation offerings and are very much part of the innovation management marketplace – do not make themselves more visible at events like this (I know several had representatives at the event, but their companies were not highly visible). I suspect there are a variety of reasons for this, but to me none of those reasons really justifies their limited presence in the innovation discussion.

Overall, however, this wasa great event, and a great market to watch. Look out for my coming document on the future of innovation management in which I’ll try to take a holistic view, to tie together the diverse companies in this space.

FEI2010 - Are There Such Things As Innovation Inhibitors?

C. Engdahl reporting from FEI2010

Are There Such Things As Innovation Inhibitors? (A Fishbowl Session)
Leighton Cooper (LC), Alcoa
Brian Glassman (BG), Int'l Journal of Innovation Science
Tom Granzow (TG), Herman Miller
Roger Miller (RM), former La-Z-Boy

The "Fishbowl" format at FEI2010 is somewhat like a panel discussion. It's a little more chaotic however in that it's more collaborative (with the audience) in nature, less structured, and more spontaneous (there aren't really any "canned" questions). My post here will reflect this format and thus be a bit more stream-of-consciousness, perhaps at times chaotic. I'm sure I'll miss a few things but I'll try to capture a few relevent streams. I'll be using participant initials to indicate who said what. Buckle up. Here we go...

? (plus a number to indicate different people) = question from the audience

[formal participants are introducing themselves]

BG – [introduces idea of Cultural Barriers]
?1 guy from Goodyear – We created iTeam at Goodyear plus formal process for innovation which incorporates "lean" (because of direction from boss). “Lean” is part of our culture. Can you comment on this or other cultural inhibitors. How do we deal with these?
BG - I don't like lean for front-end
LC – “lean” suggests a linear event. Front-end is non-linear in nature.
BG – Lean is predictable, formal, process oriented. This is in direct conflict to Front End activity
BG – toward Goodyear guy – your boss simply loves “process”
?2 – Even though lean conflicts with Front End activities, we still want tools that create repeatability. Therein lies the conflict or challenge for all of us.
?1 Goodyear guy – I don’t think there’s enough emotional intelligence and servant leadership to help co-workers.

?3 Risk is another factor out there affecting the Front End. Companies don’t want to take risk. Typical project these days are about saving money. Companies aren’t stepping out.
BG – risk is definitely an inhibitor. Are there ideas for overcoming this?
?4 How I get measured is a factor.
?5 Portfolio mgmt helps
LC – our CEO is implementing a new 3-yr and holding sr mgrs to it. Sr. Mgmt incentivized based on 3-5 yr plan (growth plan).
TG – we have a 3-5 year plan, but product development budget based on one year
?6 – is 3 years long enough? What’s the right length?
LC – we have 3 year business plans, and up to 5 yr R&D plans. What’s the right time frame? Depends on business plan – aerospace (10-15 years). Electronics (a year)
TG – we can put plans together and say at the end that they’re a joke. R&D plan isn’t accurately aligned with budgets.
RM – payoffs take a long horizon. Get 2 or 3 projects to payoff in long-term to compensate for all the projects that tank. Hopefully projects that are going to fail, fail quickly. Get them off the docket.

[A statement made early in the introductions that I thought worth conveying is as follows:]
(TG) - "Because of the Aeron chair success, some people began to say you shouldn't listen to customers. Customers absolutely despised what Aeron looked like. The other half of the story though is that Herman Miller does 'comfort" testing. Aeron scored extremely high on 'comfort'. You never hear this part of the story.”

FEI2010 – Trust or Bust

C. Engdahl reporting from FEI2010

Trust of Bust
FEI2010 Presenter: Dr. Joetta Gobell, Nissan North America

We are all Pavlovian dogs. Or perhaps just children of B.F. Skinner. Not really of course, but I sort of felt this way listening to Dr. Joetta Gobell of Nissan talk through a real world example on how to develop trust using human behavioral principles. Dr. Gobell walked through a specific workflow scenario utilized at Nissan to increase trust and performance within Nissan’s Advanced Planning & Strategy Group.

This particular scenario is about Nissan North America working cross-functionally with counterparts in Japan within the Advance Planning & Strategy Group. This group is responsible largely for the long-range development of ideas (5 to 10 years out) - which starts with Exploratory Research, ends with Concept Development, then gets handed off to other groups within Nissan for various types of additional new product development until the vehicle is eventually launched about five years later. Their outlook is anywhere from 10 to 15 years in the future.

The primary goal for this group, despite being globally and culturally disperse, is to create and present concepts with what Dr. Gobell characterizes as “One Voice.” Unified ideas should emerge from the collective group, rather than separate divisional or geographic entities.

Three classic, virtually universal behavioral principles play into this story:
1. Reinforcement Matters – this is Pavlov’s dog in action
2. The Endowment Effect – the idea that someone places more value on something simply because they own it
3. Diffusion of Responsibility – refers to the probability that someone will help out in a situation. The more people involved in a situation (such as a crisis or NPD group), the less likely an individual person will step forward to provide assistance

In the case of Nissan’s Advanced Planning & Strategy Group, where success is often measured simply by how many of your team’s PowerPoint slides make into the final presentation deck, these principles manifested themselves in sometimes obvious, sometimes subtle ways. There were no incentives to create unified decks. There was reluctance to share material openly. There was a lack of clear responsibility for various aspects of the process. Trust that others would do their part did not exist. Confusion resulted.

Making some fairly basic modifications to the overall workflow process, had a tremendous positive effect on the team’s output and allowed them to speak with “One Voice.” One of the simplest yet profound alterations in the workflow was what Dr. Gobell referred to several times as “divide and conquer”: After each team was assigned a portion of the specified output for a particular project and later presented it to the collective group, each team then switched portions and worked on elements already started by other teams. When teams switched portions, they were only allowed to update the outputs. They were not allowed to simply discard the material.

By developing a sort of Mutually Assured Destruction scenario, trust, teamwork, and success improved. Everyone owned every part of the output. One Voice was achieved.

FEI2010 Keynote – Sustaining Positive Spirals of Creativity

C. Engdahl reporting from FEI2010

Sustaining Positive Spirals of Creativity
Presented by Teresa Amabile, Author & Professor Harvard Business School

“It was the best of times. It was the worst of times.” - A Tale of Two Cities, Charles Dickens

In a presentation that could have easily been titled “A Tale of Two NPD Groups”, Professor Teresa Amabile of Harvard Business School opened her address by asking audience members to share stories about their best days and worst days at work. A few brave souls came forth.

Whether a person has a best day or worst day is driven largely by what Professor Amabile describes as “Inner Work Life”. And interestingly, although perhaps not surprisingly, “Inner Work Life” can have a profound effect on organizational performance, particularly as it relates to New Product Development.

Years of research, including extensive diary field studies led Professor Amabile to isolate the concept of Inner Work Life and to conclude simply that:
a) Inner Work Life Drives Performance

… relatedly

b) Perceptions Drive Performance, and
c) Motivation Drives Performance

Characterized by positive perceptions, elated emotions, and a strong motivation to engage in work related activities, “Great Inner Work Life” has positive effects on NPD performance. Conversely, “Terrible Inner Work Life”, characterized by negative perceptions, dark emotions, and weak motivations concerning work has negative effects on NPD performance. Professor Amabile used the story of two companies (names changed to protect the innocent - or guilty depending on how you look at it) which clearly demonstrated these positive and negative effects.
So Inner Work Life drives performance, but what drives Inner Work Life? (Take note all who desire increased NPD success).

1) Progress at Work – the feeling that projects are moving forward and not being blocked. Projects don’t necessarily always need to be completed or resolved, rather progress needs to be demonstrated
2) Project Support – receiving anything that directly helps work activities such as clear meaningful goals, sufficient resources, sufficient but not too much time, etc.
3) Personal Support – getting social and emotional support, encouragement, and recognition

Does your organization do what it takes to create a Great Inner Work Life for employees?

FEI2010 – Establishing Successful Business Models, The Amway Transformation

C. Engdahl reporting from FEI2010

Establishing Successful Business Models: The Amway Transformation
FEI2010 Presenter: Candace S. Matthews, CMO Amway

When it comes to business models, Amway is quite intriguing. But when I think of CPG companies, Amway isn’t at the forefront of my mind. It should be though. It’s a huge, globally distributed organization. In a presentation titled “Driving Transformative Growth Through Innovation”, Amway CMO Candace S. Matthews highlighted the company’s history while outlining some recent challenges that prompted the organization to transform its approach to innovation.

Despite, or perhaps because of, its historical success, Amway in recent years began to think and act differently as an organization. About five years ago the company had begun to settle into what Ms Matthews described as “maintenance mode.” Growth was still solid, yet was coming largely from international expansion rather than product and brand innovation. Because of the solid growth however, the mentality had largely been “why take risks?”

Amway’s approach to innovation has recently dramatically changed. There is new vigor and commitment throughout the organization. Innovation is no longer something concocted and set forth by isolated individuals within the organization, but rather infused into overall corporate objectives and expected universally throughout the organization.

Some specific steps taken recently that demonstrate this innovation transformation include:

1) The acquisition of top knowledge workers from outside the traditional Amway organization. About 30 or so Director-level personnel have recently joined the organization in the areas of Marketing, R&D, and Finance. They’ve come from top CPG companies throughout the world.

2) A new culture of engagement. Amway has taken the innovation message aggressively to its employees and created new performance competencies to complement this effort.

3) Leveraging a new brand identity. Amway recognized that it had barely tapped its brand identity. They had been focused historically on channel relationships and distributors rather than creating a customer-centric brand. More effort is being put forth to create and strengthen a globally consistent brand.

Ms. Matthews presented a variety of new products and initiatives being implemented by Amway. Some exciting stuff. Appears their transformation is working.

FEI2010 Keynote – Moving Beyond the “Core”, New Business Model Creation

C. Engdahl reporting from FEI2010

Moving Beyond the “Core”, New Business Model Creation
Presented by Vijay Govindarajan, Professor of International Business and Founding Director, Tuck’s Center for Global Leadership

“The Future is Now!” says FEI2010 keynote speaker Vijay Govindarajan, Professor of International Business at Dartmouth. “The Future is not about what we do in the future. It’s about what we do now.” In a presentation dedicated to the seemingly basic yet often times difficult to implement concept of Strategy, Professor Govindarajan suggests that Strategy = Business Model Innovation. Strategy is not about “managing the present”, but rather about “selectively forgetting the past” and “creating the future”. The best way, in fact only way, to do this is to capitalize on non-linear, disruptive changes in market conditions and technology to create fundamentally different business models. Organizations manage the present by responding to linear changes in the environment. Organizations compete for the future by responding to –call it what you will - non-linear changes, disruptive changes, step changes, or discontinuous changes.

The three basic principles set forth by Mr. Govindarajan for Business Model Innovation include:
1. Have a Big Dream. Set “unrealistic” goals. More often than not, organizations tend to create processes and goals that “shrink ambition.” Don’t do this. Stretch imaginations. Make your organization reach farther.
2. Think about “Next Practices” rather than “Best Practices”. Benchmarking is not strategy.
3. Amplify Weak Signals. Take advantage and exploit seemingly innocuous and ignored opportunities in the market.

Is your strategy a dead horse?

I thought this rather amusing, so I’ll share it in its entirety. According to Professor Govindarajan, here are the Top 11 Things Organizations Often Do With A Dead Horse:
11. Whip the horse a little harder
10. Change the rider
9. Harness several dead horses together for increased speed
8. Emulate the best practices of companies riding dead horses
7. Proclaim that it’s cheaper to feed a dead horse
6. Shorten the track
5. Affirm that “This is the way we have always ridden this horse”
4. Declare that “This horse is not dead
3. Have the lawyers bring suit against the horse manufacturer
2. Engage a consultant to study the dead horse
1. Promote the dead horse to a senior management

Tuesday, May 4, 2010

FEI2010 Keynote – Revealing the Magic, The Importance of Design

C. Engdahl reporting from FEI2010

Revealing the Magic: The Importance of Design
William Setliff, VP Marketing at Target, with Ryan Jacoby¸IDEO

Stylistically this FEI2010 was different. Rather than an address, this was more like a conversation between colleagues. Ryan Jacoby of IDEO tossed out questions for Mr. Setliff concerning various aspects of “design”, most of which either came from attendees or were sent via Twitter and other means prior to the session. Audience members jumped in too with their own on-the-spot inquiries. For a conference touting Collaboration, as far as keynotes typically go this session was the embodiment.

As you might imagine given the format, the idea threads during the session weren’t completely woven together. Two particular interesting elements emerged that I think are worth highlighting.

“Design is at the core of what we do”, said Setliff. “Whether we’re designing a store environment or designing new products, it’s always with us.” What I found interesting was the “continuum” Mr. Setliff describes. There’s process and best practices on one end and ethos on the other. If an organization is grounded completely in ethos, they run the risk of simply “gazing” and getting nothing done. If on the other hand they focus exclusively on process and best practices they’ll be devoid of style and soul. “Process-based activity is the work-around for lack of ethos”, suggests Setliff. For Target, it’s a continual give and take along this continuum. They have not held themselves to one method of innovation.

Target subscribes to the diversity standards and ideas set forth by other FEI keynote speakers such as James Suroweicki. In addition to classic parameters such as gender, age, ethnicity, etc. when establishing teams, Target is attempting to make “diversity a foundation for the excellence of ideas.” This is exemplified within Setliff’s organizational arena by his emphasis on certain skill sets when establishing different types of teams. In particular, he looks for 1) people with less ego (people with a sense of self, but not a sense of entitlement), 2) super analytical people (critical thinkers, but not necessarily technical), and 3) people with life experiences.

Eco-innovation = much less stuff

A recurring theme through FEI Boston’s eco-innovation stream has been how will companies cope with the conflict between the need for ‘much less stuff’ and their growth models. Robin Chase, founder of Zipcar thought the answer was ‘more meadows’, plus excess capacity sharing and web 2.0. An interesting but somewhat ideological idea when taken to its extreme.

Faith Taylor, VP of Sustainability and Innovation at Wyndham Worldwide (a hospitality/hotel firm) was a little more pragmatic. She suggested that the route to persuading consumers to buy less, was to differentiate based on the service offering, and to start focusing on the bottom line over the top one. Like other firms, Wyndham have found consumers want green offerings, but won’t pay more for them. They expect them to be part of the value proposition. Furthermore the internet has created much more accountability as customers can and do research the eco-credentials of their providers and ‘punish’ those with poor records.

On a more practical note, Totti Könnölä told us about a tool he has developed called the eco-innovation dashboard. This looks like an interesting way to check whether you are taking a balanced approach to your eco-innovations and product developments, and aren’t missing major opportunities by developing incrementally rather than radically. He used the example of Envac which developed a vaccum system to suck waste out of hospitals through an underground network. At first it seemed like a crazy 1960s idea, but it is apparently gathering traction as a 21stcentury eco-product.

Finally Totti shocked us with the horrifying fact that 2 million plastic bottles are discarded every five minutes worldwide. The situation hasn’t been helped by a mains water contamination in Boston this week. It’s bottled water all round, and with special irony, the water being served in the eco-innovation room had come all the way from Fiji. I have an eco-innovation idea for the Seaport Hotel…

Rachel Harker leads the Consumer Product Development business with Duncan Smith at Cambridge Consultants. Rachel’ s specialities include wellness and eco innovation.

From the ‘Beyond Open…’ Summit at FEI

Robert Kirschbaum from DSM gave an excellent talk really setting the scene for the ‘Beyond Open’ summit on the first day of FEI.

Like many large corporations DSM has embraced the concept of Open Innovation and recognises that ideas can come from anywhere… in DSM’s case 99.999996% of the world is outside of DSM! As Robert put it – in a closed model you act as if ‘our lab is our world’, whereas in an open model you recognise that ‘the world is our lab’ – and which situation would you rather be in?

DSM have been doing pretty well on the Open Innovation front and their CEO now says that OI is no longer a competitive advantage, it has become a competitive necessity. They’ve got partnerships, ventures, incubators… and even an open campus in the Netherlands where 80 different companies have come to join them.

Throughout the day we heard from speakers from Unilever, General Mills, P&G, SealedAir, Hallmark….an interesting theme that was echoed throughout the rest of the day was the combining of the themes of sustainability and Open Innovation. Many of the large companies are acknowledging that there are many global challenges and that a joint approach is needed to tackle them.

There are the overall global sustainability challenges and also their own company’s environmental impact. For example Unilever are aiming to grow €40B to €80B in 10 years without increasing environmental impact!

An interesting comment by Stefan Lindegaard was that the US are further ahead with implementing OI and sharing best practice for OI than Europe. I’d definitely disagree with this from my experiences, but from discussions at coffee afterwards it’s clear that whilst there are OI communities on both sides of the Atlantic they don’t really mix that much -and that more could be learned by sharing across ‘the pond.

The challenges of implementing Open Innovation were discussed throughout the day with the companies sharing their experiences. Across the board the importance of senior support, OI champions, having a common language, organising for OI, and having tools to help people work in an OI manner….were all clear.

Despite these similarities and similar issues, as I’ve previously commented it is fascinating that each company develops and implements their own unique approach to OI, depending on the type of business, typical time to market (FMCG vs high-tech), and corporate culture.

Ruth Thomson works on Authentication Systems and Consumer Products at Cambridge Consultants.

FEI2010 – Case Study of Disruptive Technology

C. Engdahl reporting from FEI2010

Case Study of Disruptive Technology
FEI2010 Presenter: Steve Sassoon, inventor of the digital camera, Kodak

The development story for the original digital camera is both entertaining and informative. Steve Sassoon of Kodak, who was not only there when this story took place, but was in fact the principal character in it, tells the story with a sense of humility and humor. He clearly is an intelligent guy, whose abilities are not simply technical in nature as an engineer, but also social. The development of the digital camera is a story as much about organizational navigation as it is about technical development. It is a story that very easily could have been called “20 Years in the Making: The Disruptive Technology of the Digital Camera.”

The first digital camera was created in 1976. The first commercial digital camera wasn’t introduced until 1994. I’ll not actually attempt to retell the story, but rather communicate the lessons from it. Know that it’s pretty interesting though, and if you have the chance I’d suggest you learn about it.

Here are Steve’s lesson for as he puts it “Surviving Disruptive Technology.”
1. Understand corporate culture and speak to it
2. You do have friends, they just might be hard to find sometimes
3. Public relations is an important aspect to innovation. Be honest about the capabilities of your innovation. Always be positive. Speak about the virtues of the disruptive innovation, not necessarily the negative aspects of what its supplanting.
4. All roadblocks are temporary
5. Be patient, persuasive, and persistent

FEI2010 Keynote – Technology Led Innovation, Tapping What’s Next

C. Engdahl reporting from FEI2010

Technology Led Innovation, Tapping What’s Next
Presented by Dr. Sophie Vandebroek, CTO Xerox & President Xerox Innovation Group

In contrast to the largely observational, storytelling nature of other FEI2010 keynote speakers James Suroweicki and Steven B. Johnson, Dr. Sophie Vandebroek in a presentation titled “Turning Inspiration Into Critical Customer Assets” provided a rich, in-depth practitioner's view of how to effectively incorporate customers in the innovation process.

From Xerox’s perspective Innovation = Creating Customer Value. It makes sense then that Xerox’s structure and approach to innovation is customer-centric, and infused with multiple and dynamic customer touchpoints. It’s worth noting that Customers are but one of the key ingredients to create successful investment portfolios – the others being Strategy, Trends, and Balance Scorecards. But Customers and their needs are the primary elements in what Xerox calls its Innovation Domains – which are Knowledge Work, Sustainability, and Personalization, in all of which Xerox is doing some incredible work.

Traditional technology led innovation typically relegates customers to the bookends of the process. As Dr. Vandebroek suggests, “it’s like the children’s game ‘telephone’.” Customer information is gathered up front in the process, but then gets garbled and distorted and ultimately presented back to the customer in a completely unrecognizable form. What emerges is not an accurate reflection of customer needs.

Xerox in contrast takes a different approach to customer innovation based on various Research Horizons and Roles. These roles include Explorer, Incubator, and Partner. Each Role requires different types of customer contact (or sessions) with different levels of collaboration. The four principal types of Customer Sessions include:

1. Customer Dreaming Sessions - a sort of “pie in the sky” discussion concerning the future and their needs
2. Work Practice Studies – where company employees essentially “live” with customers in the field
3. Technology Focus Groups – whereby potential technologies/scenarios are shown or described to customer groups and they’re asked to comment
4. Customer Innovation Council – a collection of existing customers that are used as a sounding board and originator of innovative ideas.

Xerox commitment to innovation is obvious. Given the robust nature of their customer-centric approach to innovation, it’s no wonder their product portfolio is solid.

FEI2010 – How Global Trends Will Shape the Future of Innovation

C. Engdahl reporting from FEI2010

How Global Trends Will Shape the Future of Innovation
FEI2010 Presenter: Steven Faktor, American Express

If I had only had the opportunity to listen to the first half Steven Faktor’s presentation I may have walked out feeling pretty glum. In a presentation entitled Econovation™: Innovation after the Great Recession, Mr. Faktor outlines a possible future scenario for the U.S. economy, then applies some innovation principles to help us understand how to shape it.

In what Mr. Faktor describes as a personal revelation, he recently realized that “no one knows anything.” Spurred by the fact that few people predicted the recent tumble in the markets, and empowered by his own economic background¸ Faktor went about putting more formal structure around his own ideas. (I feel a book coming out sometime in the future.)

Using frameworks he developed such as the 4C’s of Innovation™ - Creativity, Capabilities, Culture, and Context - and the Creativity Cube™, Mr. Faktor deconstructs the current economic environment to reveal innovation opportunities and growth sectors – health and education in particular. Although his initial scenario suggests doom and gloom for the U.S. and other markets, the future he envisions is ripe with opportunity.

Looking forward to the book.

Find out more about Mr. Faktor at www.Ideafaktory.com.

James Surowiecki and the Wisdom of Crowds

Chris Andrews, Forrester Research, From FEI 2010

I was very excited to attend the session by James Surowiecki. Though I have not read James’s book, I am a regular reader of his column in the New Yorker. I am also intrigued by the paradox I see underlying the idea of “The Wisdom of Crowds”….On one hand, I see more and more companies and business models based on collective intelligence -- many of whom actually sponsored this event. On the other hand, however, we are literally surrounded by examples of poor wisdom coming from group intelligence, from the recent stock market collapse, to the “groupthink” that goes on within each of our individual companies.
Here’s what I heard during this session:

· James started out by highlighting and important point, that wisdom of crowds only works well “under the right circumstances”. I’m frankly very happy he pointed this out from the outset, because it underlies my skepticism about the wisdom of crowds.
· Jim told some interesting stories about jellybean counting contests, in which he often finds that the average of people’s guesses about the number of people counting the number of jellybeans in a jar, is surprising accurate, he says typically within about four percent of the actual number
· The same applies to innovation. James says that the vast majority of innovations typically work in a collaborative community. He noted that notable innovators like Ben Franklin actually relied heavily in collective or community intelligence.
· To make crowds work, you need the group to be diverse -- you need diversity of perspective and lots of different tools, multiculturalism, diversity of age, diversity of gender; diversity expands the base of information; Its also helpful to have a “devil’s advocate”
· He noted that diverse teams often have a hard time working together, because people have to work with people they agree with and who have a similar background to. There are more arguments within diverse teams, but the results can often be better. I think this was one of his most interesting points, because it highlights the problems that many managers have with diverse teams…they’re hard to manage!
· You also want independence of thought, which is much easier said than done, because we take cues from other people. Imitation, for the individual, is safe, but it creates more problems for a group (if everyone in the group is following others).
· What can you do to get people to think for themselves? Respect confidentiality, watch out for talkative people, if you are leader don’t dictate to people in advance (be open to new ideas). James noted that none of these are quite as easy as it sounds.
· James ended his talk about the search for the USS Scorpion, a great story about effective use of the wisdom of the crowds.

I was very impressed with Mr Surowiecki as a speaker. Not only was he focused in his subject matter, he was able to bring quite a bit of academic, statistical, and real-world examples of how the wisdom of the crowds can work effectively. As noted, I love the fact that he brought nuance to the argument – showing the exact conditions and circumstances in which the wisdom of the crowds work.

However, a frustration I can see among my clients is that diversity and independence are really not enough to ensure the reliability of crowd….I see organizations struggling with a variety of issues in their idea generation work: how to ask the right question, management of the market, proper sample selection, governance, incentives and metrics. These are things that make collective intelligence easier said than done – and how some innovation management suppliers differentiate themselves.

Nonetheless, and interesting and engaging session.

FEI2010 Keynote – Scenario Planning: Authoring the Future

C. Engdahl reporting from FEI2010

Scenario Planning: Authoring the Future
Presented by Steven B. Johnson, author of the books The Invention of Air, and The Ghost Map

The overarching theme, and in fact actual theme, of FEI2010 is about collaboration – A New Front End: The Era of Collaboration. And one of the interesting subtexts of this theme during the conference has been the idea of Open Systems. After listening to Steven B. Johnson’s keynote presentation "Authoring the Future", I couldn’t help wonder “fifty years ago, who would have thought the Soviets would create one of the first truly modern day open systems?”

Excited for the opportunity to use notes from his new iPad, author Steven B. Johnson drew upon ideas from his forthcoming book Where Good Ideas Come From (due out this fall) to highlight the importance of “cultivating hunches” to create innovation and how to go about doing so effectively. Some of the most interesting examples during his presentation involved ideas that were initially cultivated for one purpose, and ultimately used for something else. The technology and techniques used for instance by students at the Advanced Physics Lab within Johns Hopkins after Sputnik launched in 1957, ultimately became what we now know as Global Positioning Systems (GPS). Who would have imagined that a technique and the technologies used to first pinpoint the location of Sputnik in 1957, then used to locate nuclear submarines, would one day be used to help caffeine-deprived individuals secure a large mocha by locating the nearest Starbucks?

“Ideas are networks,” says Mr. Johnson. “They are not a single thing.” They are connected and built upon other ideas. And rarely do they originate from true epiphany, but rather through what Johnson calls “the slow hunch” – the long process where a kernel of an idea is developed over time with the help of supportive environments and social clusters.

So where do good ideas come from? And what can you do to create them?

1. Cultivate Hunches – create environments that support the develop over time of creative ideas. Tim Berners-Lee for instance, credited with creating the World Wide Web, actually began cultivating the idea of such a platform about ten years before he actually developed it. He (fortunately for all of us) was in an environment that allowed and even encouraged the exploration of these ideas.

2. Recognize that Clusters, not necessarily Corporations are the social environments in which innovative ideas are developed. Clusters, usually informal and spontaneous in nature, can sometimes form within organizations. But more often than not are created outside formal organizational structures and are based on geographic location or basic common interests. Think Silicon Valley. Why are tech start-ups so often found in close geographic proximity? It's because face-to-face encounters, even with competitors, allow people to “riff” on ideas.

3. Remain open to Exaptation – the idea that something created for one purpose could be applied and become useful for something completely different. Think GPS.

When the PhD students at John Hopkins started tracking Sputnik in late 1957, they were able to do so because of the clarity and strength of the signal emitted by the satellite. The Soviets wanted the world to hear its innovation, and thus kept its signal open. Innovation depends on open systems.

FEI2010 – Prediction Markets

C. Engdahl reporting from FEI2010

Prediction Markets
FEI2010 Presenter: Tina Brown-Stevenson, Ingenix (a UnitedHealth Group Company)

In a solid FEI Champions presentation to complement James Surowiecki’s keynote address, practitioner Tina Brown-Stevenson, Sr. VP Innovation and Information Group at Ingenix, talked through the implementation of a prediction market at Ingenix. As a lead-in to the details of the specific practical application developed at Ingenix, Ms. Brown-Stevenson drew upon examples from Mr. Surowiecki’s book The Wisdom of Crowds to outline the foundational philosophical elements for Ingenix’s overall approach. Examples included the circumstances and decisions made prior to the Columbia Space shuttle disaster and the Iowa Electronic Market. You can read about the details for both of these examples in the book The Wisdom of Crowds.

The criteria for success when harnessing “the wisdom of crowds”, as outlined in Jame’s Surowiecki’s book of the same name include 1) a crowd with a diversity of opinion, 2) an independent crowd of individuals whose opinions aren’t shaped by those around them, 3) decentralization that allows individuals to draw upon local knowledge, and 4) a mechanism to aggregate information that turns private judgments into collective decisions. It was these principles that shaped the development of the Ingenix Prediction Market.

Launched on July 7, 2009, the Ingenix Predication Market is a public application focused on the health care industry. Examples of general categories predicted in the market include “Health Care Reform Legislation”, “Health Reform Impact”, and “Health Reform Cost”.

As with any new application or organizational change, "there will be challenges" Ms. Brown-Stevenson points out. Ingenix has had its share. In addition to the usual keys to success for addressing such challenges – which include executive sponsorship, solid requirements definitions, starting small with a core group of people, initially staying under the radar, and involving legal and IT early in the process – the most interesting insight from the Ingenix experience seemed less obvious to me, but made perfect sense when revealed. The analogy of the Prediction Market as a sort of “stock market” was a barrier to success. People didn’t quite understand how the stock market applied to ideas. The prediction of ideas and information needed to be simpler than actual stock trading.

Even with its current relatively small amount of data and participation, the prediction market at Ingenix is a relative success and has already revealed insights for the company. As Ingenix moves to further develop the prediction market - which will include using it in conjunction with market research initiatives, and providing stand-alone prediction market advisory services - Ingenix will remain focused. As Ms. Brown- Stevenson says, we will keep our “eye on the goal” – another key to their success.

FEI2010 Keynote – Success Through Synergy: The Wisdom of Crowds

C. Engdahl reporting from FEI2010

Success Through Synergy: The Wisdom of Crowds
Presented by James Surowiecki, author of the book The Wisdom of Crowds

In a presentation filled with illuminating storytelling, James Surowiecki in his keynote address to a capacity crowd at FEI2010 provided compelling evidence for the powerful nature of crowd wisdom. Utilizing a diverse set of stories (most of which appear in more detail in his book The Wisdom of Crowds) – such as the classic “Jelly Bean in the Jar” guessing game, the “Poll the Audience” from Who Wants to be a Millionaire, experiments conducted by Eric Von Hippel at MIT, and the rescue operation surrounding the Scorpion submarine - Mr. Surowiecki drew a connection between crowd wisdom and innovation. Under the right circumstances groups of people can be more intelligent, successful, and innovative than even the smartest individuals. The key to crowd success is creating the “right circumstances.”

One of these “right circumstances” is diversity. Diversity within a group is arguably the most important quality associated with successful group decision-making. By diversity, Mr. Surowiecki doesn’t necessarily simply mean diversity in age or gender (although this is how diversity may manifest itself within an organization). Rather Surowiecki means “cognitive diversity” and “diversity of heuristics” (the method by which a problem is solved or perceived). The “way in which people think” is important to group success. Surowiecki doesn’t suggest you actually hire for stupidity to make your organization more cognitively diverse, but rather create diversity in mindsets (perhaps by assembling groups with multi-cultural backgrounds or diverse training histories). “Corporations often get locked into certain collective mindsets”, suggests Surowiecki. “Accept the fact that everyone will make cognitive mistakes when making decisions. The trick is to assemble a group of people that don’t all make the same cognitive mistakes.” Mindsets are what are truly important.

The irony, and thus the challenge for organizations, is that diverse teams have a harder time working together. “Diverse teams may be more successful,” Mr. Surowiecki points outs, “but people don’t necessarily like working within them.” People prefer working in homogeneous groups. There’s less conflict. Quality decisions however, and innovative ideas emerge from conflict. Be open to this conflict and the ideas that emerge from unlikely places.

FEI: Unreasonable Behaviour—A Driving Force for Innovation?

Does unreasonable behaviour inspire disruptive innovation? If you set goals for a project that are not just challenging but are actually unreasonable, you can inspire a team to challenge conventional thinking and look for a step change – a radical innovation.

This is the subject presented at the keynote presentation at Front End of Innovation in Boston yesterday afternoon. Mark Harrison of Diageo and Eric Wilkinson of Cambridge Consultants gave a presentation that was both inspriring and entertaining. This was not only because of their natural double act potential – they obviously know each other well – but also because they were talking from real, current experience of a new project that may well achieve just that: a step change in the market.

What’s unreasonable behaviour? Mark described it as thinking the unthinkable, as a way of growing your business through innovation.

Mark and Eric used the development of a breakthrough drink and delivery system as their main example – frozen drinks on tap. The delivery system needed to be designed to a cost point that was not just slightly lower, but was a fraction of the cost of existing systems – unthinkable at the time.

How did they do it?

1. Create conditions like a crisis without the chaos of a real crisis. Without this, you will do what you’ve always done, and you will get what you always get – incremental innovation. You need to adjust your goals.

2. Good partnerships. The right partners to bring the skills, experience and attitude to rise to the challenge. Cambridge Consultants were Diageo’s development partner to deliver this particular innovation.

3. Good process. It’s not random chance – Cambridge Consultants’ logic tree approach makes sure you don’t just arrive at the first solution but the optimal solution – both avoiding existing IP and protecting your position.

With all this in place, the major technical breakthrough came two months in, and within three months there was a working prototype. Within a year the alpha build was being made.

So being unreasonable – thinking the unthinkable – can work. And with the right team, as Mark said, if you can do this once you can do it every time.

Mark was unable to reveal the brands that would be launching the product… but watch this space.

#FEIBOSTON Day One Transcript

So I hope Day One went well for all of you!

Forgot to take notes? Pen ran out of ink? Want to find out what that session you missed covered? Missed Day 1 altogether because you have a serioeus aversion to places without drinking water?

Then check out the "twitter stream" from yesterday where you can read all about the sessions that twitter users at the conference attended. The twitter stream is a great way to catch up on the content - why? - because it usually contains highlight points from the various sessions, but with the addendum of extra conversation and comments from a wide range of people all around the world!

If you'd like to follow/contribute to the twitter stream for today's sessions - just search for "#FEIBOSTON" and join in!

Day Two is about to kick off and there are a lot of highlights to look forward to - not least of which James Surowecki at 9AM today. So I hope you enjoy the day. Again, if you see me wandering around, don't be shy and say hello!

Monday, May 3, 2010

FEI2010 Kick-off Keynote – “More Meadows” by Robin Chase, Founding CEO of Zipcar and GoLoco

C. Engdahl reporting from FEI2010

“More Meadows” by Robin Chase, Founding CEO of Zipcar and GoLoco

In a style that I can only think to describe as “controlled stream of consciousness” (a phrase I just made up and mean only in the best possible way), innovator and entrepreneur Robin Chase delivered her compelling FEI2010 Kick-off Keynote “More Meadows” with energy, humor, and passion. I can only wish she had more time to speak.

Beginning with the somewhat rhetorical, tongue and cheek question “What is the Key to Our Future?”, Ms. Chase after demonstrating she had already consulted Solvalou.com, came to the conclusion that “Innovation” is indeed the key to our future. The more important, less obvious question, the answer for which she spent systematically revealing to the audience throughout her presentation was “How do we get lots of innovation?” Essentially you need five things:

1. Problems
2. Time
3. New Thinking
4. Low cost of inputs
5. Experimentation

Using varied examples such as Chatroulette.com, the concept of “bed-sharing” (which ultimately became what we now refer to as hotels), couchsurfing.com, and what could only be considered the most brainless iPhone app available - “Hold the Button” - Robin demonstrated that three simple principles of our 2.0 world can be used to create profitable, innovative products and companies. All the while creating a more sustainable future by using a lot less stuff.

1. Identify Existing Capacity,
2. Create a platform that utilizes this capacity, and
3. Have end-users provide their own content. Have them bring their own stuff.

Interesting and compelling.

But what is the real key to our future? How do we get lots of innovation? The answer is quite simple really.

Create more open systems (rather than closed systems), the metaphor for which is “More Meadows.” Meadows are diverse eco-systems that could be literally, but at least figuratively “open”, adaptable, and allow for experimentation and new thinking. If we don’t create “meadows” Robin suggests “we’re screwed.” Whatever industry you’re in, don’t protect the status quo. Create a meadow.

FEI2010 - Innovation In An Enterprise 2.0 World

C. Engdahl reporting from FEI2010

Innovation In An Enterprise 2.0 World
FEI2010 Presenter: Fabrizio De Pasquale, Siemens

As Fabrizio De Pasquale points out during his presenation for the Beyond "Open" Summit, an organization such as Siemens incorporates a broad variety of globally distributed expertise. Mr. De Pasquale suggests Siemens is like a world-wide puzzle of over 400,000 people throughout the world, each possessing a small piece of Siemen’s accumulated organizational knowledge. The complexity inherent in this structure as you might imagine is immense. The question Mr. De Pasquale asks is “within such a chaotic and rich knowledge magma, is there a possibility to put apparently very different pieces together?” The ultimate challenge for Siemens is seeking, finding, and exploiting the hidden potential of the overall organization.

The key to creating synergistic possibilities within Siemens Mr. De Pasquale suggests lies in effective knowledge networking based on Web 2.0 technologies – blogs, wikis, communities, and the like. He refers to this platform as an Enterprise 2.0 environment. Leveraging these technologies and creating these synergies enables Siemens to identify new applications, identify new markets, and improve existing products by reducing time to market, increasing performance, and reducing costs.

The Siemens knowledge network, called TechnoWeb – which is based on technologies and support from Innocentive and NineSigma – differs from other social platforms because it focuses on the network itself (unlike LinkedIn or Xing which are people-centric, or operations like Flickr or Youtube which are object-centric). By focusing on the “network” Siemens is better able to create focused “knowledge areas”. They can dynamically aggregate information, cluster content, and create peer interactions that are both deliberate and emergent. In this environment, as Mr. De Pasquale says “innovation can spark at each level of user involvement.”

Mr. De Pasquale is quick to point out that TechnoWeb represents just one aspect of Enterprise 2.0. It is like a catalyst for innovation applied to specific Siemens context. The early success they’ve had with the network however – as exemplified by work conducted in Health Imaging and Power Transformation - demonstrates the innovation impact of the technology and overall approach. In his conclusion, De Pasquale emphasized that a continuous learning process gives more insights on where and how to adapt the platform for stronger and systematic impact, and that the overall process is one for the “long haul” even though more immediate business impact must be demonstrated to major stakeholders.

Some Great Points From the Intuit Session

Posted by Chris Andrews, Forrester Research. FEI 2010

I just attended a description of Intuit’s Lab website. This was a very interesting and engaging discussion about how Intuit developed its own internal innovation capability. While Michelle Makowski did an excellent job here describing the development of the lab site capability, I picked up on some words from Tad Milbourne at the end, about the development of Inituit’s Brainstorm capability. I took down these notes/quotes as fast as I could, because I think he told an interesting and valuable story.

The following is a paraphrase of what I heard (with some bolded parts I found interesting):

“There were five of who were full of gumption and moxy, who wanted something to make a big change [to the innovation process]…But it was not that easy to do. What we realized pretty quickly: Instead of doing technology for technology sake, we needed to focus this on the customer need and enable a process around that. So what you had was a bunch of people working on this process, who did not know any better about what could not be done, and we created a tool."

"What we eventually realized was going on was that we already had a formal innovation process, but the mechanisms were too onerous from the point of view of a typical innovator. For example, they were asking questions like “how much revenue do you expect from your idea in the first 3 years.” Not only could the innovator not answer those questions, but we thought that they were the wrong questions to ask in the first place."

"We wanted innovators to contribute out of their own self-interest. Once we cracked that [by focusing on the consumer] it spread virally throughout the organization….We’ve spend the last year or so focusing on a set of customer needs. We’re taking these learnings to heart and using them as part of our design process and pushing it all the way through to marketing."

Some great points in these few short paragraphs!


Open Innovation and Intellectual Property

Chris Andrews, Forrester Research, at FEI 2010

I just attended “Interactive and Collaborative Discussion on The Challenges of IP”. While intellectual property issues are not my area of expertise (I prefer to leave those discussions to the lawyers), I find this topic has become a very hot area of interest in the innovation space, particularly as companies have rushed –sometimes too quickly – into their open innovation models. Right now, I get many more questions from Forrester clients – particularly sourcing professionals -- about the IP issues that come up as they extend their ecosystem of stakeholders in more open, global innovation models.

A few of the points of advice I have heard on the panel:
· Take ownership of IP issues from the start as a part of the business relationship before getting the lawyers involved.
· On a similar note, understand what talent the partners bring to the relationship with regard to patents --- this provides a sense of what they do, and their IP history before moving through “all of the NDA stuff”
· Start by asking your partners: 1) do you have a patent? 2) do you have an application? 3) Are you willing to share non-confidential information?
· Using external consultants was raised as a key part of managing IP issues.

I think this session highlighted that the IP issues associated with innovation are very complex- and perhaps not easily addressed in a short session. Some of the participants came to this discussion with very specific questions from their own experience (which were valuable), but the “solution” to managing IP issues in an open innovation model is far from clear to me.

Due to the complexity of this issue, I see the ability to at least address IP management as a very valuable capability of any innovation management partner. This is something that a company I cover, Innocentive, has taken on as a very important component of their open innovation offerings. Since Innocentive helps its clients mange the relationship between companies and third party solvers, clients are relieved of some of some of the IP complexity – and that makes the relationship (and the innovation) run more smoothly.

Have thoughts about innovation management and IP issues? Please let me know. I’m in the back of these sessions typing away.
Chris Andrews
Forrester Research

FEI2010 - Increasing Value Through Continuous Open Innovation Improvement, A Panel Discussion

C. Engdahl reporting from FEI2010

Increasing Value Through Continuous Open Innovation Improvement, A Panel Discussion
Panel Moderated by Matthew Heim, NineSigma
Panelists: Blaine Childress – Sealed Air¸ Tom Esselman – Hallmark Cards, Graham Mott – Philips Consumer Lifestyle

Matt Heim, president of open innovation service provider NineSigma, led an insightful discussion as part of the FEI2010 Beyond “Open” Summit with a trio of industry practitioners – Blaine Childress, Research Scientist at Sealed Air¸ Tom Esselman, Innovation Exploration Leader at Hallmark Cards, and Graham Mott, Leader of Open Innovation and M&A of Philips Consumer Lifestyle. Their dialogue as the title of the panel discussion suggests revolved around the theme of continuous improvement in open innovation.

In listening to the panelists, it was clear as in many organizations that “open innovation” has been taking place for quite some time within these companies. No one ever called it “open innovation” though. Yet partnerships, often informal in nature, have existed within these organizations for quite some time. What’s different in today’s innovation environment is the definition, formal structure, and discipline needed to effectively perform open innovation. The global scope and complexity of open innovation in today’s world essentially requires structure and discipline. It’s worth noting each of the three companies – Hallmark, Sealed Air, and Philips Consumer Lifestyle – has partnered with NineSigma to deliver open innovation services. NineSigma has certainly helped provide structure and discipline to their efforts.

A shift is taking place. No longer can these organizations, like others, simply rely on growth based on internally focused efforts. With Hallmark for instance, throughout the ‘80s and ‘90s growth came through distribution and pricing. They were almost exclusively internally focused. And if they needed talent, they’d simply hire it, rather than partnering. The strategy worked for a while, but was not sustainable.

An interesting part of the discussion came when panelists were asked to share what could best be described as “ah-ha” moments – the surprising aspects of open innovation implementation that they didn’t necessarily expect. The most revealing insights are as follows:
- Opportunistic solutions often emerge from open innovation efforts. You get solutions that you didn’t necessarily specifically ask for.
- Open innovation creates a heightened sense of competitiveness amongst suppliers. Existing suppliers may produce novel solutions to problems you’d expect a new supplier to tackle. Existing suppliers will raise their competitive game so to speak. They don’t want to be shut out of new market opportunities and thus get more creative themselves.

Of all the talking points brought up during the panel discussion, the most compelling insight was simply that “open innovation is a necessity.” It should not be viewed as simply another ordinary process to be layered into the multitude of other corporate initiatives and duties.

Open innovation is not something where you can wave a magic wand and expect things to just happen. It requires discipline and effort. It requires a change in mindset.” - Tom Esselman, Innovation Exploration Leader at Hallmark Cards

Harnessing The Power of An Army of Innovators

Chris Andrews, Forrester Research reporting at FEI 2010

I just attended the first half of a session by John Caldwell of Leapfrog about his application of an innovation management tool (Kindling). John described what I would say is a pretty common story around using innovation management tools. John reported successes from this application – a number of new ideas generated, an increase in perception of the company as an innovator, some new product successes, and generally positive feedback on the application of the tool.

This is a good story to hear – sometimes I hear complaints about how easily these tools are applied, and the success of the programs. John was smart in a few regards:
• He acted as a manager on the project and a liaison to the business community.
• He supported his application of this tool with a big marketing campaign and appropriate idea management capabilities.
• He set up a way for ideas to be segmented and directed to the appropriate business unit areas (he did not try to take it all on himself)
• He considered the “barriers” to entry as a key part of the evaluation of his tools

I loved John’s last point about the CEO needing all of the ideas generated to be strategic. This maps to my recent reports on innovation stakeholders, which highlights the different interest areas for innovation. This point also echos a key problem raised in a later question: some ideas simple, some hard, some technical, some tactical. Its clear that, for now, technology itself is not enough to solve an organizational innovation problem -- strong management is also key!

FEI2010 - The VC & Joint Ventures Perspective

C. Engdahl reporting from FEI2010

The VC & Joint Ventures Perspective
FEI2010 Presenters: Stephen Socolof, New Venture Partners & Lisa Su, Freescale Semiconductor

During the Beyond "Open" Summit at FEI2010, Stephen Socolof of New Venture Partners, a venture capital firm focusing on corporations with spinout opportunities¸and Lisa Su, who had been the CTO of Freescale Semiconductor at the time this story took place, walked through the trials, tribulations, and ultimate success that would become Everspin Technologies.

Freescale Semiconductor, itself a spinoff of Motorola in 2004 found itself a few years back in possession of some interesting technology known as MRAM, a promising semi-conductor memory with substantial promise. Although Freescale has historically invested upwards of $100 million in basic research throughout the years to develop technologies such as this, it pondered the question of whether to further develop MRAM or somehow create a new venture around it. After much internal discussion and a comprehensive search to find an external partner, Freescale opted to collaborate with New Venture Partners to create an entirely new business.

Negotiations to form the new venture between Freescale and New Venture Partners took time. Freescale wanted a $20 million commitment from the syndicate New Ventures was forming. Financials needed to be worked out. Intellectual property rights needed to be negotiated. The process required personal commitment and patience. In the end, Everspin Technologies was formed and today enjoys a product portfolio of over 60 products. And although Everspin operates independently, Freescale remains and important, integrated part of the Everspin operation.

The telling aspect of this story is this: Although Freescale could have arguably raised the necessary capital to fund the technology development itself, Ms. Su made an insightful comment worth taking note of. In a situation such as this, “It’s not just about the money,” she said. “It’s about the focus the business demands.” Had Freescale attempted to go it alone, the MRAM magnetic semiconductor technology likely would never have grown to the success that it is today.

The Power of Social Media for Customer Driven Innovation

Chris Andrews, Forrester Research, reporting at FEI 2010

I just attended Scott Hirsch’s “The Power of Social Media For Customer Driven Innovation”. This is a topic that is near and dear to my heart, as I have followed the changing market for innovation management tools (along with some colleagues) for several years. We get a lot of questions about how social media is changing the way organizations can innovate, and there are many theories that social media is either changing the enterprise for good, or in the midst of a huge bubble.

A few points I heard during this session:
· Scott put up a slide from an analyst firm highlighting some key areas for social in the enterprise: Marketing, sales, services and support, innovation, collaboration, customer experience.
· Scott points out connectivity and mobility are changing dialog with customers
· Social media is hardly new – community forums have been around for years
· Social media tools are becoming more user friendly and pervasive and therefore more relevant to business
· Scott’s theory is that the future of social media is in social business and customer collaboration.

I agree with him on this last point – social has worked for the consumer and it’s only a matter of time before many enterprises find viable uses. But I’d say most are still in experimental mode right now, or being applied most effectively in marketing and product support areas, in CPG products or in very tech-focused startups. I think a better question is how quickly social media will find real and practical use in a wide variety of business functions, which is a much larger base of companies than Scott discussed.

As an example, putting questions about Apple products into to Google may work for consumers and certain businesses, but it will not work for my enterprise customers and IT groups, who have a broad range of other considerations to work with (huge customer sets, legacy architecture, security, etc). And I still get questions all the time from IT professionals who have recently changed or dropped their innovation management tools, because of “lack of use” or “limited business value.”

My criticism may be a disconnect in focus areas. This audience is likely more closely linked to the groups Scott is describing, than my clients (though the first question was about B2B groups). But these two group will, eventually, need to be working together, so their technologies will need to work together too.

Want to discuss this session or my post? Please find me! I'm in the back of my sessions typing away.

FEI2010 - Engaging Academia As Critical Partners In Creating Intellectual Property

C. Engdahl reporting from FEI2010

Engaging Academia As Critical Partners In Creating Intellectual Property
FEI2010 Presenter: Najib Abusalbi, Schlumberger

Najib Abusalbi is currently the Director of University Collaboration for Schlumberger Information Solutions, a business division of Schlumberger, the world's largest oilfield services provider. During his presentation as part of the Beyond “Open” Summit during FEI2010, Mr. Abusalbi outlined the philosophical and strategic approach taken by Schlumberger to address the current and future challenges in the energy sector.

Some of the key drivers in the energy sector are familiar and fairly straightforward – supply, demand, security, etc. What I found interesting early on in the presentation was Mr. Abusalbi’s acknowledgement of the enormity of the challenge and more importantly the acknowledgement that “no single company or organization can tackle the problem alone.” For this reason, Schlumberger has taken an Open Innovation stance and looks to partner with academia and other traditional for-profit organizations to create “a future with zero carbon fuels.” They’re approach has been to create an eco-system based on an open technology platform through which organizations can contribute, share, and engage one another to develop ideas and solutions. The platform is only 18 months in the making. But coupled with an ongoing aggressive strategy to engage more and more partners, Schlumberger hopes to take its initial success in developing intellectual capital, intellectual property, and thought leadership to the next level.

FEI2010 - Critical Lessons On Open Innovation, A Panel Discussion

C. Engdahl reporting from FEI2010

Critical Lessons On Open Innovation - A Panel Discussion
Panel Moderated by Stefan Lindegaard
Panelists: Chris Thoen – P&G, Jeff Bellairs – General Mills

Stefan Lindegaard of 15inno led an interesting discussion as part of the Beyond “Open” Summit at FEI2010 with corporate practitioners Chris Thoen, Managing Director of Open Innovation at P&G and Jeff Bellairs, Sr. Director Connected Innovation at General Mills. After a few introductions, Stefan began the discussion concerning open innovation by facetiously suggesting that those organizations that have a monopoly on all the smart people who may be able to impact their businesses, have no need for open innovation. For everyone else, open innovation provides a real opportunity for growth.

The new competition is not about internal knowledge and focus, but rather about an organization’s ability to reach out, partner, and develop outside relationships and subsequent products based on these relationships.” – Chris Thoen, Managing Director of Open Innovation at P&G

Why did P&G and General Mills begin to explore Open Innovation? Both companies went through a period of relative financial turmoil. Financial targets weren’t being met, leadership was changing. Open Innovation was viewed as a way to create real, sustainable value for the organization. There was a time Mr. Thoen suggests where P&G was seen as “The Kremlin of Ohio, where external ideas came to die.” This needed changing. Success depended on it.

The trio talked much about culture and change. Some key takeaways from the discussion included:
- Open innovation is a “journey”. Line up and manage expectations. Think of driving culture change over a period of years versus weeks or months
- Internal processes need to be in order before you go “open.” Frustration amongst partners will ensue if you don’t have your own processes developed
- Leverage the work of others and learn from their mistakes. Benchmark to create foundation for your open innovation efforts. Don’t reinvent the wheel, yet don’t expect competitors to share all info concerning their own efforts. Modify benchmarking information to fit your organization
- Create some early wins. Demonstrate value.
- Early in process, engage businesses to identify key performance indicators that will drive business. Use this as the basis for innovation efforts
- Align efforts with business strategy
- Don’t expect the people that are successful internal innovators to be the people that are successful external innovators. The skill set needed for Open Innovation can be different.

Open Innovation requires you to be a ‘Clydesdale’, not necessarily a ‘Thoroughbred’. It takes tenacity and a focus on early wins to be successful.” - Jeff Bellairs, Sr. Director Connected Innovation at General Mills

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