innovation.net

Review: The Wide Lens by Ron Adner

I just finished reading a pre-release edition of The Wide Lens: A New Strategy for Innovation by Ron Adner of Dartmouth.  I understand the point of the title, but it doesn’t really immediately impart the true nature of this book, which is focused on how to commercialize innovation with a proactive view and understanding of the players in its ecosystem. 

I’ll tell you upfront, I was excited to finally see a book that’s addressing this topic that is near and dear to my heart.  Professor Adner makes the case that not understanding and contemplating the co-innovation risks and value chain risks in bringing innovation to market is one of the reasons many innovations fail.

Adner highlights many examples of failed innovations from a lack of ecosystem/value chain understanding (excerpted from Fortier Public Relations release) :

• Nokia spent millions to be first to market with a 3G handset, but failed to profit because critical partners in its ecosystem did not complete their innovations in time.  By the time customized video streaming, location based services, and automated payment systems were finally ready, so was the competition. We see this same dynamic with 3D TVs today.
• Pfizer’s miraculous inhalable insulin approved by the FDA, hailed by Wall Street analysts, launched with huge fanfare ended up as one of the biggest failures in the history of the pharmaceutical industry when endocrinologists wouldn’t embrace the requirement of lung function testing.

• Michelin’s big innovation in tires—designed to run for 125 miles after a blowout—failed to take off, despite the backing of major automakers, because the company failed to see that there were insufficient service centers to repair these run-flat tires before going to market.

 

He goes on to highlight inspirational examples of companies taking on the difficult, but powerful concept of proactively addressing the ecosystems relevant to their categories and products:

• Apple and their iPod and then iPhone, while great products, were truly successful because of the brilliant work Jobs did in timing his innovations in line with development of the proprietary ecosystem he built around them.  This story is well worn, but a more telling example is the more recent development of the iPad and the need for Apple to ensure that content providers (outside of Jobs control) would engage and support the nascient opportunity.
• Better Place is a battery and electric vehicle charging start-up that has contemplated the importance of the ecosystem from the start.  They’ve carved out an interesting approach and unique business model for battery swapping that removes much of the upfront cost and may accelerate adoption of EV’s. 
• Digital Cinema Initiative (DCI) is an example of a consortium of movie studios coming together in a unique way to overcome the cost of adopting digital film within the theatre value chain.  In essence, they subsidized and shared the cost of capital investment in smaller theatre chains to ensure that digital film would enjoy the broad distribution and availability critical to its growth.

 

Adner does an outstanding job of making the case for innovation strategies and commercialization plans that proactively address the ecosystem and needs of the key players.  Where I do think he’s fallen short is in the tool set he’s promoting to adopt this “Wide Lens” approach.  I think there are a growing number of cases of companies building proactive networks for innovation and co-innovation and he’s only lightly touched on many of the co-innovation strategies that P&G, GSK, Pfizer and others are using to co-develop and co-commercialize innovation.

I often speak with my clients about the important role that open innovation and external connections have not only in solving innovation technical problems… but just as importantly in informing strategy with new opportunities and new capabilities.

I highly recommend The Wide Lens to anyone involved in innovation strategies, commercialization and new business development.  And to the growing group of ‘open innovation’ geeks interested in understanding the next evolution of open innovation – the development and management of innovation networks.

 

24 hours to innovate and ship

Here's an interesting mash-up of innovation challenges and motivating employees.  Atlassian, an Australian (now global) software company has a unique approach to motivating its teams and unleashing their creativity to focus on solving problems and creating new innovations.  They call it "Fedex Day" because it's about delivering any new ideas that the teams can dream up in a 24 hour period.  

According to Atlassian: "FedEx Day is a 24-hour period of innovation during which employees are encouraged to think creatively about anything that relates to their business and then deliver a solution (Dan Pink refers to this effort in this video). The point is twofold: to reinvigorate employee creativity, and to deliver tangible products or business improvements."

Now, they are expanding the effort to a contest for any company to win the opportunity for this creative effort to be focused on their needs.  Sounds like a great idea.  If you want to apply, click here.

Interview with Adrian Ott - "The 24-Hour Customer" Part 2

This is the second of a two-part post on Adrian Ott's insightful and very practical book "The 24-Hour Customer"

Innovation.net: What are some of the key insights you can share from the book? 

Adrian Ott: 

Time-Value Innovation - Altering a category through Time-Value Innovation methods can change the game and open up new markets.  Consider the following examples:

Time-slicing - Breaks a product or service into smaller time segments. Writing a blog entry took too much time, so Twitter  enabled people to microblog with 140 characters.  Or Sparked.org that created a technology platform that time-sliced volunteering by enabling busy people to provide expertise to a charitable cause in a few spare moments of time from their desktop.

Time shifting – Your favorite show is on at the wrong time, so Tivo, or Hulu lets you shift to a more convenient time. My research has found that placing customers in control of their time is profitable.

Time-Sharing – Zipcar allow you to share the use of a car without ownership so you only pay for wheels when you want them opening up new markets of urban dwellers.    We’ve also seen the rise of designer apparel clubs that enable middle-class people access to time-share designer bags for an event that would not have been possible under traditional models of ownership.

Although these are simple examples and there are many other techniques in the book, they demonstrate how Time-Value Innovation can have profound effects by reaching  new classes of consumers that may not have had the time or means to utilize the category in the past.

Companies are competing with time alternatives, not just product alternatives.  Many companies are engaging in time wars that are competing for customer time.  The old paradigms of industry analysis are less relevant to this new landscape.  Google, Apple, Facebook are all competitors even though traditional business analysis would place them in different industry groups, namely search, computing and social media, respectively.  Yet they are very much in competition because they are based on advertising  revenue models;  a minute spent on Facebook is not a minute spent on Google.  This is why they are battling for gaming share to retain customers longer on their sites. 

Habits and inertia create competitive advantage.  Psychological studies have shown that about 45% of people’s days are routine and habitual.  Stress compounds this effect.  If customers are repeatedly using a product then they will tend to stick with it until something of disruptive value comes along, or a new offering is inserted into an existing routine. Innovators need to factor this into new product or service development.

Innovation.net:  What is the Impact of these insights for mobile?

Adrian Ott: We are now in an age of instant engagement. For the first time in history, we can conform the offering to the way customers behave.  Mobile enables instant engagement through information at our fingertips. We will see many offerings not just in marketing but in location based services and sensors. Mobile health will experience significant promise from simple text messaging that reminds seniors at exactly the right time to take their medications, to more elaborate diet and exercise apps that provide information when people need it.   This will enable companies to interact in fresh ways with their customers.

Interview with Adrian Ott - "The 24-Hour Customer" Part 1

This is the first in a series of posts to share Adrian Ott's perspectives on her new book "The 24-Hour Customer".  Adrian is CEO of Exponential Edge, a consulting firm focused on strategy and customer-centric innovation.

Innovation.net: How does The 24-Hour Customer differ from previous books focused on time-based competition?

Adrian Ott: Most books on time-based competition were focused on speed-to-market and execution of the firm – they were company-centric.  The 24-Hour Customer is customer-centric because it explores how time and attention impact customer behavior and how businesses can leverage customer time and attention priorities to their advantage.

Time factors into most of our decisions these days, yet businesses tend to overlook this critical element.   Executives devote immense resources to understanding customer demographics and pricing, yet alternative uses of time and the impact of the offering on customer  time seem to never figure much into the evaluation. That’s why so many people complain that businesses tend to waste their time. Because so few businesses consider this, it’s a great way to differentiate your offering.

The book introduces a framework that defines how individuals engage with an offering based on time and attention priorities.  For example, how we can lose all track of time while searching the Internet, yet standing in line at the store seems to feel like forever.  The book helps executives to capture opportunities that arise because of ebbs and flows of time and align these priorities with their offering.

"The 24-Hour Customer"

A few months ago, I read an early release of Adrian's book "The 24-Hour Customer".  I must admit, if I hadn't been asked to review this book, it's unlikely I would have picked it up on my own.  I've seen and heard of a lot 'time based competition' books and the title struck me as yet another take on an old idea. 

Today my copy of the book is dog-eared, with dozens of pages marked for reference.  I found the book to provide some very fresh and insightful views on how both the complexity and technology of today's consumer landscape are creating challenges and opportunities for connecting with consumers in meaningful and deeper ways.

So, I asked Adrian to share her thoughts on the book and some of the ideas she presents.  She was kind enough to agree, so  I'll be posting my questions and her responses in a series of posts over the next few days.  Hope you'll check back and learn more about the book and her insights.

The Brandery -- Branding the next generation of innovators

Here's an interesting twist on the start-up accelerator concept... a branding focus.  And where else to create an incubator that infuses entrepreneurs and their start-ups with with branding and marketing thinking than.... Cincinnati.  The Brandery is the brainchild of Dave Knox, until recently a digital media expert at P&G (now CMO for Rockfish Interactive), JB Kropp, Bryan Radtke and Robert McDonald... all Cincinnati area marketing and start-up professionals.

I've signed on as one of the mentors in the Brandery and it's an interesting and exciting group of people... both the other mentors as well the enthusiastic group of entrepreneurs.  In future posts, I'll talk about a few of the companies in the mix, but in this post I'd like to address the overall concept.

Incubators are nothing new and a crowded market in themselves, but the Brandery has differentiated itself and leveraging its location (not the hotbed of innovation) as a strength.  Nobody can argue with the fact that Cincinnati truly is a center of excellence for marketing, with P&G, Kroger and the broad ecosystem of agencies and experts in the regions supporting these companies and more.  Many of the most talented marketers from these companies have set up shop locally and are serving clients globally in branding, advertising and marketing support.  So why not leverage that strength to support local entrepreneurship?

More important than the uniqueness of the concept is the importance of branding and strategic marketing thinking in the early stages of new companies.  Too often the focus is an 'inside-out' mentality of first creating a cool technology-driven product and then releasing it to the waiting masses of customers waiting to buy it.  No wonder more than 90% of these start-ups fail within the first year!

The Brandery is structured around a 12-week intensive mentoring and coaching process for the very lucky group of 5 companies that made it through the difficult screening and vetting process to be accepted.  Each are co-located for the period in a local Cincinnati warehouse district office that looks like it could be in SOHO as much as Cincinnati.  So the startup vibe is there... and on a Midwest budget.

I'm looking forward to engaging with this group and concept.  In the meantime, it's existence provides an interesting example of taking a well-worn idea and re-inventing it.  And dramatically improving the chances that these start-ups will thrive by helping them build their businesses on a strong foundation of marketing and branding.  Innovation is alive and well. 

Book Review: The Open Innovation Revolution by Stefan Lindegaard

I've read Stefan's new book The Open Innovation Revolution and found it to be an easy read, written obviously by someone who is passionate about the topic. It is a great primer for companies, and especially mid-level managers new to the open innovation trend.  Those who are looking for a deeper analysis of emerging tools (software, best practices) and approaches to overcoming some of the 'stickier' parts of OI (such as alliance mgt and intellectual property rights) may be left a bit longing.  But with that said, Stefan has focused (and I think intentionally and rightly) on the leadership and organizational aspects of OI.  He has done an excellent job of creating a handbook for the enlightened middle manager of an established company hoping to begin or expand their open innovation efforts.  I especially like his focus (Chapter 6) on the Networked Innovation Culture and the need to build a culture and mentality of networking as a core element of OI.  I also liked his treatment of identifying and Defeating the Corporate Antibodies (Chapter 8), though in this case, wished for some more and deeper actionable advice.

It's surprising to see so few books following after Henry Chesbrough's seminal Open Innovation a few years back... a lot has transpired in this area, with Open Innovation moving from a leading edge approach to a much more mainstream activity.  It's also crossing from R&D into marketing and other functions, as well as taking on a variety of new forms... from collaborative networks, crowdsourcing, consortia and many related forms of open innovation.  Stefan's book does an excellent job of addressing the opportunity available with open innovation and hopefully will find a broad business audience.  It provides practical tools and shares experience from leaders in the market, and I hope it inspires more people to undertake open innovation initiatives.  Much of his advice will help more of these initiatives succeed I'm sure.

Getting too personal?

Very intriguing articlein WSJ today "On the Web's Cutting Edge, Anonymity in Name Only".  Ths article talks about the emerging area of predictive analytics and how easily it is becoming to aggregate public information about you and make it available to marketers.

It's a fine line between intrusive marketing and personalized online experiences.  I'm especially intrigued to think about where predictive analytics will help marketers go  in enabling marketing and brand-building on mobile devices.  Lots of buzz these days about location based services, but the combination of context based information, location and predictive analytics is going to usher in an amazing new era in personalized information and experiences. 

Reinventing 'commodity' categories -- even the bowling ball

I recently was introduced to some of the underlying innovations and technologies driving advances in the bowling industry.  Ebonite based in a small town in KY here in the US is continuing to apply R&D in new ways.  Encouraging, though they don't label it as such, they are also leaders in 'open innovation' through their history and experience in bringing emerging technologies from other industries and university settings into their category.  I can't share the specifics of some of their new ideas, but here's a link to a recent television show highlighting some of their developments. 

Whenever I hear a client or industry 'expert' labeling a product as 'commoditized' I wince.  That's what they used to say about the home vacuum category until Richard Dyson came along and has launched a continuous series of innovations in that very mature and competitive market.

I believe that any business and any product can be innovated.  I wrote some time back about Dan Touhey and Spalding.  Through a series of disruptive ideas, several of which were developed via 'open innovation' partnerships, Spalding grew their business by 33% in one year!

And in particular, I'm intrigued by the nuances (from basketball and bowling, to swim suits)  of how technology is helping to drive performance and break records in sports equipment.  Like I said, you can reinvent ANY category.

Pepsico10 Innovation Challenge

I've been highlighting recently how open innovation and venture capital are (and need to be) on a path of convergence.  Here's another twist on the trend from Pepsi.  The Pepsico10 Challenge is a partnership between Pepsi, Highland Capital Partners and Mashable.  Its aim is is to identify, select and incubate 10 promising technology startups by connecting then directly with Pepsi brand teams for pilot projects. 

It's a great example of corporate open innovation moving beyond the basic blocking and tackling of technology search and embracing OI across multiple functions (marketing in this case) and a focus on relationships (by directly mentoring/coaching) and not just 'transactions'.

Philips Open Labsis another, more well known, example of this corporate/innovator collaboration happening via an incubator model.  Look for more of it.  If you're a corporate innovation leader, think about simple ways that you can structure events and interactions to collaborate face to face with innovators whom matter to your categories.