Category: innovation

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Stop Treating R&D as a Luxury

You agree with the general concept of having new products and services to offer your customers. After all, a company that relies on stale stuff is likely to fail. But how do you put together an effective R&D plan when budgets are limited?

It sounds like something only the biggest companies overseas do. Most think that “Research and Development” are two luxury items to be indulged in when times are good. And Jamaica’s economy has not shown sustained GDP growth in years.

But what if R&D is just a fancy name for innovations you cannot afford to delay? Sadly, some only realise this in retrospect. Today, they are out of business because they failed to abandon old, obsolete thinking. How can your firm ensure that it doesn’t destroy value because it’s too slow to learn?

  1. Be Hyper-Curious About the End

Most of us remember when videotape rental companies did a booming business. To most, this appeared to be a great niche, with guaranteed traffic every weekend.

I happened to live in the US when Netflix arrived, offering the chance to rent a DVD by mail. Initially, it was inconvenient to send items through the post. Compared to renting a video from Blockbuster, it took longer and stuff could get lost.

Apparently Netflix agreed and tried to sell itself to Blockbuster…who literally laughed as they left in embarrassment.

A few years later, after they closed 9,000 stores, the smiles were replaced by tears.

In retrospect, it was all very obvious to see what was happening. Today, we shake our heads at their arrogance in disbelief. But are you committing the same mistake in your organisation?

If you accept the fact that it’s just a matter of time before your industry is disrupted, congratulations. You are ahead of the game. Consider that, in your company, a short-term plan, by itself, may not go far enough to show that the clock is ticking.

If you are really curious, you should have a plan for exiting each major line of business. Create a deadline date: the moment when you intend to earn your last dollar from the pertinent product or service.

Alongside this doomsday prediction should be a plan to launch a new category of product or service. Where should these timelines come from? Your long-term R&D plan, of course.

For example, immediately after making a record year of profits in 2000, Fuji Film’s research showed it had a 10-15-year end-game. Kodak also had fantastic sales, but was never curious enough about the future to take the right actions. Consequently, Fuji thrives in a whole different industry. Kodak is just a single tiny business, having destroyed an estimated US$9 billion of value.

  1. Allow Competing Alternatives in Your Planning

How should your company determine these choices?

In your next strategic planning session, ensure that you permit attendees to propose various visions of the future. (If team-members share the same age, gender and background, consider that to be an impediment.)

You want different points of view to emerge for your “Vision 2040”, for example. First, make sure you are all starting with the same facts. Then, invite advocates to describe their preferred future. Even if it makes others uncomfortable. Get them to share details as they paint a vivid picture and draw fellow participants in to expand it.

Do not squelch your colleagues.

When you have a number of candidate futures, stand back collectively and assess them, because it’s time to choose which one(s) to pursue.

In this moment of truth, you should be scared witless. Why? You could easily and unwittingly fall into the path of more videotapes. Or film.

In other words, you could doom your company. Or save it. Agonize if you will, but understand that your decision cannot easily be reversed. It’s just not the kind of choice that can be revisited whenever the breeze changes direction.

  1. Decide and kill off alternatives

Instead, treat this moment of selection as a final verdict which will assign time, money, manpower and other corporate resources. You are making a bet which has an unsure outcome, but understand that the team must be willing to stand by its selection.

However, this means that if major assumptions change, then it’s your duty to revisit the plan. But this should be rare.

Blackberry needed to do this when the iPhone turned out to be a serious threat, for example. Only a dose of humility would have saved it from obsolescence.

Unfortunately, this advice isn’t easy to take. Most shy away from the kind of hard conversations required until it’s too late.

Don’t disappoint your shareholders, employees, suppliers, pensioners, and other stakeholders by being slow or cowardly. Instead, make the difference by investing in your organisation’s future.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search his prior columns on productivity, strategy, engagement and business processes, send email to columns@fwconsulting.com.

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Triaging new workplace ideas

An engaged staff full of bright ideas? This is clearly an aspiration for most leaders. But what happens when employees, armed with a dose of courage, create more noise than anything else? What should organizations do when people pick up the habit of simply speaking what’s on their mind, with little commitment behind their words?

In times past, managers did the thinking and workers did the doing. Thankfully, those days are long gone and staff expect their input to be taken seriously. Their engagement is critical.

However, executives with open-door policies can spend all day at the mercy of those who think they have good ideas. Indulge too often, and they fall into inefficiency, even with the best of intentions. While their openness is a fine start, it’s not enough.

According to Michael Stelzner from the Social Media Marketing Show, you must learn to follow three counter-intuitive steps when you sell your suggestions.

  1. The What

The higher up you go in an organization, the greater the need to begin any proposal with the headline or solution – “the What”. Why? Leaders are time and attention constrained. Their people are required to get to the point.

Journalists have a name for it: “burying the lead.” It refers to a British-inspired tradition of using polite banter before getting to the bottom-line. Unfortunately, it’s a deadly communication sin in today’s world of ongoing distractions.

As such, reporters are taught to unlearn this practice because it loses the reader’s attention. The lead (i.e. the main point) comes first, and the explanatory details after.

However, in everyday life, this takes courage. Most of us prefer the safe approach. We’d rather beat around the bush and leave the punchline for the end, delaying any rejection for as long as possible.

In the corporate world, it pays to train yourself and others to summarize the idea at the start. Everyone benefits, even if the suggestion is ultimately discarded. You’ll save precious time and can move on to other topics of discussion.

  1. The Why

If your audience seems receptive to “The What”, shift gears to explain the reasons your idea is important.

You may describe the past, present and future of the problem. Why has it not been cleared up? Why is this the ideal moment to make a public commitment to deal with the issue? What is the cost to the organization if the obstacle is allowed to continue? What if the challenge is never addressed at all?

One way to answer these questions is in the form of a story in which the members of your audience take the role of protagonists. Their tale begins with the normal, everyday situation where everything is working as it should. Then, it’s interrupted by a failure of some kind that introduces pain. Finally, the saga ends with your suggestion for taking action.

In this finishing step, your solution addresses a range of functional, emotional and social gaps which the breakdown has produced. They amplify the impact of the breach in order to generate real-time attention and commitment.

  1. The Who

If the heads are nodding at this point, you’re ready for the element that most employees fail to address. Who exactly will implement the initiative?

The answer to this question separates the talkers from the implementers. The fact is, most leaders don’t want to entertain solutions which lack this critical piece. Why? No project succeeds when there is no-one willing to be accountable.

Therefore, think through the staffing of your proposed solution before offering it openly. Even if you do not have a definitive answer, show that you have given it enough thought to make an informed suggestion. Your attempt will be appreciated as you help your audience grapple with this dimension and the trade-offs it demands.

Finally, resist the temptation to get caught up in the question of “How should this be implemented?” Usually, this moment is neither the time nor the place to delve into that level of detail. Why? The subject-matter experts are probably not in attendance, accountable individuals have not been assigned and a decision to proceed hangs in the balance.

Instead, trust the project team to figure out “The How” after careful study, once they have consulted appropriate stakeholders.

In other words, don’t allow uninformed (but well-meaning) leaders to indulge in commitment-free, speculative conversations. While they are comfortable and even enjoyable, they are out of place and waste everyone’s time.

In summary, follow the What, Why and Who script, and delay the How discussion. If you discipline yourself as an organization to stick to this formula, you’ll see better ideas bubbling up to the right places from your staff.

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Stop Your Brainstorming for Better Innovations

Where should good ideas for new products and services come from? Does the customer know best or not? Answer these questions correctly and your company could launch a series of winning offerings.

Is the customer always right? Steve Jobs argued otherwise: “By the time you build what they say they want, they have moved on and want something new.”

At the other end of the spectrum, customers were demanding better buggy-whips when innovators wanted to sell them cars. A survey of their needs would have been trapped within the limits of their thinking.

Here in the Caribbean, researchers complain about the challenge of customer surveys: people will often default to telling you what you want to hear. They are afraid of rocking the boat, or making you feel bad, so they alter their responses.

But should you ignore your customers?

The fact is, there are more companies that have failed by following their instincts and intuitions than by doing surveys and focus groups. Fortunately, there’s some new thinking emerging that solves the dilemma. Here are the steps some of the best organizations are using to craft fresh offerings that win the hearts and minds of their audience.

1. Uncover Struggling Moments

A “struggling moment” is one which occurs when a customer can’t have your offering. It may not exist, or not be available to them. Some may complain loudly, but the ones you really need aren’t merely the unhappy and opinionated. Instead, you should focus on those who are so frustrated they are engaging in what Amy Jo Kim calls “Solution Seeking Behavior”.

In other words, they are actively trying to solve the problem by finding substitutes. For example, if you want to create a better car, find people who are already working to fill the void you have identified. You’ll know who they are because they are taking visible action.

They probably know more than you do about the problem, because they have been attempting to solve it for so long. Their actual experience of living at their wits’ end, praying for answers, is important information you can’t get elsewhere.

This discovery is a pivotal moment for you as a product or service innovator. You need to stop brainstorming internally, so you can hear real-life struggling moments from the outside. Unfortunately, most companies don’t reach this point and end up missing the mark. But yours could be different if it can be disciplined enough to make the switch.

  1. Find the Best Strugglers

But you are still faced with the problem of locating these rare people. This could be a matter of searching for them in social media communities, or making face-to-face invitations. Perhaps the most efficient way is to conduct a questionnaire or survey intended to weed out the least qualified. Do it well, and the most likely prospects will nominate themselves.

They will definitely be in the minority.

But once you have some prospects, conduct short interviews to select the few who will become your biggest fans. And they should be willing to participate. After all, they have been dreaming up solutions ever since they identified the problem, putting you in a coveted position.

And don’t worry if they add up to a motley crew which doesn’t represent the majority. Or if there aren’t enough of them to earn you a decent profit. That’s OK – their role is not to make you rich, but to teach you.

  1. Craft Strugglers into Co-Creators

While they won’t bring you lots of revenue, these high-quality strugglers will give you something more valuable: their energy and knowledge. Because they are highly motivated, they’ll work with you to craft the ideal offering that would solve their problems.

This small army of practical soldiers will also provide the impetus and inspiration you need to make your first wins. This sets you up to pivot. Next up? The group Geoffrey Moore calls the Early Majority. This is the segment of the mainstream audience that will adopt your offering.

But there’s a catch.

The product or service you eventually offer to the mainstream may not look like the one you crafted to win over the Strugglers/Co-Creators. That’s OK. Today, the average personal computer user looks nothing like young, mostly male nerds who fell in love with the technology in the late 1970s’.

Once you expect this to be the case, you can be patient. Working with customers is a must, but the entire journey requires a nuanced approach.

It’s just not as simple as asking people what they want or trusting your gut instincts. Dig deeper into the reason the Strugglers are so fired up and you’ll find the seeds of solutions that may take you to success.

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Shifting to online methods of reaching prospects

Too many executives are unaware of game-changing ways their markets are shifting. Their post-COVID audience of prospects and customers now expects more than message blasts. Instead, they require your company to become better attuned to their unmet needs. Fail to do this and they switch to competitors.

Remember the days when advertising meant print, display, and broadcast messaging? The core idea? Deliver to you a blast of information from the company, targeted at your attention. Then, cross their fingers, hoping that you would respond favorably at a later time and date.

Contrast that method with the effectiveness of social media advertising. On Facebook, Twitter or Instagram, your clickable behaviour is tracked and analyzed. Then, an algorithm decides which advertisements to send. As such, you receive a highly customized and targeted set of messages.

If you are a typical executive, you may be dimly aware of the difference between old and online methods. An interesting factoid.

However, you should pay closer attention.

The companies who are using online messaging are “learning” more about their customer’s unmet needs than you can imagine. They’re analyzing the details to draw powerful conclusions.

It’s an improvement over the prior state of affairs, captured by John Wanamaker’s joke: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half!”

With today’s technology, one can actually tell. How should your business use this capability?

  1. Track changing customer behaviour

If your company isn’t doing business online yet, you may explain that your customers are not to be found there in large numbers.

But that’s not a valid reason: you can use online interactions to learn about your customer’s behaviors, even if their numbers are small.

For example, your firm can test a hundred marketing messages to see which ones bring people into your funnel. Then, in your next step, apply different followups to determine how they react.

Consider it to be a cheap way to do critical research.

This level of detailed information puts your ads on broadcast media to shame in terms of its feedback value. Better yet, you should be able to learn where behavior changes lead to long-term habits that didn’t exist before.

This kind of precision is taken for granted by online advertisers, but few traditional marketing executives understand its power firsthand. The learning curve is too steep. As such, COVID has catalyzed changes they can’t track.

Consequently, many companies are being left in the dark by competitors who are gaining deep intelligence. Your best customers may be at risk.

  1. Conduct experiments on fresh innovations

A side-effect of this new capability is that your organization can shorten the time it takes to confirm an original product or service. This solves an age-old problem: how can you determine which offerings to bring to market?

In the online era, you actually don’t even need to sell anything to find out. Simply create advertisements for a new imaginary offering and see how an audience responds.

It’s a form of advanced market research that works far better than asking people whether they like something or not.

Imagine, you can bring prospects all the way to the point where they enter credit card numbers, revealing their intent to pay. In this approach, you are following their actual behavior, not their surveyed opinions.

Plus, you should gather groups of likely customers in a single place and partner with them to build the first version of your introductory offering.

As your fans, they give you valuable feedback that helps you craft the new product or service for the larger mainstream market.

These experiments deliver you invaluable data quickly, giving you a powerful advantage. The cost? Minimal.

  1. Anticipate Unmet Needs

Finally, you can even track the precursor to prospect’s new behaviours – unmet needs. By definition, these make up a moving target. Why? As customers absorb your prior innovations, they outgrow your existing solutions. Breakthrough technologies accelerate this process, leading them to start looking earlier than ever for replacements.

COVID has accelerated these changes, but many organizations will close down waiting for old behaviours to return. For most, the “new normal” is one they can’t anticipate: they just don’t have the information necessary.

Better, smarter companies will arrive at the same point in time with a bunch of data on their new customer’s needs. They’ll have innovations lined up which might be in demand by customers who know when they’ll be released.

Does your firm believe that after COVID finally departs it plans to launch a big, traditional advertising blast? If so, you could be making an egregious error.

Instead, take action now to develop the sophisticated information to build deep relationships that anticipate customer’s unmet needs.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search prior columns on productivity, strategy, engagement and business processes, send email to columns@fwconsulting.com