Voices: the CMB Blog

Geoff Nicholson, 3M ambassador and former vice president for international technical operations, was recently quoted as saying “Six Sigma ‘killed’ innovation at 3M.” His reasoning? The Six Sigma process requires a full-blown business case and even a 5-year business plan to get a new idea off the ground and into production. The result: a company once synonymous with innovation saw its new product introductions drop and ranking as a BCG innovative company plummet from number 1 to number 7 in four years’ time.

Nicholson describes a core challenge to scaling innovation: how do you institutionalize it 

without stifling it?

Frameworks like Six Sigma and Stage Gate rely on strict “go-no-go” decisions at key junctures, based on quantified metrics such as market size, market share potential, volumes, etc. Quantifiable approaches like this work best with incremental innovations, such as line extensions or expansions into adjacent markets.

But, breakthrough innovations—the Model-T, iPod, Post-It Notes—target new-to-the-world markets and demand curves that are hard to quantify.

An alternative approach to assessing demand for a new offering is to take it through a proof-of-concept evaluation. With a small budget, a team of individuals passionate about the idea can use small-scale testing or research techniques to understand whether the idea works and if people want it. One of our clients always sets aside 15%-20% of his funds for sussing out new, big ideas in just this manner.

Without a doubt, companies seeking to innovate should try to learn rather than re-invent the wheel with each initiative. That is one reason South Street recommends clients seeking to “institutionalize” innovation do so with a playbook, rather than a process. A playbook assumes there are some generally repeatable steps at a high level, but they can be re-ordered and prioritized/de-prioritized based on management discretion and the unique nature of the opportunity or challenge addressed. This requires a deeper knowledge of different methods, deeper thought and judgment on the part of participants and more institutional agility, but it also ensures that the right tools are used at the right times. As the 3M story illustrates, instituting a one-size-fits-all process for innovation actually erodes this very capacity.

Is process killing your innovation?

Rachel Corn is a Director at  South Street Strategy Group, she specializes in finding growth opportunities in new market segments, new products and businesses and innovative business models.

South Street Strategy Group, an independent sister company of Chadwick Martin Bailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

In recent years, innovation has become the latest catchword in US boardrooms, and even slow moving industries not normally associated with innovation suddenly see it as a capability critical to survival. Recently, however, a quiet backlash is forming as the word conjures up images of afternoons lost to brainstorming sessions and stickie-noted walls, with little to show for it in the bottom line.

The fact is, most corporate innovation initiatives—regardless of industry—will fail. And the seeds of that failure are often contained in the lack of clarity on what innovation is and how it will help the company achieve corporate goals. For any business leader, innovation must be viewed as a means to an end. In our experience, the best innovation programs are focused growth initiatives with clear business goals or at least parameters, not a free-for-all of ideas. Thus, we define innovation as the process of finding new and better ways of helping customers achieve their goals in a way that creates value and growth for the company. It’s all about creating value for the customer, and capturing that newfound value to increase the bottom line for the company.

Using this definition, innovation need not be as far-reaching as a new branding campaign or a shake-up-the-industry product in order to be a success. In fact, for most companies innovation is less about coming up with new ideas and more about re-purposing or combining existing ideas into a better solution. Uncovering these opportunities requires a multi-method approach we call Focused Innovation, which is based on the belief that the strongest innovation strategies are built on superior market insights and a laser-like focus on customers’ goals.

How “focused” is your innovation strategy?

Posted by J. Mark Carr, Mark is co-founder and managing partner of South Street Strategy Group.

South Street Strategy Group, an independent sister company of Chadwick Martin Bailey, integrates the best of strategy consulting and marketing science to develop better growth and value delivery strategies. 

Join us, in Boston, May 6th-8th at The Front End of Innovation Conference for: Focused Innovation: Creating new value for a legacy brand

Come enjoy visions of distant lands and mouth-watering adventures as you learn how Tauck Worldwide, an 85-year old tour company, applied the principles of focused innovation to successfully reinventing its core offering for a new audience: the affluent baby boomer.

Speakers:

• Jeremy Palmer, Vice President; General Manager TWD Land, Events & New Ventures, Tauck

• Judy Melanson, VP, Travel and Hospitality Practice, Chadwick Martin Bailey

• J. Mark Carr, Managing Partner, South Street Strategy Group

This summer, a Harvard Business Review case study presented the dilemma of a modern dance  company caught between their mission to grow and enter new markets, and their mandate to remain creative and groundbreaking. The arguments on both sides are pretty compelling.  A new employee pleads her case that the dance company needs to know who their customers are and what they want, while the Company’s founder argues this information would be detrimental to creating challenging dance performances— “if we ask them what they want, we’ll end up doing Swan Lake every time.”Conversations like these aren’t just happening in the halls of fictional dance companies, they’ve been challenging companies for at least a century. Take this quote from Steve Jobs, founder of what is arguably the most consistently innovative company today:

We figure out what we want.  And I think we’re pretty good at having the right discipline to think through whether a lot of other people are going to want it too.  That’s what we get paid to do. So you can’t go out and ask people, you know, what’s the next big [thing]?  There’s a great quote by Henry Ford, right? He said, ‘If I’d have asked my customers what they wanted, they would have told me ‘A faster horse.’ [2008 Interview with Fortune magazine]

In the past several years, I’ve sat in on talks, read articles, and spoken to lots of product developers who now feel that research and talking with customers provides little, if any, value.  They invariably point to Apple or that ubiquitous Ford-ism, but it seems to me that those who are dead set against customer research are missing the point.  It’s not the customers’ job to develop the solution, it’s simply the customers’ job to tell you about their experiences and what they’re trying to accomplish.  In the famous quote by Henry Ford, the takeaway isn’t that they should develop a faster horse.  Instead, it’s that people want to travel faster, and Ford came up with a better solution.

Let’s look at Apple, for example, if you take the latest version of the iPad, you’ll see they haven’t ignored customers at all.  People are more connected today than at any other point in history; our desire to connect with people and share, access, purchase, and manage media/content from anywhere at any time has only grown stronger with time.  Recognizing these trends, Apple made an incremental shift in current tablet technology and created a game-changing product.  The iPad might not be the perfect device for every user, but it performs great on attributes that allow us to connect with one another and consume content. 

What makes Apple special is their ability to anticipate needs becoming more important and that's what they did in the case of the iPad. But they don't just understand the customer needs from a macro level, they have a complete and nuanced understanding of the detailed needs that make up the entire customer experience.  So when it came time to build the next generation of tablets, they made the right decisions about screen size, processing speed, connectivity options, virtual keyboard size, touch screen sensitivity, gestures, etc., because they knew what mattered to customers.  The customers’ experience was the driving force behind those decisions.  This vision allows Apple to consistently churn out game-changers.

But donning a black turtleneck and taking the buttons off of your products won’t get you the next iPad.  While Apple may not engage in typical customer experience research, they have a culture that is customer focused from top to bottom. Their product development process is motivated, from concept to implementation, by the goal of providing seamless, user experience. Apple’s greatest innovations—the iPod, iPhone, and iPad—embrace simplicity and usability. Uncovering customer needs and creating products and services to meet them doesn’t require one of the greatest visionaries of all time, it can come through comprehensive customer experience research.

So we’re back to our dance company. How can they maintain their desire to grow with their commitment to boundary breaking dance?  The answer is customer research that identifies all of the customer wants and needs for a given product/service, and then tells you which ones matter the most.  Show goers may say they want to see Swan Lake, but do they really mean they want to recreate a powerful experience they had the first time they saw dance? Customer research that focuses on needs is a powerful tool, and critical to innovation whether developing a dance program or building a new processor. By knowing what matters to customers, organizations can discover unmet needs, find opportunities for disruptive innovation, know where to focus resources, and set the foundation for developing game-changing products and services

Needs based customer research is not about asking the customer to dream up the next new product, feature, or technology.  Nor is it about learning new ways to sell customers products they don’t really want.  It’s a proven method to help organizations connect with their customers and focus on what matters to them.  Apple’s success is based on a fundamental and detailed understanding of their customers.  Do you understand your customers in that way—or are you giving them Swan Lake?

Posted by Andrew Wilson, Andrew is an Account Director at CMB, he isn't sure about modern dance but awaits the iPad Mini with baited breath.

Headed to TMRE in November? Enter our code at registration and take 25% off the conference pass: CMB2012

Chadwick Martin Bailey's Andrew Wilson talks about the role of customer experience in helping organizations innovate, and why getting and understanding the answers to what your customers want and need is critical for successful innovation.

Andrew Wilson is an Account Director at CMB. He's a skier and long-distance runner, he also has a delightful 3 year old lab who deserves his own video.

Earlier this month I had the chance to present at the Market Research Technology Event in Las Vegas. Beyond the fact I just could not get accustomed to watching people walk by conference rooms swigging beer and wearing in flip flops; for me the event raised more questions than provided answers.

During the conference, one of the most quoted reports was McKinsey’s: Big data: The next frontier for innovation, competition, and productivity.  For me, one of the most striking takeaways from the report was a prediction that by 2018, the US will have a shortage of talent necessary for organizations to take advantage of big data—the US alone could face a shortage of 140,000 to 190,000 people with deep analytical skills as well as 1.5 million managers and analysts with the know-how to use the analysis to make effective decisions.

After we market researchers take a moment to celebrate our job security, we should consider that skilled market researchers will be asked to fill the space by taking on more tasks and working longer hours.  As the gap widens between the influx of data and the analysts we need to make sense of it, are 80 hour weeks inevitable? Certainly workforce globalization will be a key to filling “big data” needs, but I was very surprised to hear little discussion of how technology will help us deal with this shortage.

I left the conference with the theory that the “new technology” we need is the yet-to-be-realized application of a tool to change a process to yield a quicker, lower cost, or better quality outcome.  I think market researchers have yet to focus on how technology can act as a surrogate for the role they play within their organizations

So what might the future hold? I expect technology will allow market researchers to develop “analytical bots” to make sense of the vast ocean of data to answer specific business questions raised by internal clients. Watching Watson and Siri answer questions of fact with extremely high accuracy makes me wonder what our role will be.  If these machines “have all the answers” then what purpose do we have?  I don’t believe technology will replace market researchers; their skillset and output are still critical for companies to be competitive.  The purpose is to create the rules and algorithms that convert the facts into relevant information.  This is where market research skills will combine with technology to fill the resource gap.

We’ve heard a lot about expert systems—computer systems that emulate human decision-making. It’s my view that the market researchers who will lead in the next 5 to 7 years will be those who are setting up and managing expert systems, that take all of the facts and computations within large sets of data and apply what is relevant, to make decisions quickly, anywhere, and at any time.

Did you miss us at TDMRE? We'll be at the Audience Measurement Event in Chicago from May 21st to the 23rd. Register for a 25% discount by entering CMB2012 here.

Posted by Jeff McKenna, Jeff is a senior consultant at CMB and team leader for Pinpoint Suite-our innovative Customer Experience Management software. Want to learn more about how Pinpoint Suite can help you make sense of your "Big Data," schedule a demo here.