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Success factors for high ROI innovation

. PeteW

In a slow economy, the traditional and the mainstream organization retreat from the new and untried. The pendulum swings to efficiency (often at the expense of validity or long term effectiveness).

Innovation can be seen by some, who are under even greater pressure with fewer resources, as taking the focus off of what an organizations does best. For others, however, the slowdown is an opportunity to refocus--not on what's working well now, but what needs to be working well in the future.

Here is a practical, working definition of innovation: a capitalization on new business opportunities through new products, services, processes or experiences. New ideas that cannot be tied to business opportunities may be wonderfully creative, but ultimately inert in terms of capitalization, and so fails this working definition.

Opportunities are situations that afford both a chance to create value for someone or something at a profit in some new or unique way, and a chance to achieve and maintain a position of competitive advantage.

At the end of the day, innovation isn't about more ideas, it's about better ideas.

It's also about people for the simple fact that innovation doesn't happen in a vaccum. It's not enough to discover an opportunity and define a great idea. We need to bring people to those ideas in order to get momentum.

With these ideas in mind, I thought it may be useful to share some thinking and examples in the world for how best to generate value via innovation.

First, there are some common characteristics for organizations which have the highest return on their investment in innovation. You can see examples of them here

  • unofficial activity
  • external collaboration
  • internal connectivity
  • combination innovation (connecting ideas, technologies, and business models to intentionally create innovation)
  • resourcing
  • preconception awareness

You can dive into these concepts here at this short Harvard Business Review article:


Next article--types of innovation.


Co-Design: finding what's underneath an idea

. PeteW

I was leading a number of co-design sessions recently where we had different people co-creating the future of connectivity in the places and spaces they live and work. Roughly speaking, the purpose of co-design is to design with people and immerse with them as they take a particular problem in their lives and ideate solutions around it. The opportunity for design and business, however, is in exploring the solutions being created. People speak in terms of solutions to problems--that's only natural. The real value, however, is in understanding their problems in a deeper and more meaningful way. Why this solution and not that one? What would a particular solution do? What specific aspects are unique and important to a solution? At the end of the day, it's an opportunity to discover details around use, trust, and situational needs. As a business that creates solutions, co-design provides an opportunity to look at ideas in a deeper way, understand the problems they came from, and design new, unique, and relevant solutions. As designers, product managers, and technologists we know what is possible (that's not the job of the customer). Designing with customers helps us focus and find possibilities that would otherwise be invisible.

Customer Experience

. Iga

Intelligentsia's barista prepares coffee - Turkish style.

I can say with certainty that I am a coffee connoisseur. And it’s not only about craving of the daily fix, I do like the whole going-to-a-café and hanging-out-there experience. I love the creative ambiance and the social randomness of it.

Fifteen years ago when I came to America Starbucks was it for me – of course, after I had to get used drinking my cappuccino from a paper cup. But I remember how much I loved (after a 20 minute drive to the nearest one), getting inside the café, standing in looong lines, smelling the fresh ground coffee, overhearing conversations, making random chats with other customers, then sitting down with a fresh, steamy cup of my own and having a meaningful conversations, or just reading something that always ended up inspiring me. Sometimes, I just loved watching people enjoying themselves, having their first dates, or business meetings. This was an experience! A point of destination in my daily routine. From the flavor of the coffee to the people and the whole surroundings, this was to me well worth those thirty five bucks a week.

Well, that was 15 years ago. I don’t go to Starbucks anymore, maybe once in a while a grab a cup of hot tea, but the truth is I stay away from their coffee. It wasn’t for a financial reason. What happened is that their business decision at some point impacted my experience as a customer in a negative way, and all of a sudden I realized that this was costing me too much money for what I was getting. They became victims of their own success and adapted a fast food approach to coffee, something I can get everywhere. They went after total expansion, speed-to-market and convenience tactics. That impacted the way they service their customers. They stopped pulling their shots, espresso is now made from pre-made syrup, there is no aroma of fresh coffee, no random conversations with friendly strangers (because the service now is much faster), comfy chairs were replaced for the most part by wooden ones, the music is different, fireplaces are gone, life music is gone, and it’s just not the same. Especially the coffee itself. In the process of streamlining they have lost the charm and the flavor I was after. Even if the coffee was $1, I wouldn’t come back. It’s not about the money, it’s about the experience.

You might make an argument that Starbucks is still very profitable. That might be true, although a quick google magic gave me an insight that their traffic is dropping, but their revenue has little to do with customer satisfaction and more to do with global expansion.

Today, I found myself in a bustling, urban, boutique café waiting for my 6 oz. cappuccino a good 10 minutes, which for a coffee addict is an eternity. I was watching baristas doing their elaborate routines and people being called by their first names when their cup was ready. There was no empty seat. The place was packed with tiny groups of people eagerly discussing their issues, or simply enjoying the moment together. The aroma of freshly ground beans was delightful, and the people were smiling and making small talks with strangers. In coffee business preparation and brewing method are the things that make the coffee. Cutting corners on the process or time it takes to brew – something that Starbucks did – simply will affect the quality, from aroma and texture to the taste. Despite having to stand the whole time I was at the cafe I walked out somehow relaxed with a tiny cup in my hand. The hand made flavor was the best in the world. I had the haute couture of coffee with a leaf pattern on my foam for only $3.61.

So, what is my point here? The customer’s (total) experience is more important than any business decision that is going to impact that experience. In my industry, we often throw around phrases like “customer-centered” design, or solution. First, it is imperative to really understand what constitutes a good user experience. Second, you always must think like a consumer and react to your own solutions as if you were a shopper. The moment you start rationalizing things for the business, you are going to miss the point. In this day and age the customer always wins. Always! We are more held accountable for upsetting a VP at work, than for loosing a customer. The people who are driving financial goals of the company don’t consider the experience of an individual customer, or whether the expansion tactics are relevant to a shopper in any way. The business isn’t concerned with what the customer wants, the business wants to make money. But ultimately, it is the customer - one by one - who controls the money. Therefore customer controls your business. The business should support customer experience efforts and stop engaging in short-sighted tactics that miss the point.

The Social Network

. wandereye

As part of research, some members of the UXSears team went to see The Social Network. On my way to work today, I checked in per my routine to the Huffington Post and found their treatise on the movie. While I agree with many of the points made in the article I was shocked to find that the writer and many of the people interviewed seemed to miss the point that the movie was based on the book "The Accidental Billionaires," by Ben Mezrich and was a fictional portrayal; not an actual documentary of the life and times of Mark Zuckerberg. Mark is a reference point used to portray larger themes.

The point of the movie could well have been about the "revolutionary" nature of Facebook and how it changed the way we use the Internet. But it wasn't. And thank life for that. Despite what the Post says, that tact would have been disastrous for many reasons—among them the fact that Facebook was not revolutionary but incremental in changing or evolving the way we interact on the Internet in a "social" context and took advantage of the many failures prior to it's release in ways that the others had missed. Having been with the world wide web since the first browser and well before the first browser, I've never considered the world wide web to be anything but social. From UNIX's "phone" to AOL instant messaging, the internet was always about sharing, was always a communications channel. What Facebook did to the social networking scene many prior to it failed in key ways. Think geocities. Think Friendster. Think Hi5. I can name others like MySpace or YahooGroups. There was a fateful convergence that Zuckerberg was fortunate to coincide with in terms of technology and culture. Much like Jobs and Gates were in the right place at the right time, so was Zuckerberg. If any of the "points" were missed, it was that. 

Sony Pictures is in the entertainment business. Entertainment is sometimes controversial. Fiction is fantasy. And Hollywood, despite what we all think, is not (or rarely is) in the business of truth. It was refreshing to see a well-crafted, well-executed movie that made me think for once. We're all tired of hearing about "social networking" as much as we're tired of the "greenwashing" of the early part of this decade. The score was amazing, the acting over the top and the cinematography breathtaking. I can't say that about many of the thousands of movies that have come out of Hollywood in the last 100 years. The movie was a vehicle for some fundamental human condition messages:

1. Never forget who your real friends are
2. Trust no one in Silicon Valley—especially if they are "angel investors" or "venture capitalists"
3. Drugs and drinking are bad, okay?
4. "Luck is when opportunity meets preparation" — Bob Evans (not the sausage maker but the producer/director)
5. Money will never buy happiness

Social networking as a phenomena would be an easy target and a moving target. It's still evolving as I type this. But like any platform or system, it is a means to an end that empathicaly supplies a conduit to a real human want/need in ways that facilitated human behavior. In my case, social networking has evolved into a form of collaborative scrap booking. It's a place like the "livejournal" we see in one of the opening sequences. Only it's more fun, more interactive and engaging and the content is not supplied from nerds alone but people who would normally not use blogging, platforms, technology, to present themselves to the world. 

If anything, the "rift" between Hollywood and Silicon Valley that is cited in the Post is about a larger view of a small world. Us technologists tend to live in a virtual vacuum of assumptions, sitting too close to our perspective to see that real human beings with real stories, emotions and human wants and needs use our creations in ways we would never have dreamed of. Hence, the last quote that comes to mind, one that the director executed perfectly both visually and literally:

"To define is to kill. To suggest is to create" — Stéphane Mellarmé

SHC Digital Summit

. andrew

Attending the Sears Digital Summit today at MPG. Working more closely with our brethren in the full-line store marketing team will only make us stronger/better/faster, just like the six million dollar man (great show by the way). We are talking about re-marketing to consumers, leveraging cookies and serving relevant ad units based on the consumer's actions/behaviors/traffic patterns. Also talking about leveraging dynamic ad generation for this, which is something we need to build for Sears.com. Tackling data analytics to deliver more relevant/accurate advertising to consumers. In the afternoon we are going to cover social games, local/social platforms and mobile all from a marketing perspective. What I think will be key will be how all of this leads to sales online and off and how we can drive conversion in it's many forms.

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