This is a presentation from May 2011 on customer-centric innovation which came up when going through our older files. It's a bit dated, but much of the thinking is still valid.
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Alain Thys So You Want To Be Innovative? May 2011 A FUTURELAB ACTION GUIDE
FUTURELAB So you want to be innovative? Prelude “Chance favours the prepared mind” Louis Pasteur
Let us start with a few questions: Why do the space shuttle engines have the diameter they have? FUTURELAB 3.
Let us start with a few questions: OK, that’s pragmatic, but why is the tunnel that width? FUTURELAB 4.
Let us start with a few questions: That makes sense, but who decided on the width of tracks? FUTURELAB 5.
Let us start with a few questions: Remarkable, but why choose this base for trams? FUTURELAB 6.
Let us start with a few questions: OK, but then why make the axes this wide? FUTURELAB 7.
Let us start with a few questions: So if the ruts lead to the cart, what caused the ruts? FUTURELAB 8.
Let us start with a few questions: Standardised imperial chariots? Where did Ceasar get that idea? FUTURELAB 9.
Let us start with a few questions: OK, but some Egyptian must have had an original idea! 2000 B.C. FUTURELAB 10.
Let us start with a few questions: And so we find the answer: it’s all because of a horse’s ass. 2x FUTURELAB 11.
Orthodoxies drive our behaviour We copy and build on what we know to work FUTURELAB 12.
Orthodoxies drive our behaviour In fact, it’s in our genes ... behaviour ... ... ways of working ... ... processes .... ... organisational structures ... HUMANS COPY FUTURELAB 13.
Orthodoxies drive our behaviour It is the secret to human success and achievement Reading and print Industrial progress Agriculture Apps FUTURELAB 14.
Orthodoxies drive our behaviour But there is also a dark side FUTURELAB 15.
Orthodoxies drive our behaviour They can fail us if the world around us changes Music industry Education Personal shame (1994/5) “Browsing is for geeks.” “No cheating.” “Blockbuster CD’s rule.” Illustration by ~Si2. Print can be purchased at www.deviantart.com FUTURELAB 16.
Orthodoxies drive our behaviour They can be based on wrong assumptions Our actions have always been driven by assumptions which everyone knows to be true. It can happen to the best of us: “God does not play dice with the universe” Albert Einstein on Quantum Mechanics Earth is flat illustration by ~Si2. Print can be purchased at www.deviantart.com FUTURELAB 17.
Orthodoxies drive our behaviour Worst of all, they can close our mind to other options • • • • We’ve always done it that way This is “best practice” That’s what everyone does Our world-view is right FUTURELAB 18.
FUTURELAB So you want to be innovative? Part 1: What orthodoxy does to innovation Tradition means giving votes to the most obscure of all classes, our ancestors. G.K. Chesterton
What orthodoxy does to innovation. No, I’m not going to talk about orthodoxy versus creativity Think out of the box! Wear a green hat! Find your inner lightbulb! FUTURELAB 20.
What orthodoxy does to innovation. I am going to talk about the orthodoxy of innovation itself Why we make it harder than it needs to be? FUTURELAB 21.
Time for an innovation renaissance Which would be the easiest route to cross this desert? Over the mountains? Through the valleys? FUTURELAB 22.
Time for an innovation renaissance Weird, most corporate innovators seem to disagree. AIRLINES BANKS COMPUTERS UTILITIES PROCESSED FOOD PHARMA Source: The Doblin Group, www.doblin.com FUTURELAB 23.
Time for an innovation renaissance Weird, most corporate innovators seem to disagree. Why? FUTURELAB 24.
Time for an innovation renaissance Innovation is driven by industrial mass production orthodoxies Industrial revolution Mass-production logic More volume Better & more features Lower costs Invention mindset FUTURELAB 25.
Time for an innovation renaissance This worked fine as long as we had room in our life for “more” FUTURELAB 26.
Time for an innovation renaissance But our world has changed – the tub is full FUTURELAB 27.
Time for an innovation renaissance Many of our innovation efforts are wasted Product parity Category overload Hypercompetition Too much choice actually reduces the preparedness of customers to make a purchase. Barry Schwartz FUTURELAB 28.
Time for an innovation renaissance We consider massive failure as the norm (orthodoxy?) “50-90% percent of innovation projects [are] judged to have made little or no contribution to organizational goals” Wikipedia, 2011 FUTURELAB 29.
Time for an innovation renaissance Our response: innovating even more FUTURELAB 30.
Time for an innovation renaissance Accepting “collateral damage” as it occurs Demotivation Stress Wasted resources Lost competitive position Complexity • • • • • FUTURELAB 31.
FUTURELAB So you want to be innovative? Part 2: Time for an innovation renaissance Anything that won't sell, I don't want to invent. Its sale is proof of utility, and utility is success. Thomas A. Edison
Time for an innovation renaissance How do these guys do it? The industrialist’s nightmare: I take a traditional industry like finance, travel or telco and slap a red logo on it. I sell overpriced, underspec’d computers and people love them. FUTURELAB 33.
Time for an innovation renaissance On innovation, they lead their people through the valleys Experience innovation Business model innovation Service innovation … FUTURELAB 34.
Time for an innovation renaissance They have let go of the old world orthodoxies “Age of Scarcity” Innovate for: More volume Better & more features Lower costs FUTURELAB 35.
Time for an innovation renaissance They have recognised we live in a different era “Age of Abundance” In mature markets It’s hard to get double-digit growth from finding new customers. It’s much easier to extend the relationship with the customers you already have. FUTURELAB 36.
Time for an innovation renaissance They innovate for relationships Enough to keep things fresh and interesting. But not too much. FUTURELAB 37.
Time for an innovation renaissance Or in business terms A compass for your consideration “Age of Abundance” Innovate for: Stakeholder Lifetime Value Better relationships & reputation Lower costs FUTURELAB 38.
An innovation renaissance Some remarkably good practices Hardware Software Infrastructure Hosting Consulting Operations ... One more thing • • • • • • • FUTURELAB 39.
Time for an innovation renaissance A “not so best” practice Every innovation poses a relationship risk. Innovate to keep your relationships fresh, but don’t overdo it. DON’T DO Innovate for growth Risk relationships How Planta almost lost me ... and still might. FUTURELAB 40.
FUTURELAB So you want to be innovative? 5 Steps to transform yourself A leader is someone who steps back from the entire system and tries to build a more collaborative, more innovative system that will work over the long term. Robert Reich
5 Steps to transform yourself Step 1: Listen, Watch and Learn Take the customer perspective ... all the way. Recommendation triggers Choice Drivers Insights Key Advice Obvious? Test yourself: “Shop your own product”. If you’re in B2C: when was the last time you really spoke to a consumer? By walking in customers’ shoes you understand how they see the world. If you’re in B2B: how actively do you manage all your stakeholder’s emotions? Georges-Edouard Dias SVP, L’Oréal Group FUTURELAB 42 16/11/2013
5 Steps to transform yourself Step 1: Listen, Watch and Learn Asset leveraging Bad profits Global inspiration Co-creation For most of us Innovation is not invention. Internal sensing Most of what you need will exist in some shape or form. Market foresight FUTURELAB 43.
5 Steps to transform yourself Step 2: Broaden your innovation horizon The Innovation Radar There are 12-15 types of innovation. Which ones are your competitors missing? Adaptation of The Innovation Radar 2.0 by J.Chen and M.Sawney of Kellogg School of Management, 2008. FUTURELAB 44.
5 Steps to transform yourself Step 2: Broaden your innovation horizon The Innovation Strategy Matrix High Opportunities for meaningful differentiation Areas to keep up or stay ahead Customer Engagement Develop a “portfolio” of innovation strategies depending on the situation. Look at the niches Copy when proven only Low Low Innovation Intensity High FUTURELAB 45.
5 Steps to transform yourself Step 3: Involve your people Innovation is a social, not a personal achievement. It does not belong in a “department”. Engagement programmes Digital (open) platforms Organisational flexibility Corporate venturing projects Innovation teams ... • • • • • • FUTURELAB 46.
5 Steps to transform yourself Step 3: Involve your people Only 5% of your workforce understands your strategy* So how can they innovate upon it? Make sure people understand what you aim to achieve Provide people with the innovation & design knowledge/tools to contribute Build an innovation movement that rewards initiative rather than ask for instant ROI * Based on Norton, D. Aligning your Strategy to the Customer Value Proposition, 13/9/2005. FUTURELAB 47 16/11/2013
5 Steps to transform yourself Step 4: Make sure you got it “right” “Failing fast” is no excuse for being sloppy. Implement a simple system that allows people to evaluate their own ideas and forces cross-functional co-operation. FUTURELAB 48
5 Steps to transform yourself Step 4: Make sure you got it “right” Simplify, so your business is able to execute. Then simplify again. The Laws of Simplicity John Maeda 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. The One Reduce Organise Time Learn Differences Context Emotion Trust Failure Food for thought: Can you “appify” your business? FUTURELAB 49 16/11/2013
5 Steps to transform yourself Step 5: Go to market to enhance relationships Experience The experience IS the product. Peter Merholz Delight Loyalty How do your innovations strengthen your existing customer relationships? Profit Racing to market is no excuse for being sloppy. Align your business as if it were the only innovation you’ll ever launch. FUTURELAB 50