Create Value Innovation

Innovation Through Simplicity

One of the 6 utility levers of Blue Ocean Strategy is simplicity.  As we look across the stages of the buyer experience, how do we make it simpler for the user, the buyer and the "influencer" to do business with us, and more importantly, to create huge leaps in value for THEM?  While Kim and Mauborgne make the point that simplicity requires little explanation, it is becoming clear to companies who try to innovate that finding and creating simplicity is the real challenge.

In an effort to compete, companies add more and more features and options.  Over time, the effort to address the needs of the mass of customers makes it tougher for any individual customer to simplify their work.  Let's look at enterprise software, for example.  SAP has created a huge, integrated suite of ERP applications that can support the operations of large companies.  The value cost trade-off is that while an integrated system is easier to support, the underlying database structure is so complex that customizing the application to specific business needs is extremely expensive. 

CRM has taken off in new directions - precisely because IT often cannot respond fast enough to support the sales end of the business.  Rather than forcing customers to deal with the cost and complexity of monolithic ERP applications, on-demand vendors like Salesforce.com have exploded with an offer targeted directly at the business user:  pay a fee, set up your CRM environment in a few hours and you are off and running.  Okay, that's great for management - the system is up quickly, with little IT involvement.  In addition, the behind-the-scenes software upgrades are pretty much transparent.  But this, too has created another layer of complexity:  integration and the user experience. 

Most salespeople are not just concerned with contact and pipeline management.  Increasingly, sales is responsible for the profitability and follow through on the business they capture.  In response, Salesforce.com is focusing more attention on integration.  Their success has created a Blue Ocean in on demand applications.  Okay, better for management and IT, but what about the user?  (Note:  Not everyone loves Benioff & Co.  See "Thoughts on Salesforce.com")

If we really want to simplify work for the user, how can we either make the new solution part of their existing rhythm, or make the nature of the work simpler in itself?  If most salespeople use Microsoft Outlook to communicate and manage contacts, why not use that same interface for CRM and other applications?   That is exactly what Microsoft is betting on with Microsoft Dynamics CRM.  Their approach is to use Outlook as the interface to reduce the time and complexity of user training.  They are also offering a common code base for on demand and customer-installed applications to allow for greater enterprise flexibility.

Next comes Google, who would like to change the world's desktop habits with their hosted applications.  And there are others picking points along the user and buyer experience cycle, attacking specific utility levers.  Which one is going to be the next leader?  My bet is on those who figure out best and fast how to simplify work on behalf of users and customers - while reducing their own cost to serve their customers.  That does not mean that these vendors abandon their vision for user-driven feature requests.

How do we wrap our arms around this animal called simplicity?

Fast Food - Innovating Outside-In?

As a follow up to last week's comments about the fast food industry's focus on toys vs. food quality to leverage kids' growing influence on purchase decisions, we may be seeing an external catalyst for change - Disney.

The Walt Disney Company announced today that they will introduce guidelines that are designed to lower fat and sugar in foods served in their theme parks.  These guidelines will extend to marketing partners, like McDonald's, who has a 10-year exclusive agreement to promote animated movies with  Happy Meals.

Is this two companies coming to the same conclusion, with shared interest in protecting and improving their brand reputations?  Or is Disney the catalyst?

Disney must be among the top 5% of companies associated with fun.  If eating more healthy food can be fun - and if kids and their parents can make that connection - then Disney may be on to something.  On the other hand, McDonald's could be driving this because they know that fun and healthy are not necessarily part of their brand identity.  By kicking up the fun factor with Disney, and if they can capture the persona of some key Disney characters, perhaps we might see the start of a shift in the healthiness of fast food for kids.

Now, if they could just jack up the taste and quality meter!

Drucker on Innovation

"Innovation can be defined as the task of endowing human and material resources with new and greater wealth-producing capacity."

". . . every managerial unit of a business should have responsibility for innovation and definite innovation goals.  It should be responsible for contributing to innovation in the company's product or service; in addition, it should strive consciously to advance the art in the particular area in which it is engaged"

"Managers must convert society's needs into opportunities for profitable business."

" Peter Drucker, Management:  Tasks, Responsibilities, Practices, 1973, page 67

Reviewing Drucker's work, I am struck by the continuing relevance of his comments, more than 10 years before he published Innovation and Entrepreneurship.

How I Wasted My Tuesday Morning

To become better at anticipating, at innovating, we cannot be surprised by new ideas.  We have to maintain this simultaneous wonder at what is new, without being awestruck by it.  Knowing about change, seeing it, recognizing the new idea, while wishing we were part of it, and then reflecting on it - getting in the way of innovation:  all of this makes us better innovators, salespeople and leaders.

This past Tuesday, The Masters Forum featured Reinier Evers, founder of trendwatching.com.

Among other things, Reinier discussed an emerging trend he calls, STATUS SKILLS:

"In economies that increasingly depend on (and thus value) creative thinking and acting, well-known status symbols tied to owning and consuming goods and services will find worthy competition from 'STATUS SKILLS': those skills that consumers are mastering to make the most of those same goods and services, bringing them status by being good at something, and the story telling that comes with it."

What next?  I think those new stories will require either a willing audience or some assistance for the storytellers.  A resort either has to trust that the guest will tell the story well or help the guest to craft a compelling tale.  The cooking school might suggest some ways to tie in stories about the farmers who grow the produce or the wine makers who enhanced the experience.  Perhaps the resort that writes postcards on behalf guests is going too far.  A story is best told by the person who directly engages in the experience. But for the benefit of the family and friends back home, perhaps a short course in effective storytelling would enhance the experience all around.

The world can always use great storytellers!

Innovator's Lessons from 9/11

What is happening in this picture?  What do you think the people are talking about?

Here is one point of view from the Book, Watching the World Change:

Seen from the perspective of 9/11's fifth anniversary, Mr. Hoepker's photo is prescient as well as important—a snapshot of history soon to come. What he caught was this: Traumatic as the attack on America was, 9/11 would recede quickly for many. This is a country that likes to move on, and fast. The young people in Mr. Hoepker's photo aren't necessarily callous. They're just American. In the five years since the attacks, the ability of Americans to dust themselves off and keep going explains both what's gone right and what's gone wrong on our path to the divided and dispirited state the nation finds itself in today.

If you ask the people in the photo, here is what they have to say:

(From Walter Sipser)  "We were in a profound state of shock and disbelief, like everyone else we encountered that day. Thomas Hoepker did not ask permission to photograph us nor did he make any attempt to ascertain our state of mind before concluding five years later that, "It's possible they lost people and cared, but they were not stirred by it." Had Hoepker walked fifty feet over to introduce himself he would have discovered a bunch of New Yorkers in the middle of an animated discussion about what had just happened."

And:

(from Chris Schiavo):  "I am also a professional photographer and did not touch a camera that day. Why? For many reasons including a now-obvious one: This somewhat cynical expression of an assumed reality printed in the New York Times proves a good reason. (Shame on Mr. Rich and Mr. Hoepker—one should never assume.) But most of all to keep both hands free, just in case there was actually something I could do to alter this day or affect a life, to experience every nanosecond in every molecule of my body, rather than place a lens between myself and the moment.

So what?

When a Simple Picture is Best

I recently read Dan Roam's observations about working in 3D and the difference between operating in real vs. virtual worlds (actually touching and snapping Lego together vs. creating a virtual Lego design.  See Digital Roam: Got my Legos in a twist). It reminded me of a recent tour I took with my family to historic Fort Snelling, on the banks of the Mississippi, here in the Twin Cities.   The connection is this:  Sometimes we get too caught up in our complex tools and media to communicate the essence of ideas and experiences.  In the process, we lose the audience and they lose our message.  Sometimes, simpler is better.

During the World War II, Fort Snelling, Minnesota, was an intake center for new military recruits.  I took a photograph of this simple process diagram that hangs in the Fort Snelling reception center.  This display grabbed me for the simple way it captures the essence of the recruit's experience, while clearly laying out what was expected.  Imagine you have just enlisted into the service in 1941 and you have arrived at Fort Snelling to start the process of becoming a soldier.  Click on the picture to see the detail.  Notice the simplicity - there are two parallel paths - one for the recruit, one for the paperwork.  Notice the humor at each stage, alternately poking fun at both the recruit and his predicament - and the Army itself. 

Then realize that this process flow diagram was drawn by hand!  There was no flashy video, no 30-page PowerPoint briefing, no web-based tutorial.  The process is clear.  The sequence is logical.  While the context of the time meant this was serious business, a little humor broke up what had to be a tension-rich environment.

Think about your people as they "enlist" or are "drafted" for your next change initiative.  Think about the mixed feelings of opportunity, personal relevance, ability to perform, the meaning of the mission, risk and more. 

Sometimes a simple picture to communicate the change, peppered with appropriate humor, helps people relax and start the process of moving forward.  (Think about your customer experience as they start a new relationship with you, or where your innovation creates an entire new context for the relationship!)

• What examples of simple visualization can you point to that have helped people work through change?
• When is it better to go high-tech and sophisticated vs. simple and straightforward?

Time to Add Some Fun - How to Be Creative

As I reviewed some of the ideas I have been blogging about, I realized that the fun and humor I bring to my work is not coming through here.  One of the six Utility Levers in Blue Ocean Strategy is "Fun & Humor."  Okay, Greg, if you expect us to apply this stuff, what about you?  That's a fair question.  How do I inject fun and humor into these postings about the "serious" business of value innovation?

In the interest of moving quickly, I short-cycled the process of adding humor - I outsourced it.  Look for the Gapingvoid widget on the right hand side of the page, then click through to see more of Hugh MacLeod's work.  Hugh creates marvelous visual thought pieces in the space of the backside of a business card.  He has an eye for reality that cuts right to it!  Sometimes edgy, sometimes sweet, sometimes it just knocks you on your backside!

Hugh also offers a list of 31 tips entitled, How to Be Creative.   Check it out.  You will get some great insights and 31 more great examples of his work. Among my personal favorites:

2. The idea doesn't have to be big. It just has to change the world.

13. Never compare your inside with somebody else's outside.

17. Merit can be bought. Passion can't.

19. Sing in your own voice. (With thanks to Barbara McAfee)

22. Nobody cares. Do it for yourself.

26. Write from the heart.

I believe that humor is all about unexpected connections.  It is the punch line that you do not expect that makes you laugh.  It is unexpected value that grabs the attention, then the heart of the customer.  That is what creativity is about.  That is what value innovation is all about.  People love surprises - so long as they happen in ways that they expect!

Have fun, savor, enjoy the ride!  Meantime, I will be building my own unexpected connections.  Stay tuned.

Introduction

Welcome to this blog, dedicated to exploring, understanding and creating value innovation. 

In my work advising companies on customer value strategy, I find that many companies' attempts to improve customer value turn out to be too costly, ineffective or both.  Sales teams are willing to offer more and more to win bloody, competitive battles.  Yes, they win the business sometimes.  But they do so at the expense of their margins, their cost to serve or their agility.  In addition, they systematically teach their customers to ask for more giveaways - and get more - the next time.

Value innovation, as described in the book, Blue Ocean Strategy, by Renee Mauborgne and W. Chan Kim, is focused on "making the competition irrelevant by creating a leap in value for buyers, thereby opening up new and uncontested market space."

Many companies believe they must choose between either differentiation or cost reduction.  BOS focuses on simultaneously improving customer value and low cost.

Innovation does not have to start as a "corporate" initiative, though often it does.  Customer-facing teams, for example, are on the front lines of what matters to the customer and how they can help them drive value.  Value innovation can start at the point of contact.  In addition, for value innovation to really take hold in an organization, it is a huge accelerator and sustaining force if the thinking behind it is woven throughout.

This site is about inspiring and sharing solid thinking and effective action by exploring everyday examples of innovation. Along the way, we will connect with other thought leaders in innovation and organizational change.