Uncategorized

Marketing’s Seat at the Innovation Table

Where does your marketing department fit when it comes to innovation?  In their article1, “Improving Marketing’s Contribution to New Product Development,” these author’s offer a dismal view:

“The prevailing view in most companies is that marketing is not a distinct function, and therefore, everyone can do marketing.  As a result, the status of the marketing department is in a steep decline, which is especially observable within the NPD process.  This development is surprising because it seems that top innovators strongly involve the marketing department in the NPD process.  Hence, strengthening the marketing department’s position with respect to NPD should be a priority to improve innovation performance.”

I agree.  But I believe the authors fall way short of what is needed to do that.  Their research points to two recommendations.  First, marketing departments need to excel at market research skills and tools to translate customer needs into product specifications.  Second, marketers should have strong market knowledge and a good understanding of the firms product portfolio.

Seen this way, marketing becomes nothing more than a market research department in support of R&D.  This grossly underwhelms the potential of a strong marketing mindset within an organization and the potential for great innovation.

For marketing to lead the innovation effort, I recommend the following:

1. Develop an Innovation Competency:  Innovation is a skill, not a gift.  It can be learned by anyone and applied systematic.  Innovative companies treat it as just another core skill by creating a well-defined set of innovation competencies and embedding them into employee’s competency model along with other required behaviors such as ethics and leadership.  A innovation method such as SIT, for example, gives a marketing employee the ability to “innovate on demand.”

2. Link Innovation to Strategy:  Marketing is the battle arm of any company, and it should lead the development of strategy.  When it links strategy with the innovation efforts inside an R&D department, it becomes more influential in what gets put through the NPD process.

3. Drive Innovation as a Process:  Defining innovation as just the NPD process is too limiting.  Marketing needs to sponsor cross-functional teams using systematic innovation tools that feed concepts into the NPD process.  Marketing needs to eliminate the “fuzzy” in the front end and make it crystal clear with a routine, sustainable process of generating new opportunities.

4. Innovate Under the Radar: In this month’s Harvard Business Review, Paddy Miller and Thomas Wedell-Wedellsborg make a great point in their article, “The Case for Stealth Innovation.”  Savvy marketers know how to operate under the radar and nurture innovation programs through complex bureaucracy.  Thomas Bonoma’s classic HBR article from 1986, “Marketing Subversives,”said something similar:

“I
found that under conditions of marketplace change, success depended
heavily on the presence of marketing subversives in a company.
Subversive marketers undermined their organizations’ structures to
implement new marketing practices….And no matter what higher
management had decided to allocate to various marketing projects, the
subversives found ways to work around the official budget.  They
bootlegged the resources they needed to implement new, more appropriate
marketing practices.”

The same can be said about innovation.

1Drechsler, Wenzel, Natter, Martin and Leeflang, Peter S.H., “Improving Marketing’s Contribution to New Product Development,” Journal of Product Innovation Management, Volume 30, Number 2 (March 2013), 298-315.

Start at the End

Published date: March 4, 2013 в 3:00 am

Written by:

Category: Uncategorized

Tags: ,,,

Dave Lavinsky is a serial entrepreneur who built his own company from the ground up. His book, Start at the End, was a #1 Bestseller on Amazon just one week after it was released. The goal of the book is to learn how to work fewer hours and be efficient when working at a new job or starting a business.

For innovation practitioners, here are his top 12 tips:
1. Start at the end – if you don’t know where you want your business to go, you’ll never get there.
2. SWOT analyses are obsolete; realize there will always be threats and company weaknesses that don’t warrant fixing. Rather, focus on opportunities that leverage your strengths (SO analysis), and build your strengths further so they give you sustainable long-term advantage
3. Forget your P&L; that’s short-term thinking; need to also think longer-term; building business assets that allow you grow your business and reap better P&L later and forever.
4. If your business doesn’t have a scorecard, you will lose EVERY time. Your scorecard needs to include the detailed KPIs that underly your revenue and profit results.
5. If your business doesn’t operate without you, it’s not a business; it’s a miserable job. You must systematize your business so it works for you, not vice-versa.

Too Much of a Good Thing

Published date: February 25, 2013 в 3:00 am

Written by:

Category: Uncategorized

Tags: ,,,

Can you innovate too much? After all, new ideas fuel organic growth.  One would think an organization would be happy to have as many ideas as possible.

But not always.  Here are scenarios where over-innovating might be considered too much of a good thing.

1.  When you are over-positioned:  Too many good ideas could lead you to an extreme position in the market where you stop earning at the middle and bottom ends of the market. Most companies crave the premium end of the market, but overdoing it can backfire.

Example: Cincinnati Children’s Hospital Medical Center has done such a great job at innovating in its domain that it’s considered in the top three U.S. children’s hospitals.  Therein lies the problem.  The local market may see Cincinnati’s Children’s as so advanced and innovative that parents are reluctant to take their kids there for routine health issues – bumps, bruises, fevers, and so on.  It becomes the place to go only when their child is sick with a deadly disease – cancer and the like. Fortunately, the hospital recognized the risk and took measures to stay competitive for routine visitations.

2.  When you are under capacity: Generating new ideas puts pressure on an organization.  New ideas must be evaluated, filtered, and developed.  This takes time and resources.  People are distracted from their regular day jobs and they feel overwhelmed. Too many ideas may exceed the organization’s capacity to make sense of it all. Idea fatigue sets in

Example:  A major player in aerospace wanted to create a new digital app solution for its customers.  The app was intended to retrieve sensor data from aircraft components and relay it into a useful smartphone application.  The team slowed to a near halt.  It had collected several hundred ideas from many different sources and consolidated them into a massive database.  The team couldn’t possible manage the abundance of ideas and it was unable to move forward.

Innovating the Weakest Link

Published date: February 18, 2013 в 8:14 am

Written by:

Category: Uncategorized

Tags: ,,,

Responding to an article on why innovation is difficult, Tim Josling from Leura, Australia, wrote this to the editor of The Economist (January 26, 2013):

Another useful insight is provided by something akin to Amdahl’s law in computer design, which holds that even if some components of a system are improving, the parts that are not improving will eventually dominate the performance of that system.For example, for flights that are under 2000 miles a person will spend more time traveling to and from the airport, checking in at the airport, going through security and waiting for his bags than time spent up in the air.  Increases in aircraft speed would have less benefit that shortening the other bits of the journey time.

Well said.  In essence, this insight helps you think about the right target for your innovation efforts.  Rather than try to improve the performance of you primary component, think instead about the supporting components and subsystems around it. These parts may be holding overall performance down.  The customer realizes value from your main component, but then suffers from a lack of innovation in all the other activities around it.

This goes against conventional wisdom.  Companies like Samsung cram more and more features into their products to improve performance, a phenomena called “feature creep.”  Instead, they could be differentiating themselves by focusing on the ecosystem around their products – within what we call “The Closed World.”  In doing so, they find new, unrealized value for the consumer which they will appreciate and perhaps pay for.

The bottom line: innovating the weakest link in your product or service may deliver the most value the fastest.

Marketing Innovation: The Metaphor Tool Using the Division Pattern

Published date: February 11, 2013 в 3:00 am

Written by:

Category: Uncategorized

Tags: ,,,,

The Metaphor is the most commonly used tool in marketing communications because it is a great way to attach meaning to a newly-launched product or brand. The Metaphor Tool takes a well-recognized and accepted cultural symbol and manipulates it to connect to the product, brand, or message.

The tool is one of eight patterns embedded in most innovative commercials.  Jacob Goldenberg and his colleagues describe these simple, well-defined design structures in their book, "Cracking the Ad Code," and provide a step-by-step approach to using them.  The tools are:

   1. Unification
   2. Activation
   3. Metaphor
   4. Subtraction
   5. Extreme Consequence
   6. Absurd Alternative
   7. Inversion
   8. Extreme Effort

The trick is to attach a metaphor in a non-obvious, clever way.  The process is called fusion, and there are three versions:  Metaphor fused to Product/Brand, Metaphor fused to Message, and Metaphor fused to both the Product/Brand and Message.  Here is an example metaphor fused to the message:

What's clever about this commercial is
its use of the Division pattern, one of five that form the basis of the
product innovation method, Systematic Inventive Thinking
Division works by taking the product and/or one of its components and
dividing it physically, functionally, or in a way we call 'preserving'
where each portion maintains the characteristics of the whole.  By
dividing the news about her affair with her husband's best friend into
one word at a time, the wife softened the impact.  Banco Continental uses
this little story as a metaphor for breaking loan payments into smaller, more
manageable amounts.

To use the Metaphor Tool, start by
defining the message. Then create a list of symbols (objects, images, or
concepts) that are directly related to the message (a metaphor). Next
make a list of the product's components or components near the product
(Closed World). Finally, choose a symbol and a component and fuse them
together. Create various combinations of metaphoric symbols and
components to find candidates that have that element of surprise or
cleverness.

The Fabulous Five: Loyalty Factor

Published date: February 4, 2013 в 3:00 am

Written by:

Category: Uncategorized

Tags: ,,,,,,

Loyalty is defined as a strong feeling of support or allegiance. Companies fight for it because it correlates well to product sales. The Fabulous Five (Google, Amazon, Apple, Samsung, and Facebook) are waging a spectacular battle against each other to earn customer loyalty.

A key to winning is to understand the types of loyalty. Professor Christie Nordhielm describes three types as part of her marketing strategy framework, The Big Picture:

Heart Loyalty is a strong emotional involvement with a particular brand. When a customer says, “I love my Macbook Pro,” they are exhibiting heart loyalty. We see this type of loyalty for “badge” or “neck-tie” products, products that are consumed in public and are thought to reflect something about the nature or identity of the person consuming them. This type of loyalty is very difficult for competitors to challenge because it is highly personal and emotional in nature and thus, resistant to rational appeals. Because a product choice based on heart loyalty is tied up with the consumers’ identity and ego, a competitive challenge to this choice can be perceived as a personal affront to the consumer. Heart loyal consumers don’t like to be told they should switch.

Innovation Sighting: Apple’s Smart Shoe

Published date: January 28, 2013 в 3:00 am

Written by:

Category: Uncategorized

Tags: ,,,,

A tell-tale sign of the Attribute Dependency Technique is the word “smart” in any product description. Apple’s new patent for ‘smart shoes’ is a case in point.  As reported by PSFK:

Apple has patented ‘smart shoes’ that would come with embedded sensors
to track your activity and tell you when you needed a new pair. Instead
of wearing an additional sensor, people would just have to wear the
shoes, where the technology would be less visible and be a more seamless
part of your lifestyle than an external tracker.

Apple’s shoe wear-out sensor would either feature as a thin built-in
layer or be located in the heel. It would include a processor configured
to measure the use of the shoes and determine whether they were worn
out, and an alarm that informed the wearer when they were no longer
providing adequate protection for their feet.

As first reported by AppleInsider, the patent described three main
components: a detector for sensing how worn-out the shoe becomes, a
processor to measure the shoe’s use, and an alarm to inform the owner
when the shoe’s time is up. The chosen sensor could be anything from an
accelerometer or pressure sensor to a pedometer or piezoelectric flexing
sensor.

Attribute Dependency is one of five techniques of the corporate innovation method called SIT (Systematic Inventive Thinking).  It differs from the other techniques in that it uses attributes (variables) of the situation rather than components. Start with an attribute list, then construct a matrix of these, pairing each against the others. Each cell represents a potential dependency (or potential break in an existing dependency) that forms a Virtual Product. Using Function Follows Form, we work backwards and envision a potential benefit or problem that this hypothetical solution solves.

This isn’t Apple’s first (or last) use of this powerful technique.  Apple earned a patent described as an “apparatus and methods for enforcement of policies upon a wireless device.”   It reveals a way to change aspects of a mobile device based on certain events or surroundings.  Given this pattern of using Attribute Dependency, it would appear Apple makes regular use of this technique and perhaps the full suite of SIT tools.

The Fabulous Five and the Scramble for Territory

Published date: January 21, 2013 в 3:00 am

Written by:

Category: Uncategorized

Tags: ,,,,,,

Google, Apple, Facebook, Samsung, and Amazon are in a mad scramble to enter new territory and cover gaps in their strategies.  The one that gets ahead and stays ahead will earn bragging rights in what may be the most significant business battle of all time. These companies are the Fabulous Five.

Let's look at how each company is placed in the following domains: hardware design and manufacturing, software development and integration, consumer retailing, mobile, voice and digital communications, social, search, and entertainment.  Why these?  I believe the company that covers the biggest footprint across these domains and integrates them in a way that touches the most consumers will become the dominant lifestyle company.  Notice I did not call it B2B, B2C, or even the dominant tech company.  The battle being fought here is to become a part of the consumer's life in a way that allows the company to learn key insights that can be monetized.  It is the battle for the consumer subconscious in a way.

Here is where I see them today:

Slide1

No one should be surprised to see Google and Apple covering more territory than the others.  But notice the lack of coverage by Facebook. More than the others, the pressure on Facebook to enter new territories must be enormous.  That might explain its most recent announcement about Graph Search, a capability that will rival Google.  Here is an excerpt from CNET:

After nine years of colonizing the globe and corralling a billion people, Facebook has found a way to unlock the potential of its massive data collection — a basic semantic search engine that will let it build smarter services for travel, food, recruitment, dating and other verticals that will generate revenue that could rival Google's.  Graph Search is the beginning of the Enlightenment, the next major phase in Facebook's history, in which people gain the "power and tools to take any cut of the graph and make any query they want," as CEO Mark Zuckerberg said during the product launch event at Facebook's Menlo Park, Calif., headquarters earlier this week.

Graph Search is about providing answers, extracted from the data your friends feed into Facebook. It's not Web search, which typically generates a series of links for a query, with the exception of current stock prices, weather  and many other standard queries. But Graph Search is limited in scope and usefulness at this stage. It is in a beta phase that will last for many months.

Facebook will no doubt continue to enter new domains.  Its move into Communications with a Skype-like app is hardly enough, and one wonders whether it will make a move to acquire Blackberry.

Also notice the thin coverage in territory by Amazon.  Don't count them out just yet.  Amazon is also a viable contender for a Blackberry deal, and it has the resources to enter more domains.  The areas of Social and Search seem to be the most glarring ommissions.

Samsung has gaps, too.  It desparately needs its own operating system so it can break the chains with Google.  They are certainly headed in that direction given the announcment at CES about Tizen.

Pound for pound, Google has the others beat in terms of collecting monetizable insights.  But the price point for that data is low (for now) especially when you compare it to the premium prices (and margins) of Apple products.  High margins fund future projects.

The battle is far from over.

The Fabulous Five

Published date: January 7, 2013 в 3:00 am

Written by:

Category: Uncategorized

Tags: ,,,,,,,,

Five

companies are slugging it out in what may be the most competitive and
unique business battle of all time. It is larger in scale with more at
stake than battles in other industries including transportation, energy,
and finance.

More
remarkable is how different the combatants are from one another.
Instead of similar companies competing (Toyota versus General Motors,
for example), these companies hail from different business bases: an electronics manufacturer, a lifestyle computing company, an
online
retailer, a search engine, and a social network.  In order: Samsung,
Apple, Amazon, Google, and Facebook.  I call them the Fabulous Five.

What
are they fighting for? They are fighting for the right to define what
they are fighting
for. It is a category yet to emerge.  The battle is about who can get
the largest numbers of customers that generate deep
and meaningful insights.  Each company wants a massive following of
human beings using their products
and services in a way that generates monetizable information twenty four hours a day, seven days a week.  Each of the
Fabulous Five has a strong and growing foothold to do exactly that.

What
about traditional powerhouses like Microsoft?  Microsoft fell behind and is trying desperately to catch up with acquisitions
(think $8.5 billion for Skype).  Microsoft will regress into a word
processing, server, and gaming company.  Blackberry?  RIM lost one million
customers in the last three months of 2012.  Motorola? Sony? HP? Yahoo?  They
are watching the battle from the sidelines. PC’s
are becoming irrelevant as the tablet and smartphone takes hold.

That
said, there are some potential challengers to the Fabulous Five.
Twitter, for example, has an impressive subscriber base generating 500
million tweets a day that are being archived
by the US Library of Congress.  Despite the enormity of Twitter, it has
a serious gap.  Twitter (the company) lacks a way to own the insights
being generated.  Twitter is just an advertising portal.  More
concerning is the Fabulous Five can encroach this space fairly easily.
Some already have.

Which of the Fabulous Five will win is not a matter of financial resources.  What matters is their core competencies and their ability to stretch those into other domains.  More important is what each company learns about consumers to stretch further.

Who has the advantage?  Let’s look at sheer size and scope of each.

Google averages
nearly five billion searches per day.  Insights about keywords used to
search the Internet are extremely valuable.  Google learns what it takes
to make websites search engine friendly.  It sells that to companies
who want their websites optimized.  Google’s Droid operating system
gives it presence in smartphones.  Now they seek ways to stretch into
consumer electronics.

Amazon leads the nearly $300 billion online retail space.  It had nearly 8 million unique visitors on one day
(Black Friday).  Amazon learns how people shop, how they compare, and
what they are willing to pay across a wide range of consumer products.
It is stretching itself into the smartphone arena.  Amazon will continue to make bold moves.

Facebook
has over one billion users.  Despite all the criticism about its
privacy policies, Facebook has an enormous advantage in learning how
people socialize, communicate, and visualize their relationships.  But
it lacks a smartphone, entertainment platform, and shopping presence
that others have.

Samsung leads in technology development the way that Apple leads in design.  Samsung is well managed and aggressive.  It has massive resources
to put hundreds of millions of handheld units into any region of the
world.  The question is what they do with it – how much of the
information stream will come from the unit versus the operating system
within that unit.  Samsung knows it needs its own smartphone operating system to compete with Google.

Apple
is the most valuable company on the planet with a fiercely loyal base of
customers across every demographic.  It wins on design, integration,
and service.  More than the other combatants, Apple cuts across a wider
swath of a person’s daily life. Its next strategic move will likely set
the tone for the next wave of battles.  Fierce patent skirmishes with Samsung and others will subside so they can all focus on with the real battle – earning loyalty and staying relevant.

The
common theme for all five is innovation – the ability to stretch
into other domains and create new value systematically.  The choices they make to compete will be topics of future blog posts here.  2013 is
sure to be a milestone for this epic battle.

Get our innovation model that has worked for 1000+ companies.

    No thanks, not now.