Посты с тэгом: practitioner

Great Innovators Focus More on Post-Purchase than Pre-Purchase

Published date: May 30, 2016 в 6:20 pm

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What products or services have you purchased that are your absolute favorites? Can think of a few? My bet is that you can think of a few because those products did everything and more than what you expected. Your satisfaction after consuming those products is very high. That’s one reason why the last step of the buying process, the post-purchase phase, may be the most important in the study of consumer behavior. Let’s learn more reasons why and what you as the innovator can do about it.
First, think about what’s going on in the consumer’s mind at this point in the process. They were motivated to buy a product, they used all their skills and knowledge as a consumer to properly research it and do the purchase. They have a lot of time, money, and emotional commitment to this product. And now they’re home, and there’s the product, almost staring at them out of the shopping bag. Remember our discussion about risk? The consumer is thinking: did I do the right thing? Will this thing work the way I wanted it to work and will it be worth the money I paid for it? In other words, the consumer already has already formed a basis for evaluating the product’s performance. A yardstick so to speak.
When they actually use the product, three things can happen. The product works better than expected. It delivers additional benefits they didn’t know about or it delivers expected benefits better than they expected. If that happens, the consumer reaches a state we call “delighted.”
But if the product works in a way that exactly matches their expectations: no better and no worse. In that case, the consumer will be satisfied with the purchase.
Of course, we’ve all had the experience where the product or service performs lower than expected. Now there are two things that can happen here. One is the customer just accepts it as is. In this case, the product has reached a minimum level of performance to keep it, but just not what they were hoping for. Or, worst case, the consumer will be dissatisfied. It performs below even the minimum acceptable level.
Where a customer lands is critical to the innovator because it will affect whether they repurchase the product, whether they complain about the product, and how they give word of mouth advice to others about the product, positive or negative. You, as an innovator, have a role to play no matter where the consumer lands.
If customers are delighted or satisfied, consider doing the following. Congratulate them for making a great choice. People like being reminded what good consumers they are. Also, this is the time to take credit for delivering on the brand promise. This is also a good time to ask them for a testimonial or to post a positive comment on social media. And finally, make sure it’s easier for them to repurchase the product. Perhaps give them a special order line or a trial discount on future products.
If the customer is dissatisfied, try to find out why? Were their expectations too high because of some misinformation on your website? Did the product fail or did they use the product the wrong way? People will complain if two conditions are meant: they believe the problem was somebody else’s fault other than their own, and they believe the complaint will result in some action. People won’t waste their time otherwise.
Truth is you want complaints because that gives you as the innovator a chance to get in there, make it right, and salvage the relationship. The worst situation is they’re not totally satisfied, and they just disappear.
Great innovators pay the most attention to the post-purchase phase because after all, that’s the moment of truth on whether you’ve created and kept a customer.

Want to Innovate? Make Sure You Have a Seat at the Table

Published date: May 23, 2016 в 6:22 pm

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For most companies, the top marketer, usually called the chief marketing officer, is part of the senior leadership team and sits on the executive committee or management board. In other words, marketing has a “seat at the table.”
But here’s the challenge. If you let things slip in terms of your team’s skills and effectiveness, you’re going to lose that seat. If marketing is seen as weak or ineffective, over time, other departments will slowly start stealing away your responsibilities. If left unchecked, your department will dwindle, leaving your team little more than a sales support function.
Here are some examples. Imagine you have a talented marketer in your department who handles sales forecasts used by manufacturing to decide how much product to make. She leaves to take another role, and her replacement is just not as good. Eventually, the manufacturing team will step in and take over forecasting. Hey, they’re doing it because they need to get the job done.
This could happen in other areas. Pricing could go to finance. Product development goes to R&D. Distribution slips away to the supply chain group. Marketing promotions goes to Corporate Communications, and so on. You’re left with a bunch of junior marketers who do nothing but create sales aids. Not good.
The biggest challenge is that many people believe that anyone can do marketing. Other groups see the marketing department as a great development opportunity for their staff.
For example, the national sales manager wants to give division sales managers new challenges and experiences. They apply for a job in marketing despite having no marketing skills. Other departments do the same thing. Over time, you end up with a marketing department that, by design, is operating at less than 100% effectiveness. You’re in trouble.
Here’s what you can do about it. First, you have to build a marketing department that is seen as having a strong core – it has solid people, strong processes, it meets its obligations, and it positions itself as leading the charge against the competition. That means you have to focus on getting the right talent and building competency within your team.
You have to create an amazing team of people with leadership skills so other departments see marketing as the hub of all company activity.
You must change people’s perception of marketing-as-a-cost-center to marketing-as-an-investment- center. Money spent on marketing will yield a sound return on investment. That means you have to deliver on your promises.
So evaluate your current situation, your talent pool, and your responsibilities. Create a plan to build a strong marketing core. Then go and get back that seat at the table.

Innovators: Beware the Hindsight Bias

Published date: August 31, 2015 в 3:00 am

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Imagine you’re testing a new innovation to see if it can work for your business. You’ve been told by experts that there’s only a 20% chance that it’ll work in your situation. But, something inside tells you it might work. You say, hey, it’s worth a try. Let’s go ahead.
Sure enough, it works! You’re thrilled, and you so say “I knew it all along!” This is good news, and you know that your boss is going to love it, too. So you rush in and sell the idea to the boss and the rest of the team.
Everyone’s excited about the roll out of the new concept. You’ve spent a lot of time and money, and today is the big day. Then, the unthinkable happens. It doesn’t work. How could that be. You try it again, no good. You keep trying it over and over. It works a few times, but for the most part, nothing.
When you look back at all your attempts to use the concept, you realize that it worked…only 20% of the time, exactly what the experts told you.
So what happened here? You were guilty of a bias that we all have called The Hindsight Bias. Hindsight bias, also known as the “knew-it-all-along effect”, is the inclination to see events that have already occurred as being more predictable than they were before they took place. Hindsight bias causes you to view events as more predictable than they really are. After an event, people often believe that they knew the outcome of the event before it actually happened.
Hindsight bias can cause memory distortion. Because the event happened like you thought it would, you go back and revise your memory of what you were thinking right before the event. You re-write history, so to speak, and revise the probability in hindsight. Going forward, you use that new, higher probability to make future decisions. When in fact, the probabilities haven’t changed at all. That leads to poor judgement.
Hindsight bias can make you overconfident. Because you think you predicted past events, you’re inclined to think you can see future events coming. You bet too much on the outcome being higher and you make decisions, often poor ones, based on this faulty level of confidence.
To avoid hindsight bias, keep these pointers in mind:

  • First, the future is not predictable. When you start to think you can predict it, remember, everyone else thinks they can too. Someone is always wrong.
  • Make decisions based on what the data says is likely to happen, not based on what you think is going to happen.
  • If you make a prediction, and that prediction comes true, don’t revise the odds because of the outcome. The probabilities haven’t changed.
  • Finally, always lay out a plan of action before you start any initiative. Include in that plan any data or expert advice about possible outcomes for the initiative. That’ll help keep you honest at those times when you think you have a magic crystal ball.

Five Industries Ripe for Innovation

Published date: December 30, 2014 в 10:54 am

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The economic outlook for 2015 is, by most accounts, “slightly better than 2014.” That, of course, depends on what industry you’re in. For some, that outlook could be a lot better with an injection of good, old fashioned innovation. Here is my short list of five industries most ripe for innovation in 2015.
1. Commercial Aerospace: I may be biased because I’ve worked in this industry, but I’ve always considered the aerospace industry the most complicated and difficult of any. Think about the conditions that airlines, for example, work under. They’re heavily regulated, union intensive, recession sensitive, fiercely competitive, fuel price sensitive, and operationally complex. Putting thousands of full airplanes safely in the sky everyday is no small feat. And it’s not just the airlines that face challenges. The aircraft and engine manufacturers like Airbus and GE face enormous technology and business risk when building new equipment.
It’s these challenges that make the aerospace industry ripe for innovation. Tight constraints are a necessary condition for creativity, and this industry has it more than any. We should expect a significant focus on innovation from this sector next year, especially in creating many small, incremental innovations rather than seeking the big disruptors.
2. Pharmaceutical: The pharma industry has many of the same attributes as aerospace in terms of the regulatory scrutiny and long lead time development risks. But this industry has been turned upside down by a series of independent events. Changes in how new drugs are discovered, the shift to generics, the move to personalized medicine, and the shrinking pipeline have conspired to create the “perfect storm” for this industry. Drug companies are moving past just hoping for a billion dollar, blockbuster drug to save them. They need to find relevance beyond the prescribers and pharmacies that dispense their products.
We should expect to see big pharma companies innovate across the entire value chain, from pill manufacturing all the way into the patient’s home. Big brands what to become a household name, not just an clinical industry name.
3. Food: Pressure on this industry isn’t just from the FDA and other regulators. Consumers are on high alert like never before about what they put in their mouths. It’s not hard to see why. The obesity epidemic has tainted our image of sugar, once thought of as sweet, but now seen as deadly and addictive. Constant media reports about food poisoning and listeria outbreaks make consumers nervous and suspicious. Changing consumer trends in taste and ingredients create a moving target for ingredient makers and food processors. Even Bill Gates has weighed in on the need for innovation in this industry, noting that our approach to food hasn’t changed much over the last 100 years. “It’s ripe for innovation.”
I expect to see the big food companies like Kraft and Cambell’s step up their innovation efforts in everything from manufacturing lines, packaging, and retailing. Like the pharma companies, they need to bring more relevance to the consumer once the product reaches the home.
4. Higher Education: Like aerospace, this industry is a hot button for me because I’m in it. Universities are under constant scrutiny, from outside and from within, about the many challenges they face. Type into Google, “the problem with universities” and you’ll get 200 million results. What’s interesting about this industry is how long it’s been around, how well understood the problems are, yet how difficult it is to make progress. The university model faces issues around the tenure system, the role of a university in terms research versus teaching, and most importantly, relevance – are universities producing the right product for our society, or have they become so insular and out of touch in preparing students?
We should expect to see more innovation outside of the university model that will put pressure to change inside. New educational models, social learning, corporate learning resources, and revised expectations of the consumer about college and its costs will isolate universities to the brink of change.
5. Consulting: Consultants can be their own worst enemy in forgetting to take care of their own business model while working to improve their client’s. As with the other ripe industries, market forces are causing cracks in the seams of this one, too. The biggest change is transparency. Consulting firms used to live behind a shroud of brand reputation, where executive selected a consultant to reduce risk to their own stock. Now clients want to see more of what goes on inside, and it is changing the way they hire consultant, pay them, and use them. Customers don’t want to pay too much for features they don’t value, especially when they have unprecedented access to the same information and Big Data as the consultants.
We should expect consulting firms to innovate new ways to deliver faster results, and to take more accountability for those results.
Bring on 2015!
 
 
Copyright 2014 Drew Boyd

Innovation Prosthetic

Published date: July 5, 2010 в 3:00 am

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An innovation tool is a cognitive prosthetic that helps individuals and groups overcome their human limitations to innovate more capably.  Just as an artificial limb or hearing aid compensates and augments a missing or impaired part of the body, a thinking tool does the same – it compensates and augments for a variety of cognitive deficiencies in all humans.

Yet there is an aversion to using a structured tool to be creative:

  • The Arts:  Musicians, poets, and graphic artists shun the idea of using a standard tool or template because it makes them appear less creative to their fans and the public.  But consider Paul McCartney who sold more albums in the U.S. than anyone.  In his biography, he confided:  “As usual, for these co-written things, John often had just the first verse, which was always enough:  it was the direction, it was the signpost and it was the inspiration for the whole song.  I hate the word but it was the template.”  Listen carefully to artist, Jackson Pollock, describe his approach:

    • The Sciences:  People in deep scientific fields such as pharmaceuticals and nano-technology are skeptical of thinking tools because it diminishes their sense of intellect and brainpower.  Given their heavy emphasis on research and discovery, this is not surprising.  They default to the Scientific Method.  But consider a rather successful scientist named Albert Einstein.  He used a thinking tool called mental simulation to discover the special theory of relativity.  He imagined traveling through space next to a beam of light:

    • The Corporations:  High achievers resist the use of structured techniques because it makes them appear weak to their intra-firm rivals.  Executives prefer to use their intuition.  They trust it because it has gotten them far. But more executives are recognizing the value of educating their intuition by using patterns and thinking tools to augment their experience.  They use a prosthetic:


For practitioners, using an innovation prosthetic is a no brainer.

Kill Your Innovation Champion

Published date: April 5, 2010 в 2:00 am

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Here are five things companies need to do to develop the organizational structure, culture, and incentives to encourage successful innovation:
1.  Kill Your Innovation Champion:  It seems like a great idea to establish an “innovation champion” – responsible and accountable for driving innovation within the organization.  In reality, it stifles innovation.  Assigning a champion lets everyone off the hook.  Why innovate when we have our “champion” to do it ?   A study by the Association of Innovation Managers found that when companies assign innovation champions and establish separate funding, it threatens the R&D and the commercial departments.  “This kind of sponsorship opens the door for subtle forms of sabotage if the established business units believe that the innovation funding is inhibiting their ability to accomplish short-term objectives and take care of current customers. Without involvement, the commercial arm of an organization can also claim no responsibility for success or be blamed for failure.”  Instead of relying champions, a better approach is to encourage “innovation
subversives.”
If you won’t kill your champion, no worry – they will go away on their own.  The study also looked at what puts innovation managers at risk.  Of the 15 innovation champions in the study, 10 left their organizations and became consultants, 4 joined smaller or start-up companies, and 1 retired.  None returned to a Fortune 500 company.
2.  Don’t Give Credit for Good Ideas:   Tanya Menon from the University of Chicago describes the paradox of an external idea being viewed as “tempting” while the exact same idea, coming from an internal source, is considered “tainted.”

“In a business era that celebrates anything creative, novel, or that demonstrates leadership, “borrowing” or “copying” knowledge from internal colleagues is often not a career-enhancing strategy. Employees may rightly fear that acknowledging the superiority of an internal rival’s ideas would display deference and undermine their own status.
By contrast, the act of incorporating ideas from outside firms is not seen as merely copying, but rather as vigilance, benchmarking, and stealing the thunder of a competitor. An external threat inflames fears about group survival, but does not elicit direct and personal threats to one’s competence or organizational status. As a result, learning from an outside competitor can be much less psychologically painful than learning from a colleague who is a direct rival for promotions and other rewards.”

3.  Fire the Lone Innovator:  Innovation is a team sport.  Keith Sawyer in his book, Group Genius highlights one of the most significant aspects of successful innovation – that groups of people are likely to be more creative than individuals working on their own.  A properly facilitated approach with a carefully selected “dream team” of employees yields innovation sooner, better, and bolder than the lone genius.
4.  Teach Innovation:  Innovation is a skill, not a gift.  It can be taught using structured innovation processes and templates.  Many universities offer courses and programs to learn innovation.  It is unacceptable that a corporation seeking growth through innovation would not have its employees properly trained in the skill of innovating.
5.  Build Innovation Muscle:  The best companies see innovation as an ongoing capability, not a one time event.  These companies work hard to build muscle around this capability so they can deploy it when they need it, where they need it, tackling their hardest problems.  Companies do this to keep up with the ever changing landscape both inside and outside the firm.  What does it mean to build innovation muscle?  I think of it as the number of people trained, the frequency of using an innovation method, and the percentage of internal departments that have an innovation capability.  Call it an Innovation Muscle Index:  N (number of trained employees) x F (number of formal ideation events per year using a method) x P (percent of company departments with at least one employee trained in an effective innovation method).   Innovation Muscle Index = N x F x P .

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