Tag Archives: value

Unlocking Trapped Value from the Technology Adoption Lifecycle

GUEST POST from Geoffrey A. Moore

For some time now I have been making the case that investment decisions, be they made by customers engaging with a new product and vendor or private equity firms backing a new technology and entrepreneur, should begin with finding the intersection between the innovation at hand and a pool of trapped value it can release, thereby creating the return on investment. That said, one of the core principles of investing is called risk-adjusted returns, meaning that the greater the risk you take, the higher the return needs to be. My expertise is in the risks related to technology adoption, where the risk factors change over the course of a new technology’s deployment. With that thought in mind, here is how the trapped value thesis needs to risk-adjust to adapt:

Early Market: very high technology adoption risk. The prize here has to be quite large indeed. Typically it will come in one of two forms. For B2B investments, it will be like an oil reservoir that, if tapped correctly, will produce a gusher. Regulated industries have pockets of trapped value all over the place that fit the bill. Also, industries like automotive and real estate, which are restructuring their relationships with dealers and agents, would qualify. By contrast, B2C investments tap into trapped value that looks more like shale oil—no deep pockets, but incredibly broad presence. Media, transportation, and hospitality have funded extraordinary returns for Netflix, Uber, and Airbnb, not because the trapped value was severe but because it was so pervasive. The point is, early-stage venture investing needs to target home-run bets to warrant the risks it takes. Same goes for visionary customers in B2B markets who are the early adopters of these technologies. They are taking on significant risk so they need to be targeting outstanding rewards.
Crossing the Chasm: high technology adoption risk, but readily mitigated. The challenge here is that the technology has great potential for any number of use cases but needs some additional support in every case to achieve the desired end result. The chasm-crossing playbook focuses on a single use case in a single industry and geography in order to create a killer “whole product” that nails the use case and to build a coalition of customer references and partner successes that will keep the market growing even as the technology vendor expands into other segments. Here the trapped value should be intense but narrowly confined, designed to meet three critical success factors:
1. Big enough to matter (it should be able to generate 10X your current year’s billings target)
2. Small enough to lead (if you crush your plans, you should get 50% segment share)
3. Good fit with your crown jewels (if you win, nobody is going to displace you).
As you can see, there is risk here, but it is manageable through market focus and disciplined execution, the key risk reduction factor being how compelling is the customer’s reason to buy.
Bowling Alley: modest adoption risk. The challenge here is to expand beyond your first “beachhead” vertical into adjacent use cases with the same segment as well as adjacent segments with the same use case. Part of the source of reduced risk is that you have a working playbook from the first vertical. Much of the source, however, comes from the emergence of local ecosystems of partners who complete the whole product solutions for each use case. These partners make their living supplementing the technology vendor’s product or platform, and their extra talent, domain expertise, and segment focus represent a major risk reduction. As a result, the trapped value rewards have a lower hurdle to clear to garner investor interest and customer buy-in.
Tornado: low adoption risk. The risk here is the opposite—getting left behind as the world embraces the shift to a new normal. The trapped value that drives a tornado is released by “killer apps.” These apps may not release the most trapped value, but they represent a sure winner to start with, making the buying decision a no-brainer. The point is, if you want to get any traction in the tornado, you have to lead with a killer app, a no-regrets offering that delivers simple-to-consume rewards and gets everyone onto the new platform. That means the trapped value must be easy to target and the value of releasing it must be obvious to all, especially to the end users who will be the prime beneficiaries.
Main Street: very low adoption risk. The primary adoption challenge here is converting conservative end users who simply do not want to switch to yet another new technology. The trapped value now exists in nuisances, little bits of inefficiency that have workarounds but are annoying. From the point of view of productivity, the cost savings from eliminating them are minimal. But in terms of the user experience, as well as customer satisfaction, the impact can be substantial. B2C enterprises spend most of their R&D here focused either on eliminating “hygiene” issues or innovating with new “delighters,” both of which can increase demand, the cornerstone for volume operations success. B2B enterprises use six-sigma analytics to scout their value chains for bottlenecks that increase latency, something that adds risk without adding value, and frustrates even their most loyal customers.

The key takeaway is that there are different kinds of trapped value, each occupying a different sweet spot in the Technology Adoption Life Cycle. As a vendor and potential leader of a go-to-market ecosystem, you must be crystal clear about the kind of trapped value you are targeting, the kind of risk-taking it warrants, and the kinds of solutions that will get the most traction.

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

Image Credit: Unsplash

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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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Value Doesn’t Disappear

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It Shifts From One Place to Another

Value Doesn't Disappear

GUEST POST from Greg Satell

A few years ago, I published an article about no-code software platforms, which was very well received. Before long, however, I began to get angry — and sometimes downright nasty — comments from software engineers who were horrified by the notion that you can produce software without actually understanding the code behind it.

Of course, no-code platforms don’t obviate the need for software engineers, but rather automate basic tasks so that amateurs can design applications by themselves. These platforms are, necessarily, limited but can increase productivity dramatically and help line managers customize technology to fit the task at hand.

Similarly, when FORTRAN, the first real computer language, was invented, many who wrote machine code objected, much like the software engineers did to my article. Yet Fortran didn’t destroy computer programming, but democratized and expanded it. The truth is that value never disappears. It just shifts to another place and that’s what we need to learn to focus on.

Why Robots Aren’t Taking Our Jobs

Ever since the financial crisis we’ve been hearing about robots taking our jobs. Yet just the opposite seems to be happening. In fact, we increasingly find ourselves in a labor shortage. Most tellingly, the shortage is especially acute in manufacturing, where automation is most pervasive. So what’s going on?

The fact is that automation doesn’t actually replace jobs, it replaces tasks. To understand how this works, think about the last time you walked into a highly automated Apple store, which actually employs more people than a typical retail location of the same size. They aren’t there to ring up your purchase any faster, but to do all the things that a machine can’t do, like answer your questions and solve your problems.

A few years ago I came across an even more stark example when I asked Vijay Mehta, Chief Innovation Officer for Consumer Information Services at Experian about the effect that shifting to the cloud had on his firm’s business. The first order effect was simple, they needed a lot less technicians to manage its infrastructure and those people could easily be laid off.

Yet they weren’t. Instead Experian shifted a lot of that talent and expertise to focus on creating new services for its customers. One of these, a cloud enabled “data on demand” platform called Ascend has since become one of the $4 billion company’s most profitable products.

Now think of what would have happened if Experian had merely seen cloud technology as an opportunity to cut costs. Sure, it would have fattened its profit margins temporarily, but as its competitors moved to the cloud that advantage would have soon been eroded and, without new products its business would soon decline.

The Outsourcing Dilemma

Another source of disruption in the job market has been outsourcing. While no one seemed to notice when large multinational corporations were outsourcing blue-collar jobs to low cost countries, now so-called “gig economy” sites like Upwork and Fiverr are doing the same thing for white collar professionals like graphic designers and web developers.

So you would expect to see a high degree of unemployment for those job categories, right? Actually no. The Bureau of Labor Statistics expects demand for graphic designers to increase 4% by 2026 and web developers to increase 15%. The site Mashable recently named web development as one of 8 skills you need to get hired in today’s economy.

It’s not hard to see why. While it is true that a skilled professional in a low-cost country can do small projects of the same caliber as those in high cost countries, those tasks do not constitute a whole job. For large, important projects, professionals must collaborate closely to solve complex problems. It’s hard to do that through text messages on a website.

So while it’s true that many tasks are being outsourced, the number of jobs has actually increased. Just like with automation, outsourcing doesn’t make value disappear, but shifts it somewhere else.

The Social Impact

None of this is to say that the effects of technology and globalization hasn’t been real. While it’s fine to speak analytically about value shifting here and there, if a task that you spent years to learn to do well becomes devalued, you take it hard. Economists have also found evidence that disruptions in the job market have contributed to political polarization.

The most obvious thing to do is retrain workers that have been displaced, but it turns out that’s not so simple. In Janesville, a book which chronicles a small town’s struggle to recover from the closing of a GM plant, author Amy Goldstein found that the workers that sought retraining actually did worse than those that didn’t.

When someone loses their job, they don’t need training. They need another job and removing yourself from the job market to take training courses can have serious costs. Work relationships begin to decay and there is no guarantee that the new skills you learn will be in any more demand than the old ones you already had.

In fact, Peter Capelli at the Wharton School argues that the entire notion of a skills gap in America is largely a myth. One reason that there is such a mismatch between the rhetoric about skills and the data is that the most effective training often comes on the job from an employer. It is augmenting skills, not replacing them that creates value.

At the same time, increased complexity in the economy is making collaboration more important, so often the most important skills workers need to learn are soft skills, like writing, listening and being a better team player.

You Can’t Compete With A Robot By Acting Like One

The future is always hard to predict. While it was easy to see that Amazon posed a real problem for large chain bookstores like Barnes & Noble and Borders, it was much less obvious that small independent bookstores would thrive. In much the same way, few saw that ten years after the launch of the Kindle that paper books would surge amid a decline in e-books.

The one overriding trend over the past 50 years or so is that the future is always more human. In Dan Schawbel’s recent book, Back to Human, the author finds that the antidote for our overly automated age is deeper personal relationships. Things like trust, empathy and caring can’t be automated or outsourced.

There are some things a machine will never do. It will never strike out in a little league game, have its heart broken or see its child born. That makes it hard — impossible really — for a machine ever to work effectively with humans as a real person would. The work of humans is increasingly to work with other humans to design work for machines.

That why perhaps the biggest shift in value is from cognitive to social skills. The high paying jobs today have less to do with the ability to retain facts or manipulate numbers (we now use a computer for those things), but require more deep collaboration, teamwork and emotional intelligence.

So while even the most technically inept line manager can now easily produce an application that it would have once required a highly skilled software engineer, to design the next generation of technology, we need engineers and line managers to work more closely together.

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

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Price is Relevant Only in the Absence of Value

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Price is Relevant Only in the Absence of Value

GUEST POST from Shep Hyken

The title of this article may sound like a lesson in sales, but it’s much bigger than that. It’s about the entire customer experience. If a promise to provide value in the CX is built into a company’s mission and values statements, it potentially becomes part of the culture.

Imagine if your organization were bold enough to state that the value it delivers to customers would make price irrelevant. How do you define that value? It’s simple. It’s the value provided in the customer experience. But, remember that your definition of this value is only good if it aligns with what customers want and hope for.

Let’s talk about making price irrelevant. My good friend and fellow customer experience expert John DiJulius has often said, “Make price irrelevant.” He and I jab at each other over this statement. I’ve said, “Make price less relevant. There’s no way you can make price completely irrelevant.” John knows this, and he admits it, but at the same time, he argues the point that if you provide enough value with the experience, you can distance your company from the competition, even while charging more than others. I can live with that because he’s right. We’re just using different words to get us to the same outcome.

Shep Hyken Knockout Cartoon

So, let’s not get caught up in the semantics of these two sentences. We are both in alignment, and you should be, too.

Furthermore, this way of thinking crosses over to the employee experience (EX). Can you create an employment opportunity so fulfilling that people would line up to apply for the job, even though they might make more elsewhere? There are companies, like Disney, that have achieved that. The Disney culture is so powerful that people love the company more than a higher paycheck from another employer. Of course, every company, Disney included, has to be somewhat competitive with compensation and benefits. But in the end, for many, happiness and fulfillment are more important than a few extra dollars in their paycheck.

Let’s close by considering three ideas:

The Alignment: Value in the customer experience and employee experience is non-negotiable. You can’t have one without the other.
The Opportunity: Create experiences that are so enriching that neither customers nor employees can easily walk away, regardless of dollars.
The Challenge: I challenge you to define your version of value and make it so compelling you’re willing to include it in your mission and value statements.

Image Credit: Shep Hyken

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That’s Innovation with Two V’s

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innovvation starts here

Should innovation be spelled with two v’s instead of one?

With so many words starting with the letter v being so central to innovation and rolling up into two even more powerful v words, maybe we should spell it innovvation to help organizations remember to focus on the two keys to successful innovation:

Value
Veracity

The Importance of Value to Innovation

The first v in innovvation is value. Value is such an important v that you will hear me say often that Innovation is All About Value and is composed of three elements:

Value Creation is pretty self-explanatory. Your innovation investment must create incremental or completely new value large enough to overcome the switching costs of moving to your new solution from the old solution (including the ‘Do Nothing Solution’). New value can be created by making something more efficient, more effective, possible that wasn’t possible before, or create new psychological or emotional benefits.

Value Access could also be thought of as friction reduction. How easy do you make it for customers and consumers to access the value you’ve created. How well has the product or service been designed to allow people to access the value easily? How easy is it for the solution to be created? How easy is it for people to do business with you?

Value Translation is all about helping people understand the value you’ve created and how it fits into their lives. Value translation is also about understanding where on a continuum between the need for explanation and education that your solution falls. Incremental innovations can usually just be explained to people because they anchor to something they already understand, but radical or disruptive innovations inevitably require some level of education (often far in advance of the launch).

All of the details of what each of these three keys to innovation success are reside in my previous article Innovation is All About Value. It’s well worth the investment of time to read it.

The Importance of Innovation Veracity

A few years ago I wrote about the importance of innovation veracity and how when it comes to innovation, veracity is all that matters. As a quick refresher, let’s look at the definition of the word veracity from our friends over at Merriam-Webster:

Veracity

1: devotion to the truth : truthfulness
2: power of conveying or perceiving truth

So, veracity is the second v in innovvation. There is probably no better way to spend your innovation time than to spend it identifying the right customer insight and the right way to communicate the solution with customers which you’ve created to serve the insight.

For the three components below that will help you get to veracity, I must give credit to the documentary A Good American (a must see). I will stay away from the politics of the movie so I don’t give away the punchline, and just say that it profiles the work of a group of computer scientists who designed a system to protect American citizens from terrorism at a lower cost and with greater privacy protections than the system that was eventually funded and profiled in a different movie – Snowden.

It’s probably no coincidence that Oliver Stone was involved with both films, but that fact is of course irrelevant to the discussion here. What is important is that the film A Good American contains great monologues by the protagonist that provide insight into the power of meta data.

As an innovation coach what’s important to me so I can help a wide variety of clients, is not the particular context of any particular client, so much as the meta information in a variety of applicable tools and frameworks that I collect or create to serve them. What’s important are the insights that can be applied across all industries and all innovation contexts.

What I’ve been able to extract out of this particular film and into the innovation context, so that I can share them with you, are the protagonist’s view of three components that help you identify signals and drive the transformation of DATA into INTELLIGENCE (or innovation veracity in our context), and they are:

Volume – in order to derive meaningful conclusions you need a lot of data inputs, in this case, lots of idea fragments (ideas come later)

Variety – multiple perspectives are necessary to avoid blind spots and increase the potential for connecting idea fragments

Velocity – volume by itself is not enough, momentum is important too. You have to keep Stoking Your Innovation Bonfire

Conclusion

By focusing on value and veracity in our innovation efforts we will arrive at the most important goal of our innovation pursuits – and yet another v – Victory!

So dig deeply to understand where value comes from in your context, and then keep digging. Only when we truly understand the sources of value in any particular context can we create new sources of value for the value consumers in that context, create the proper means of accessing the value, and translate that value for people in the context and in adjacent contexts that might expand the consumption of the new value.

And strive to also understand the indisputable truths in your context that will enable you to achieve the veracity and the resonance you will need to renew the organization’s permission to exist in your context, fuel your continued success, and ensure your next victory.

Download the PDF version here:

Keep innovating!

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Where Does Value Come From?

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Where does value come from?

What makes people willing to pay $50 for a t-shirt that’s just like the one that ten other people are wearing in the club?

What makes people pay a premium for Apple products with features introduced by other companies months or years before?

If you are truly trying to be innovative, instead of creative or inventive, you MUST understand how your prospective customers assign value for the new solution you are about to introduce. This may require lots of customer interviews, ethnography, forced choices, and other upfront research, but it’s worth it, because if you don’t build your potential innovation on a new, unique insight then it has no chance of succeeding in the marketplace. And as I’ve said before, to achieve innovation you have to focus not just on creating value in the product or service itself, but all three sources of value:

Value Creation
Value Translation
Value Access

So, let’s get back to the $50 t-shirt…

Here in Seattle we are proud of Macklemore and Ryan Lewis, who became a chart topping rap music music act by choosing not to follow the traditional way of making it in the music business so they could not only maintain their creative freedom, but also to make more money. Their mega-hit “Thrift Shop” pokes fun at fashionistas and has helped to make thrift shopping cool instead of embarrassing. Thank you to their combination of skills, they’ve been able to do a lot of the hard work themselves to promote their music, including making this video:

By remaining independent, Macklemore and Ryan Lewis are free to collaborate with whomever they want, when they want, and with sponsors who add value in specific ways consistent with the current project they are working on, instead of a record company extracting a rent from all the artist’s activities (whether they are adding value or not). Here is one such project they undertook with another local artist, Fences, and sponsorship from a company headquartered here locally – T-Mobile USA. It’s a great song and a pretty cool video if you haven’t heard or seen it before:

I for one am grateful that Macklemore and Ryan Lewis didn’t sign a record deal, and record executives have candidly admitted that they would have totally ruined the act by forcing them to change to be more “marketable.” The success of Macklemore and Ryan Lewis (and others) serve to highlight the disruption in the music industry value chain that continues to occur, creating discontinuities that artists like Macklemore and Ryan Lewis can take advantage of. This is of course as long as they have the digital and social skills to get the word out and help their music spread.

Is there disruption happening in your industry’s value chain?

How can you take advantage of the discontinuities?

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Optimizing Innovation Resonance

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Optimizing Innovation Resonance What does resonance mean to you?

The word has many different dictionary definitions depending on the context, but most of them focus on vibrations reaching an ideal state.

Here are two of the most relevant dictionary definitions for our innovation resonance context today:

“a quality of evoking response” (Merriam-Webster)

“the effect of an event or work of art beyond its immediate or surface meaning” (Bing)

Here also are a couple of my favorite resonance quotes:

“I think whatever resonance I may be able to achieve is in part simply from the amount of reading and learning that I acquired along the way.” – Robert B. Parker

“I think if the movie has resonance and stimulates the viewer to talk about it, you can have as large an audience as you want.” – Andy Garcia

I’ve written in the past about how innovation is all about value and about how innovation veracity is more important than innovation velocity. Now it is time to take the innovation conversations about value and veracity to the next level – to innovation resonance – and how difficult it is to achieve and maintain.

Optimizing Innovation Resonance Achieving innovation resonance is about going from 1+1=2 to a state where 1+1+1+1=7, where the sum of the valuable parts in some new potential innovation suddenly becomes greater than the individual components and value may be created that you might not have even anticipated. When you reach this state of innovation nirvana, the power of resonance pushes your invention over the line from invention to innovation, and adoption becomes widespread. People start talking about, spreading it like a virus, and ultimately supplementing your marketing efforts in much more effective ways.

To achieve innovation resonance you must create value with innovation veracity and deliver it in a product or service with the right velocity and course corrections as you bring your potential innovation into the marketplace. Innovation veracity is about identifying the truths that are important to the customer in the problem space you are investigating, the inspirations and the insights that will hopefully lead to better ideas, more value creation, and hopefully, eventually – innovation resonance.

You’ll notice that I used the words hopefully and eventually in the last sentence in relation to achieving innovation resonance, and this is because our best attempts to anticipate the wants and needs of the marketplace will not always be immediately correct, and may require course corrections in the product or service to better match the expected or desired value.

And the ultimate value encompassed in a potential innovation attempting to achieve resonance, comes from three main sources:

1. Value Creation
2. Value Access
3. Value Translation

Innovation = Value Creation * Value Access * Value Translation

You’ll notice in this equation that the parts multiply, and as a result if you do any of the three badly, your potential innovation will fail. But do ALL three well and you will have the opportunity to achieve innovation resonance.

Innovation Resonance Venn Diagram

Optimizing Innovation Resonance

To optimize the value creation component of innovation, you must seek innovation veracity early on, identifying the fundamental truths upon which your potentially innovative solution will be built. During the value creation process you must prototype early and often to test and learn whether your insights are correct and resonating in their expression within the product or service as you expect. From the reactions to your prototypes you must evolve the solution to create more value.

To optimize the value access piece of innovation, you must seek to identify where friction is created in the delivery of your solution and seek to remove it. Carefully observe both where things are awkward or difficult for you to produce and scale the solution, and for your customer to consider and consume it. These friction points represent an opportunity to remove barriers to adoption and to increase potential innovation resonance through better production, purchase and consumption experiences.

To optimize the value translation piece of innovation, you must first identify the gaps in understanding and readiness among your target customers, your plan for working to close these gaps and prepare the market for your launch, and then you’ll want to find your picture or image that communicates a thousand words. Most importantly, you must be aware that the more disruptive your potential innovation the more you may have to educate your potential customers before you even try to sell to them, and so you must build the appropriate amount of market preparation time into the launch plan for your potential innovation plan. Thought leadership marketing and innovation marketing strategies can be very powerful here to help customers understand how the new solution will fit into their lives and why they will want to abandon their existing solution – even if it is the ‘do nothing’ solution.

Resonance Example #1 – The BMW Mini – Barbie in Motion

Barbie Mini Cooper One of those most fun, visually appealing vehicles on the road has to be BMW’s re-release of the Mini. I don’t have one, have only ridden in one once, but whenever I see one driving around, it makes me smile. And if you have any question about whether or not the Mini has achieved a level of resonance (at least in the USA and probably elsewhere), then how would you explain the photo of the Mini on the left that shows you can buy a Mini to drive Ken and Barbie around in? Can you buy a convertible Chrysler LeBaron for Barbie to drive around in? No, but you can buy a Fiat 500, another car achieving resonance here in the USA.

Resonance Example #2 – iPod Nano – Falling from the Pinnacle

iPod Nano 6th Generation The iPod Nano is a great example of the rise and fall of innovation resonance. The iPod took three years to take off (right about the time the iPod Nano was released). The trigger for innovation resonance was the Windows version of iTunes (Value Creation), combined with the launch of Apple Retail Stores (Value Access), combined with the iconic advertising campaigns (Value Translation). The iPod became a phenomenon with sales peaking in 2008 right after the iPhone release. Sales have been falling since then, but during this decline came the September 2010 release of the 6th Generation iPod Nano – which resonates to this day – so much so that Apple replaced the design six months ago to protect the market for their upcoming iWatch.

Maintaining Innovation Resonance

As we know from music, to maintain resonance, you must continue to inject energy and focus into the system – a bell won’t ring forever. And as we know from human psychology, just because you continue to ring the bell doesn’t mean that people will continue to want to listen to it in the same way forever. Tastes change, preferences change, the definition of value for each component creating value for customers can potentially change. And so to remain the market leader, to maintain innovation resonance, you must continue to observe, to learn, and to modify your solution to optimize the innovation value equation as needed over time.

One great example of an innovative organization losing resonance over time was Dell. They (and a handful others) came into the PC marketplace with a disruptive business model, captured market share, rose to #1, and then gradually started to lose their position because they didn’t recognize a shift in the relative value of cost vs. design in the marketplace, causing them to lose market share to HP, Apple and others.

One way to look at the difference in strategies between HP and Dell might be to use the Strategy Canvas from the Blue Ocean Strategy methodology. You can see an example of a Strategy Canvas for the wine industry here:

But traditional Blue Ocean Strategy (or Value Innovation) is very static. As you can see, building a Strategy Canvas using Blue Ocean Strategy methods is a snapshot in time looking at the relative performance of a company on a selected set of value dimensions against its competition. To sail into a Blue Ocean the theory goes, you must select certain value dimensions to either:

Raise
Eliminate
Reduce
Create

But as we know, value dimension performance, value dimension importance, and the competitive dynamics within the industry are not static, but change over time.

It is because of this weakness in the Blue Ocean Strategy methodology that I layer on the investigation of value dimension performance and importance onto any Value Innovation work that I might do. You can see in the two example images below related to the Dell vs. HP example about how changes in performance over time on certain value dimensions relative to what is “good enough” in the minds of customers can lead to changes in the relative importance of various value dimensions in the mind of the customers.

Value Dimension Performance Value Dimension Importance

Because we cannot perfectly predict how customers will consume our product or service when we bring it to market, and because of the shifting sands of value force you to continuously re-evaluate the current situation with value dimensions and value importance, we must re-evaluate where we see the innovation process beginning and ending. Smart companies are recognizing that is not just about coming up with a great idea, or having a great launch, but about creating a commitment to launching, learning, and dialing in success by working to create and then maintain innovation resonance. Whirlpool Corporation, one of the early pioneers of a systematic pursuit of innovation excellence, has seen this and has created a commitment to launching and learning and has added a third diamond to their double diamond innovation methodology called ‘Deliver and Grow’.

Moises Norena, the Global Director of Innovation at the Whirlpool Corporation, was kind enough to share these thoughts:

“While we put a significant emphasis in the front end of innovation and in the commercialization phase, we recognize that you can not launch a product and sit and wait for its success. With the third diamond we assure that innovation teams stay engaged in the product management while it is in the market, contrasting the results with the predictions, not only on business performance but against the consumer and trade promise they were designed to deliver. We also ask these teams to use the innovation tools and process to identify opportunities to experiment and to maximize value extraction from the market.”

Conclusion

To achieve and maintain innovation resonance, you must nurture a commitment to learning fast, both during the innovation development process and after the launch of a potential innovation. You must maintain a laser focus on how you are creating value, helping people access that value, and translating that value for people so they can understand how your potential innovation may fit into their lives. So, do you have processes in place as part of your innovation methodology for measuring and evolving solutions in place to help you get to innovation resonance?

If not, keep a focus on value creation, value access, and value translation, use my evolutions of the Blue Ocean Strategy framework, and have a look at The Eight I’s of Infinite Innovation framework that I created or at the Whirlpool Corporation’s Triple Diamond methodology to help you deliver and grow more successful innovation into your organization, and hopefully reach some level of innovation resonance.

Build a common language of innovation on your team

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Innovation Ripe for the Plucking

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Innovation Ripe for the Plucking Too often we all run around trying to pluck a gamechanging idea out of thin air that nobody has ever seen, solving a problem that has never been solved, when really if the truth be told, there are still lots of existing problems with lots of solutions that are still waiting for a simple, elegant solution.

Is Quirky’s new ‘Pluck’ one of those simple, elegant solutions that you wish you had thought of? Are there other products that do this job better. Are you jealous of the margins they are likely to earn on such a simple product (assuming people are willing to pay the $12.99 asking price)?

Well, whatever you think, the Pluck is a great example of how innovation can come from the simple just as much as it can come from the complex, because innovation after all is about transforming the useful seeds of invention into solutions valued above every existing alternative – and then making the result widely adopted.

So, are you overcomplicating things in your search for innovation?

Moral of the story – Don’t be afraid to break a few eggs in your quest for innovation.

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VIDEO – Innovation is All About Value

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I share my definition of innovation and the role of value in innovation in this clip from one of my many innovation speeches. This clip is from a corporate event to kick off the next phase of innovation efforts at FCS America.

This video brings to life some of the content in the popular article Innovation is All About Value.

I am the author of the popular book Stoking Your Innovation Bonfire from John Wiley & Sons, and advise clients beginning their innovation journey or seeking to enhance the innovation efforts they’ve begun already.

I am an experienced innovation keynote speaker at conferences and private innovation events for corporations, government, and other organizations, and also deliver a two-day Masterclass around the content in Stoking Your Innovation Bonfire to organizations around the world.

To book me for your conference or event, please click here.

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You Cannot Always Invent Your Way to Innovation

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You Cannot Always Invent Your Way to Innovation I’d like to start today with a quote from a NASA article in Fast Company – “But sometimes the better part of innovation, is not invention but effectiveness.”

I’ve detailed my views before on how invention is not the same thing as innovation, but to build upon them and the quote above – sometimes progress or innovation is achieved by taking value out of a product or service. Southwest Airlines created innovation not by giving passengers more food, more legroom or more options, but fewer. Apple succeeded with the iPod, not by providing more capacity or more features, but by making the features they provided more beneficial than the competition.

People ultimately do not care whether a product or service is better at the tasks it is asked to perform, but whether it more effectively meets their needs. These are not the same thing, and in fact make success far more difficult.

A sponge may clean better than all other sponges at absorbing liquids, but if to do so it has to smell like a wet troll, it is ultimately not going to be the sponge most effective at meeting customers needs (or likely to make repeat visits to their shopping baskets). Success becomes more difficult because customers don’t always surface their needs. Chances are your market research wouldn’t have surfaced their need for a sponge not to smell like a wet troll. But if succeeding becomes more difficult when success is not purely a technology challenge, then this is a good thing for the truly committed, because difficulty creates opportunity.

So during the product development process, don’t ask yourself “How can we make X do Y better than the competition?”. Instead focus people’s attention on asking “How can we better meet our customers’ needs?”. If you focus on the second question, the competition becomes almost irrelevant, and you will become better at creating products or services that are more likely to be valuable instead of merely useful, and that is where true innovation lies.

What do you think?

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Human-Centered Change and Innovation

Innovation, change and transformation thought leadership, lovingly curated by Braden Kelley

Tag Archives: value

Unlocking Trapped Value from the Technology Adoption Lifecycle

Delivering Customer Value is the Key to Success

Value Doesn’t Disappear

It Shifts From One Place to Another

Why Robots Aren’t Taking Our Jobs

The Outsourcing Dilemma

The Social Impact

You Can’t Compete With A Robot By Acting Like One

Price is Relevant Only in the Absence of Value

That’s Innovation with Two V’s

The Importance of Value to Innovation

The Importance of Innovation Veracity

Veracity

Conclusion

Download the PDF version here:

Optimizing Innovation Resonance

Innovation Ripe for the Plucking

VIDEO – Innovation is All About Value

You Cannot Always Invent Your Way to Innovation