Category Archives: Innovation

Delivering Customer Value is the Key to Success

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Delivering Customer Value is the Key to Success

GUEST POST from Mike Shipulski

Whatever your initiative, start with customer value. Whatever your project, base it on customer value. And whatever your new technology, you guessed it, customer value should be front and center.

Whenever the discussion turns to customer value, expect confusion, disagreement, and, likely, anger. To help things move forward, here’s an operational definition I’ve found helpful:

When they buy it for more than your cost to make it, you have customer value.

And when there’s no way to pull out of the death spiral of disagreement, use this operational definition to avoid (or stop) bad projects:

When no one will buy it, you don’t have customer value and it’s a bad project.

As two words, customer and value don’t seem all that special. But, when you put them together, they become words to live by. But, also, when you do put them together, things get complicated. Here’s why.

To provide customer value, you’ve got to know (and name) the customer. When you asked “Who is the customer?” the wheels fall off. Here are some wrong answers to that tricky question. The Board of Directors is the customer. The shareholders are the customers. The distributor is the customer. The OEM that integrates your product is the customer. And the people that use the product are the customer. Here’s an operational definition that will set you free:

When someone buys it, they are the customer.

When the discussions get sticky, hold onto that definition. Others will try to bait you into thinking differently, but don’t bite. It will be difficult to stand your ground. And if you feel the group is headed in the wrong direction, try to set things right with this operational definition:

When you’ve found the person who opens their wallet, you’ve found the customer.

Now, let’s talk about value. Isn’t value subjective? Yes, it is. And the only opinion that matters is the customer’s. And here’s an operational definition to help you create customer value:

When you solve an important customer problem, they find it valuable.

And there you have it. Putting it all together, here’s the recipe for customer value:

  • Understand who will buy it.
  • Understand their work and identify their biggest problem.
  • Solve their problem and embed it in your offering.
  • Sell it for more than it costs you to make it.

Image credit: Unsplash

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Adjacent Innovation is the Key to Growth and Risk

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Adjacent Innovation is the Key to Growth and Risk

GUEST POST from Robyn Bolton

It’s not easy leading innovation.  Especially these days.  You need to do more with less.  Take risks while guaranteeing results.  Keep up with competition through incremental innovation and redefine the industry with radical and disruptive innovation.  It’s maddening.  Until you find the Goldilocks Zone of adjacent innovation.

Adjacent Innovation: From Middle Child to Just Right

As HBS Professor Regina E. Herzlinger and her co-authors point out in a recent HBR article, the US is in the midst of an innovation crisis. The cost of lost productivity, estimated at over $10 trillion between 2006 and 2018, is a stark reminder of the economic consequences of a lack of innovation. This figure, equivalent to $95,000 per US worker, should serve as a wake-up call to the importance of innovation in driving economic growth.

The authors identify the root cause of this loss as the ‘polarized approach companies take to innovation.’ While companies focus on incremental innovation, the safe and reliable oldest child of the innovation family, the Venture Captialists chase after radical, transformative innovations, the wild, charismatic, free-spirited youngest child.  Meanwhile, adjacent innovation – new offerings and business models for existing customers or new customers for existing offerings and business models – is, like the middle child, too often overlooked.

It’s time to rediscover it.  In fact, it’s also time to embrace and pursue it as the most promising path back to growth.   While incremental innovation is safe and reliable, it’s also the equivalent of cold porridge. Radical or transformative innovation is sexy, but, like hot porridge, it’s more likely to scorch than sustain you. Adjacent innovation, however, is just right – daring enough to change the game and leapfrog the competition and safe enough to merit investment and generate short-term growth.

Proof in the Porridge: 4x the returns in HALF the time

Last year, I worked with an industrial goods company. Their products aren’t sexy, and their brands are far from household names, but they make the things that make America run and keep workers (and the public) safe. The pandemic’s supply chain disruptions battered their business, and their backlog ballooned from weeks to months and even years.  Yet amidst these challenges, they continued to look ahead, and what they saw was a $6M revenue cliff that had to be filled in three years and a product and innovation pipeline covered in dust and cobwebs.

From Day 1, we agreed to focus on adjacent innovation.  For four weeks, we brainstormed, interviewed customers, and analyzed their existing offerings and capabilities, ultimately developing three concepts – two new products for existing customers and one existing product repositioned to serve a new customer.  After eight more weeks of work, we had gathered enough data to reject one of the concepts and double down on the other two.  Three months later, the teams had developed business cases to support piloting two of the concepts.

It took six months to go from a blank piece of paper to pilot approval.

It took just another 12 months to record nearly $25M in new revenue.

Those results are more than “just right.”

Be Goldilocks. Pursue Adjacent Innovation

Every organization can pursue adjacent innovation.  In fact, most of the companies we consider amongst the world’s “Most Innovative” have that reputation because of adjacent innovation. 

How will you become your organization’s Innovation Goldilocks and use adjacent innovation to create “just right” growth?

Image credit: Pixabay

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How to Avoid AI Project Failures

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How To Avoid AI Project Failures

GUEST POST from Greg Satell

A survey a few years ago by Deloitte of “aggressive adopters” of cognitive technologies found that 76% believe that they will “substantially transform” their companies within the next three years. There probably hasn’t been this much excitement about a new technology since the dotcom boom years in the late 1990s.

The possibilities would seem to justify the hype. AI isn’t just one technology, but a wide array of tools, including a number of different algorithmic approaches, an abundance of new data sources and advancement in hardware. In the future, we will see new computing architectures, like quantum computing and neuromorphic chips, propel capabilities even further.

Still, there remains a large gap between aspiration and reality. Gartner estimated that 85% of big data projects fail. There have also been embarrassing snafus, such as when Dow Jones reported that Google was buying Apple for $9 billion and the bots fell for it or Microsoft’s Tay chatbot went berserk on Twitter. Here’s how to transform the potential of AI into real results.

Make Your Purpose Clear

AI does not exist in a vacuum, but in the context of your business model, processes and culture. Just as you wouldn’t hire a human employee without an understanding of how he or she would fit into your organization, you need to think clearly about how an artificial intelligence application will drive actual business results.

“The first question you have to ask is what business outcome you are trying to drive,” Roman Stanek, CEO at GoodData, told me. “All too often, projects start by trying to implement a particular technical approach and not surprisingly, front-line managers and employees don’t find it useful. There’s no real adoption and no ROI.”

While change always has to be driven from the top, implementation is always driven lower down. So it’s important to communicate a sense of purpose clearly. If front-line managers and employees believe that artificial intelligence will help them do their jobs better, they will be much more enthusiastic and effective in making the project successful.

“Those who are able to focus on business outcomes are finding that AI is driving bottom-line results at a rate few had anticipated,” Josh Sutton, CEO of Agorai.ai, told me. He pointed to a McKinsey study from a few years ago that pegs the potential economic value of cognitive tools at between $3.5 trillion and $5.8 trillion as just one indication of the possible impact.

Choose The Tasks You Automate Wisely

While many worry that cognitive technologies will take human jobs, David Autor, an economist at MIT, sees the the primary shift as one of between routine and nonroutine work. In other words, artificial intelligence is quickly automating routine cognitive processes much like industrial era machines automated physical labor.

To understand how this can work, just go to an Apple store. Clearly, Apple is a company that clearly understands how to automate processes, but the first thing you see when you walk into an Apple store you see is a number employees waiting to help you. That’s because it has chosen to automate background tasks, not customer interactions.

However, AI can greatly expand the effectiveness of human employees. For example, one study cited by a White House report during the Obama Administration found that while machines had a 7.5 percent error rate in reading radiology images and humans had a 3.5% error rate, when humans combined their work with machines the error rate dropped to 0.5%.

Perhaps most importantly, this approach can actually improve morale. Factory workers actively collaborate with robots they program themselves to do low-level tasks. In some cases, soldiers build such strong ties with robots that do dangerous jobs that they hold funerals for them when they “die.”

Data Is Not Just An Asset, It Can Also Be A Liability

For a long time more data was considered better. Firms would scoop up as much of it as they could and then feed it into sophisticated algorithms to create predictive models with a high degree of accuracy. Yet it’s become clear that’s not a great approach.

As Cathy O’Neil explains in Weapons of Math Destruction, we often don’t understand the data we feed into our systems and data bias is becoming a massive problem. A related problem is that of over-fitting. It may sound impressive to have a model that is 99% accurate, but if it is not robust to changing conditions, you might be better off with one that is 70% accurate and simpler.

Finally, with the implementation of GDPR in Europe and the likelihood that similar legislation will be adopted elsewhere, data is becoming a liability as well as an asset. So you should think through which data sources you are using and create models that humans can understand and verify. “Black boxes” serve no one.

Shift Humans To Higher Value Tasks

One often overlooked fact about automation is that once you automate a task, it becomes largely commoditized and value shifts somewhere else. So if you are merely looking to use cognitive technologies to replace human labor and cut costs, you are most probably on the wrong track.

One surprising example of this principle comes from the highly technical field of materials science. A year ago, I was speaking to Jim Warren of the Materials Genome Initiative about the exciting possibility of applying machine learning algorithms to materials research. More recently, he told me that this approach has increasingly become a focus of materials research.

That’s an extraordinary shift in one year. So should we be expecting to see a lot of materials scientists at the unemployment office? Hardly. In fact, because much of the grunt work of research is being outsourced to algorithms, the scientists themselves are able to collaborate more effectively. As George Crabtree, Director of the Joint Center for Energy Storage Research, which has been a pioneer in automating materials research put it to me, “We used to advance at the speed of publication. Now we advance at the speed of the next coffee break.”

And that is the key to understanding how to implement cognitive technologies effectively. Robots are not taking our jobs, but rather taking over tasks. That means that we will increasingly see a shift in value from cognitive skills to social skills. The future of artificial intelligence, it seems, is all too human.

— Article courtesy of the Digital Tonto blog and previously appeared on Harvard Business Review
— Image credits: Pexels

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Time to Make a Difference

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Time to Make a Difference

GUEST POST from Mike Shipulski

When it’s time to make meaningful change, there’s no time for consensus.

When the worn path of success must be violated, use a small team.

When it’s time for new thinking, create an unreasonable deadline, and get out of the way.

The best people don’t want the credit, they want to be stretched just short of their breaking point.

When company leadership wants you to build consensus before moving forward, they don’t think the problem is all that important or they don’t trust you.

When it’s time to make unrealistic progress, it’s time for fierce decision making.

When there’s no time for consensus, people’s feelings will be hurt. But there’s no time for that either.

When you’re pissed off because there’s been no progress for three years, do it yourself.

When it’s time to make a difference, permission is not required. Make a difference.

The best people must be given the responsibility to use their judgment.

When it’s time to break the rules, break them.

When the wheels fall off, regardless of the consequences, put them back on.

When you turn no into yes and catch hell for violating protocol, you’re working for the wrong company.

When everyone else has failed, it’s time to use your discretion and do as you see fit.

When you ask the team to make rain and they balk, you didn’t build the right team.

When it’s important and everyone’s afraid of getting it wrong, do it yourself and give them the credit.

The best people crave ridiculous challenges.

When the work must be different, create an environment that demands the team acts differently.

When it’s time for magic, keep the scope tight and the timeline tighter.

When the situation is dire and you use your discretion, to hell with anyone who has a problem with it.

When it’s time to pull a rabbit out of the hat, you get to decide what gets done and your special team member gets to decide how to go about it. Oh, and you also get to set an unreasonable time constraint.

When it’s important, to hell with efficiency. All that matters is effectiveness.

The best people want you to push them to the limit.

When you think you might get fired for making a difference, why the hell would you want to work for a company like that?

When it’s time to disrespect the successful business model, it’s time to create harsh conditions that leave the team no alternative.

The best people want to live where they want to live and do impossible work.

Image credit: Unsplash

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Breaking Free From Stagnation

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Breaking Free From Stagnation

GUEST POST from Robyn Bolton

As a leader in your organization, you’re under tremendous stress. Not only do you need to deliver against a “growth strategy” that demands constant increases in revenue and profit, but you also need to cut costs and support employees who are more disengaged and burned out than ever before.  If it feels like you’re working harder and running faster than ever to maintain the status quo, then I have good and bad news for you.

Bad news: You’re right. 

The feeling of working harder or moving faster simply to stay in the same place is called the Red Queen effect or hypothesis.  The hypothesis asserts “that species must constantly adapt, evolve, and proliferate in order to survive while pitted against ever-evolving opposing species.”  Its name is inspired by the Red Queen in Lewis Carroll’s Through the Looking Glass, who explains to Alice, “here, you see, it takes all the running you can do, to keep in the same place.”

You probably feel the same need to adapt to survive “while pitted against ever-evolving opposing species” every time you see new technologies, read about another new management framework, or hear news from your competitors. You also understand that your organization needs to grow and often hear that it needs to do so at all costs, so you buckle down, work hard, and pull off quarterly miracles.

Good for you! You’re reward?  You get to do it all over again, and faster, this quarter.  And, to add insult to injury, all that growth you’re working harder and harder to achieve is a mirage.

75% of companies do not grow.

HBS professor Gary P. Pisano examined the growth rate of 10,897 publicly held US companies between 1976 and 2019.  When adjusted for inflation, the top quartile grew 11.8% yearly, but the other 75% showed little to negative growth. 

Being in that top quartile was no guarantee of success, as only 15% (3% of the total sample) were able to sustain a growth rate of 0.3%+ for 30 years. In fact, only SEVEN companies—Walmart, UPS, Southwest, Publix, Johnson & Johnson, Danaher, and Berkshire Hathaway—were top-quartile growth companies throughout the thirty years studied.

If you worked at one of those 7 companies, congrats!  Your hard work delivered real and repeatable growth.  If you worked at any of the other 10,890, I hope they offer great benefits?

We know why.

Every good academic knows you can’t just throw out some data without trying to find a causal link, and Professor Pisano is a good academic

“I have found that while the usual explanations for slow or minimal growth—market forces and technological changes such as disruptive innovation—play a role, many companies’ growth problems are self-inflicted. Specifically, firms approach growth in a highly reactive, opportunistic manner. When market demand is booming, they go on hiring binges, throw resources at developing new capacity, and build out organizational infrastructure without thinking through the implications… In the process of chasing growth, companies can easily destroy the things that made them successful in the first place, such as their capacity for innovation, their agility, their great customer service, or their unique cultures. When demand slows, pressures to maintain historical growth rates can lead to quick-fix solutions such as costly acquisitions or drastic cuts in R&D, other capabilities, and training. The damage caused by these moves only exacerbates the growth problems.”

(Bold text added by me)

Good news: You Can Do Something About It

In fact, as a leader in your organization, you’re among the few who have any prayer of pulling your organization out of the Red Queen’s race and putting it on track to real and sustainable growth. Achieving this incredible success requires you (and your colleagues) to decide three things:

  1. How fast to grow (target rate of growth)
  2. Where to find sources of new demand (direction of growth)
  3. How to assemble the resources required to grow (method of growth)

Together, these three decisions comprise your growth strategy and enable your organization to achieve the “delicate balance” between demand and supply required to sustain profitable growth.

Getting to these decisions isn’t easy, but neither is slaying the Jabberwocky.  So, as this brief rest stop in your race comes to an end, who do you choose to be – Alice, who works hard and deals with a bit of nonsense to progress, or the Red Queen, content to work harder to stay in the same place?

Image credit: Unsplash

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Only One Type of Innovation Will Win the Future

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Only One Type of Innovation Will Win the Future

GUEST POST from Greg Satell

Very few businesses last. While we like to think we live in a particularly disruptive era, this has always been true. Entrepreneurs start businesses because they see opportunity and build skills, practices and processes to leverage it. Yet as the world changes, these strengths often become vulnerabilities.

The problem is that the past is not always a good guide to the future. Business models, even the successful ones, are designed for inertia. They are great for leveraging past insights, but are often resistant to change. Success does not, in fact, always breed more success, sometimes it breeds failure.

That’s why every business needs to innovate. Yet innovation is not, as some would have us believe, just about moving fast and breaking things. It’s about solving the problems you need to create a better future. What most fail to grasp is that a key factor of success is how you source problems, build a pipeline and, ultimately, choose which ones you will work on.

1. Getting Better At What You Already Do

Every year, Apple comes up with a new iPhone. That’s not as exciting as it used to be, but it’s still key to the company maintaining its competitive edge. Every model is a bit faster, more secure and has new features that make it more capable. It’s still an iPhone, but better.

Some self-appointed ‘innovation gurus” often scoff at this type of innovation as “incremental” and favor new technologies that are more “radical” or “disruptive,” but the truth is that this is where you derive the most value from innovation — getting better at what you already do and selling to customers what you already know.

So the first line of defense against irrelevance is to identify ways to improve performance in current practices and processes. The challenge, of course, with this type of innovation is that your competitors will be working on the same problems you are and it takes no small amount of agility and iteration to stay ahead. Even then, any victory is short-lived.

Still, most technologies can be improved for a long time. Moore’s Law, for example, has been around for almost 50 years and is just ending now.

2. Applying What You’re Already Good At To A Different Context

Amazon started out selling books online. It then applied its approach to other categories, such as electronics and toys. That took enormous investments in technology, which it then used to create new businesses, such as Amazon Web Services (AWS), Kindle tablets and its Echo line of smart speakers.

In each case, the company took what it already did well and expanded to an adjacent set of markets or capabilities, often with great success. The Kindle helped the company dominate e-books and strengthened its core business. AWS is far more profitable than online retail and accounts for virtually all of Amazon’s operating income.

Still, adjacent opportunities are can be risky. Amazon, despite its huge successes, has had its share of flops too. Whenever you go into a new business you are, to a greater or lesser extent, charting a course into the unknown. So you need to proceed with some caution. When you launch a new business into an adjacency, you are basically launching a startup and most of those fail.

3. Finding A Completely New Problem To Solve

Besides getting better at what you already do and applying things you already know to a different market or capability, you can also look for a new problem to solve. Clearly, this the most uncertain type of opportunity, because no one knows what a good solution will look like.

To return to the Moore’s law example, everybody knows what a 20% performance improvement in computer chips looks like. Metrics for speed and power consumption have long been established, so there is little ambiguity around what would constitute success. Customers will instantly recognize the improvement as having a specific market value.

On the other hand, no one knows what the value of a quantum computer will be. It’s a fundamentally new kind of technology that will solve new types of problems. So customers will have to explore the technology and figure out how to use it to create better products and services.

Despite the uncertainty though, I found in the research that led to my book, Mapping Innovation, that this type of exploration is probably the closest thing to a sure bet that you’re going to find. Every single organization I studied that invested in exploration found that it paid off big, with extremely high returns even accounting for the inevitable wrong turns and blind alleys.

The 70-20-10 Rule

Go to any innovation conference and you will find no shortage of debates about what type of approach creates the most value, usually ending with no satisfying conclusion. The truth is that every organization needs to improve what they already do, search for opportunities in adjacencies and explore new problems. The key is how you manage resources.

One popular approach is the 70-20-10 rule, which prescribes investing 70% of your innovation resources in improving existing technologies, 20% in adjacent markets and capabilities and 10% in markets and capabilities that don’t exist yet. That’s more of a rule of thumb than a physical law and should be taken with a grain of salt, but it’s a good guide.

Practically speaking, however, I have found that the exploration piece is the most neglected. All too often, in our over-optimized business environment, any business opportunity that can’t be immediately quantified in considered a non-starter. So we fail to begin to explore new problems until their market value has been unlocked by someone else. By that point, we are already behind the curve.

Make no mistake. The next big thing always starts out looking like nothing at all. Things that change the world always arrive out of context for the simple reason that the world hasn’t changed yet. But if you do not explore, you will not discover. If you do not discover, you will not invent. And if you do not invent, you will be disrupted. It’s just a matter of time.

— Article courtesy of the Digital Tonto blog and previously appeared on Inc.com
— Image credits: Pixabay

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Are We Doing Social Innovation Wrong?

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Are We Doing Social Innovation Wrong?

GUEST POST from Geoffrey A. Moore

The Volume Operations business model kicks in when you have hundreds of thousands of users and goes up from there. 100,000, for those of us who are not math majors, is 10 to the power of 5. Uber-successful volume ops businesses operate at 10 to the power of 9 and up—millions of users or customers. But if you are a start-up, you are looking at 10 or maybe 100. How do you get from here to there?

The key thought to keep in mind is the old chestnut “what got you here won’t get you there.” That is, whatever operating model you have, keep in mind it can scale to two exponents but never to three. That means for every two exponents you have to change operating models, which likely means you have to change executive leadership in order to go forward.

To illustrate this idea, I’d like to focus on the non-profit sector and ask the question, what would it take to really solve for any widespread social problem? Homelessness was the first one that came to mind, but hunger is another obvious one, drug addiction a second, street crime a third. They are all seemingly intractable issues that, despite the best intentions of a whole raft of people, and regardless of how much funding is supplied, stubbornly resist any sustainable improvement.

The question I want to address is not what programs would work—because I actually think a whole lot of programs would work—but rather, how could we organize to deploy these programs successfully at scale.

Following our principle of what got you here won’t get you there, we need a ladder of operating models that can take us, exponent by exponent, from 10 to the power of 1 to, say, 10 to the power of 7. What might that look like?

Scaling Social Innovation

Consider this a straw man, a place to start, something to edit. It conveys a key lesson from the high-tech sector, namely that the fastest way to kill a disruptive innovation is to race to scale by skipping over one or more of these “exponential steps.” It just doesn’t work. There are too many emergent factors at each new level you must learn to cope with in order to succeed. The only reliable way to scale is to ratchet your way up this staircase, adapting your systems and operations as you go.

Unfortunately, that’s not what politicians do. They want to make a big impact right away. That means they start everything on one of the upper stairs. Driven by impatience, they ignore the dynamics of adoption and demand mass deployment from the get-go. They think the problem is simply one of getting enough funding. It’s not. It’s one of operational innovation. Scaling prematurely simply wastes the funding. And then when programs do flounder, as they inevitably will, they blame it on execution when in reality they simply did not do the hard, time-consuming work of building up their foundation step by step from below.

One of the implications of this framework is that social services should be incubated in the private sector where freedom from regulatory constraints supports agile innovation. But as they scale, the importance of regulatory oversight increases and more communal engagement is required. The goal should be to keep this oversight as local as possible as long as possible, doing as much as we can to empower the people delivering the service itself. Once that operating model solidifies, then, and only then, is there a proper foundation for scaling to state and federal programs.

Today, we do not lack the empathy to support social services. Nor do we lack the funding. But we are failing nonetheless. We can do better. We need to do better.

That’s what I think. What do you think?

Image Credit: Pexels

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Top 10 Human-Centered Change & Innovation Articles of July 2024

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Top 10 Human-Centered Change & Innovation Articles of July 2024Drum roll please…

At the beginning of each month, we will profile the ten articles from the previous month that generated the most traffic to Human-Centered Change & Innovation. Did your favorite make the cut?

But enough delay, here are July’s ten most popular innovation posts:

  1. Organizational Debt Syndrome Poses a Threat — by Stefan Lindegaard
  2. Do Nothing More Often — by Robyn Bolton
  3. Is Disruption About to Claim a New Victim? — by Robyn Bolton
  4. What Top Innovators Do Differently — by Greg Satell
  5. Four Hidden Secrets of Innovation — by Greg Gatell
  6. Rise of the Atomic Consultant — by Braden Kelley
  7. Do You Bring Your Whole Self to Work? — by Mike Shipulski
  8. Giving Your Team a Sense of Shared Purpose — by David Burkus
  9. Creating Effective Digital Teams — by Howard Tiersky
  10. Smarter Risk Taking — by Janet Sernack

BONUS – Here are five more strong articles published in June that continue to resonate with people:

If you’re not familiar with Human-Centered Change & Innovation, we publish 4-7 new articles every week built around innovation and transformation insights from our roster of contributing authors and ad hoc submissions from community members. Get the articles right in your Facebook, Twitter or Linkedin feeds too!

Have something to contribute?

Human-Centered Change & Innovation is open to contributions from any and all innovation and transformation professionals out there (practitioners, professors, researchers, consultants, authors, etc.) who have valuable human-centered change and innovation insights to share with everyone for the greater good. If you’d like to contribute, please contact me.

P.S. Here are our Top 40 Innovation Bloggers lists from the last four years:

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Finding Innovation in the Humble Garbage Can

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Finding Innovation in the Humble Garbage Can

GUEST POST from Howard Tiersky

Uber has taught us that even the most commonplace products and services are ripe with innovation. They’ve re-invented the taxi experience, and many people would agree that, given a choice, they’d never go back to the old way.
Today, I want to give a shout out to another company, one that’s doing amazing things with garbage cans: simplehuman.

Simplehuman, founded in 2000 by Frank Yang, is a great case study in terms of product innovation, as well as business model. It had one simple mission: make a better trash can. For the last year, I’ve had a simplyhuman garbage can in my kitchen, so I can attest. It is a better trash can.

Before we switched to simplehuman, this is the kind of trash can we had in the kitchen:

And this is the simplehuman can that’s in my kitchen today:

Two features of this product make it a real game-changer. The lesser of these was the rim around the top that completely hides the edges of the plastic bag that peek over the edge most cans. I didn’t realize how ugly this was until it was gone. (insert sigh of relief here)

But the real hero is the built-in garbage bag dispenser. As you can see from the image below (pulled directly from simplehuman’s website), a dispenser for new garbage bags is built right into the body of the can, saving me from having to walk across the room to get a new bag from the box under the kitchen sink when I need a replacement. Yes, this is a seemingly small inconvenience, but once it’s removed, it seems a silly waste of effort that you ever had to walk across the room in the first place.

While they may not be solving world hunger, these two improvements are enough for me to never want to go back.

Simplehuman: Our new stainless steel rectangular step can features an innovative ‘liner pocket’ that stores and dispenses liners from inside the can for a faster liner change.

But from a business perspective, here’s where it gets interesting. In order to have garbage bags that fit both the dispenser and perfectly around the rim (so that no “spillover” bag is showing,) I need to use their custom-fitted bags. These bags are sized specifically for this can and come in little boxes perfectly sized to fit the built-in dispenser.

So where does one get these magical bags? Well, when you buy the can, there’s an insert that directs you to download simplehuman’s app. In the app, you can “manage your supplies,” by ordering garbage bags or, even better, setting up a subscription, which is what I did.

What do these garbage bags cost? A 100-count box of simplehuman garbage bags is about $25. That doesn’t break the bank, but as it turns out, it’s about twice what Hefty and Glad bags cost. Besides that, the garbage can itself is about $100, compared with less than half of that for one of their less innovative competitor’s stainless steel kitchen garbage cans. Again, not outrageous, but still a substantial premium. So what’s innovation worth to simplehuman? About double. And it’s worth it to me to pay it to solve problems, even if I never realized there were problems until simplehuman’s solution brought them to my attention.

Coming up with these types of innovations for your business starts with finding painpoints. What is your customer’s equivalent of having to walk across the room to get a garbage bag from under the sink? It doesn’t have to be pain that drives them crazy. Solving just a small irritation can turn out to be a highly appreciated innovation. And what about aesthetic gaps in your products that nobody focuses on, but would be obvious once gone (the way Steve Jobs showed us how ugly PCs were by creating the iMac)?

Finding these types of unmet points of pain can be achieved through ethnography and other research techniques that create customer empathy. Techniques like these can generate profound insights with relatively minimal effort, and at FROM, we utilize them on nearly every project. The majority of the time, the most winning features of the new digital products we create come from solving problems generated by these insights. The ideas may not come from the customers (in fact, they probably won’t) but the pain insights do. Once you have those, it can open up new doors, and allow your team to come up with many new solutions.

Additionally, innovation is often not just about the product, but also the business model. Achieving simplehuman’s innovation required custom-fit garbage bags. I’d imagine that, at one point before launching this product, simplehuman realized it would be difficult to get every grocery store in America to carry these bags, especially before their product achieved critical mass. That logistical problem could have killed the whole concept. But instead of working within the existing ecosystem, where can-sellers have to align to a few non-tailored garbage bag sizes, they shifted their business model to app-based subscription. This allowed them not only to deliver the innovation, but also to double the price of their bags (probably without customers even noticing, since their bags aren’t sold side-by-side with mainstream brands), and to realize 100% of the revenue via direct sales, rather than splitting with a retailer and distributor.

So I say Bravo!, simplehuman. Great innovation, great business, and thanks for making my life a little bit better — I’m happy to pay you more for it. Now imagine what I’d be willing to pay if you could figure out how to get the can to take the full garbage bag outside!

This article originally appeared on the Howard Tiersky blog
Image Credits: Pixabay

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What is Your Purpose?

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What is Your Purpose?

GUEST POST from Robyn Bolton

Purpose.  Goal.  Mission.  You hear these words a lot this time of year.  Not because it’s the start of the annual business planning cycle but because it’s graduation season. 

Across the country, commencement speakers and wise family members espouse the importance of having a purpose to guide and sustain graduates as they set out on their next adventures.

All the talk of purpose can feel overwhelming, especially as you listen to graduates’ wide-eyed optimism about how they will change the world while stewing in an existential crisis that makes you wonder if you even have a purpose.

You do.

And part of that purpose is finding and creating purpose.

What is “Purpose?’

Purpose hasn’t reached buzzword status, but it’s close, so let’s start with a definition, or three, courtesy of The Britannica Dictionary:

  1. the reason why something is done or used: the aim or intention of something – The purpose of innovation is to create value
  2. the feeling of being determined to do or achieve something – The team worked with purpose
  3. the aim or goal of a person: what a person is trying to do, become, etc. – He knew from a young age that her sole purpose in life was to be an orthodontist

Three different definitions of purpose.  Three questions that it’s part of your purpose to ask.

“What’s THE purpose?”

Innovation is all about creating value.  Sometimes, to create value, you need to do new things.  Sometimes, you need to stop doing things.  It’s hard to tell the difference if you don’t ask.

That’s why innovative leaders are curious.  You aren’t afraid to ask, “What’s the purpose of this product/process/meeting/decision/(fill in the blank).”  You want to know “why something is done or used,” and they know that the best way to figure that out is by asking.

You ask this question at least once a day.  When you ask it, you’re genuinely curious about the answer.  After all, we’ve all experienced people and cultures that weaponize questions – “Johnny, is that where the scissors go?” or “Why did you think that was a good idea?” – and you reassure people that you’re asking a genuine question, even if they should know that by your tone.

“What’s OUR purpose?”

Innovation is hard.  You live in ambiguity and uncertainty.  You fail (learn) more often than you succeed.  You are told “No” and “Stop” more than “Yes,” “Keep going,” and “Thank You.”

Innovators are courageous.  You do the hard work of innovation because you are “determined to do or achieve something.” 

You also know that sustaining courage and purpose requires a team. 

You aren’t fooled by the myth of the lone genius. After all, Thomas Edison worked with as many as 200 people in his West Orange lab. Heck, even Steve Jobs needed Sir Jony Ive (and a few hundred other people) to bring his vision of “1,000 songs in your pocket” to life.

“What’s MY purpose?”

Innovation takes a long time.  Change happens gradually, then suddenly.  We chose to preserve what we have, rather than take a risk to get more.

Innovators are committed.  You are patient for change, steadfast in the face of resistance, and optimistic when others are afraid because of your “aim or goal…what [you are] trying to do, become, etc.” 

Even if you can’t articulate it in a grand statement or simple, pithy soundbite, you have a purpose.  As Viktor Frankl wrote, “Those who have a ‘why’ to live, can bear with almost any ‘how’.”

Three Purposes.  Three questions

Even if you lack the wide-eyed optimism of a new graduate and feel like you spend most days just muddling through life, because you are here, you have a purpose.  So tell me:

  1. When was the last time you were curious and asked, “What’s the purpose of (artifact of the status quo)?”
  2. When was the last time you were courageous and used your feeling of determination to inspire others to join your purpose, overcome obstacles, and get something done?
  3. When was the last time you had to dig deep, rediscover your purpose, and reinforce your commitment so that you could bear and overcome the “how?”

Image credit: Dall-E via Microsoft Bing

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