Innovation X E-Book

Adam Richardson

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 363

Veröffentlichungsjahr: 2010

Beschreibung

A fresh approach to succeeding with innovation, grounded in insights about rapidly changing customers, competitors and technologies Written by a director at the award-winning global innovation firm frog design, this vital book shows business leaders and managers how to accomplish truly effective innovation in today's disruptive climate. Richardson shows how business is filled with "X-problems"- tough new challenges that present massive innovation opportunities, but also risks. Thriving in a world of X-problems requires harnessing four specific approaches: Immersion, Convergence, Divergence, and Adaption. Combining frog design's approaches with insightful analysis of companies such as Apple, BMW, Clif Bar, Google, Maxtor, and Salesforce.com, Richardson illustrates how to envision and realize successful new business ventures, products, and services. * Provides a process for translating customer insights into relevant innovations, accompanied by case studies (many of them richly described from frog's own experiences) * For the first time, gives real guidance on connecting products, software and services into ecosystems that are actually compelling to customers * Shows how to facilitate bringing multiple perspectives to understanding a problem domain, as well as how to manage an innovation portfolio over time Innovation X is an essential guide for companies seeking to create growth and differentiation in increasingly competitive markets.

Leseprobe

Table of Contents

Title Page

Copyright Page

Epigraph

Introduction

A Quick Fly-Over

Definitions

Prologue

Chapter 1 - Living in an X-Problem World

Cranking Up the Innovation Engine

Wicked Problems

X-Problems

Chapter 2 - The Innovation X Framework

Immersion

Convergence

Divergence

Adaption

All for One, One for All

Core Insights

Chapter 3 - Immersion

Don’t Aggregate to Death

Pay Attention to Your Peripheral Vision

Multi-Vector Research

Immersion Tools

Immersion Synthesis

Chapter 4 - Convergence

Defining Convergence

Touchpoints and Ecosystems

Convergence and Sustainability

Chapter 5 - Divergence

Mapping the Domain

Toolbox-Driven Divergence

Complementary Products Divergence

Ecosystem Divergence

Chapter 6 - Adaption

The Prius as Hero

Adaption to Deal with Emergence

Flexibility

Feedback Loops

Chapter 7 - Strategy

Managing an Innovation Portfolio

Practice Wasteful Innovation

Plant Seeds, Not Forests

Experience Performance and Competitiveness

Chapter 8 - Organization

Organizing for Immersion

Organizational Implications of Convergence

Organizational Implications of Divergence

Organizational Implications of Adaption

Chapter 9 - Truths

Truth 1: Customer experience is everyone’s business

Truth 2: Not everything that counts can be counted, and not everything that can ...

Truth 3: Talent matters

Truth 4: It starts at the top

Notes

Bibliography

Acknowledgements

About the Author

Index

Copyright © 2010 by Adam Richardson. All rights reserved.

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Library of Congress Cataloging-in-Publication Data

Richardson, Adam.

Innovation X : why a company’s toughest problems are its greatest advantage / Adam Richardson.

p. cm.

Includes bibliographical references and index.

eISBN : 978-0-470-58349-4

1. Technological innovations—Economic aspects. I. Title.

HD45.R45 2010

658.4’063—dc22

2009043627

HB Printing

We choose to do these things not because they are easy, but because they are hard.

—JOHN F. KENNEDY

Introduction

A mysterious entity called dark matter takes up over half the universe. Though it has been theorized about for decades, until recently no one knew whether it existed at all. Scientists believe it is the glue that holds galaxies together, but we do not know what it is made of, where it comes from, or why it exists. Current astrophysical instruments cannot detect dark matter. The only way to identify its shadowy presence is by observing the influence it exerts on visible matter, such as how it alters the orbits of planets.

In the business world, something equally enigmatic is interfering with our ability to be consistently successful at innovation. Though hard to define, its effects are clear enough: newly released products that fail to achieve the desired goals of growth, competitive advantage, new customers, or revitalized brands, and organizations that struggle to find a focus and identity amid turbulence and ambiguity.

It is a truism now that too many innovations get stalled, squashed, sidetracked, or warped beyond recognition by byzantine organizational processes and decision-making edifices. Some companies have attempted to deal with these internal roadblocks by sequestering specialized innovation teams away in exotically decorated cubicle-free offices, or by ramping up innovation efforts with hothouses (or sandboxes, or kitchens—choose your metaphor). Many employees have been sent to seminars on thinking outside the box with the hope that they will virally infect the rest of the organization.

And yet, one recent study revealed that executives still give odds of worse than a coin-toss as to whether innovations developed with formal processes will have the desired market impact.1

Attempts so far to systematize innovation have failed, and innovation processes are often haphazard in structure and frustratingly unpredictable in their success rates. The word itself is so widely overused that it has lost its meaning. Innovation has become an end in itself, rather than the means to create a successful business, improve the lives of our customers, and make the world a better place.

Clearly, innovation is broken. But innovation is not the problem.

The problem is the problem.

By this I mean that the scope and complexity of problems that businesses must solve have changed, and we lack the tools not only to diagnose them but also to focus our innovation efforts to be more consistently successful. I call this new breed of innovation challenges X-problems, and they arise from the collision of several factors:

• Disruptive competition and blurring of industry boundaries as companies leap into each other’s spaces, diversifying beyond their core categories into realms previously reserved for partners or adjacent companies.

• More demanding customers who place a higher premium on the experiential qualities of using a product—ease of use, how it makes them feel, how it fits into their lives, what it communicates to others—that go above and beyond familiar objective criteria like performance and price.

• The need to create integrated systems of physical products, software, online experiences, and services that work as a single whole. Often these integrated systems are the keys to expansion beyond core areas, as well as to meeting customer needs in ways impossible from a more isolated offering.

What I have found from working across multiple industries and geographies is that, remarkably, almost all of them are dealing with this same combination of simultaneous challenges. It seems that everyone was caught off guard. These multifaceted problems are the dark matter of the business world—pervasive, yet hard to see except by their effects: organizational confusion and frustration, and innovation efforts that fail to meet expectations (if they make it to market at all).

While considerable attention has been given to the internal reasons why organizations fail at innovation, I believe that external factors—the dramatically increased complexity of the problems themselves—are at least as much to blame. If an organization has an optimized innovation process but a poor understanding of the problem, all it is doing is getting the wrong answer to market faster. Up to a point this is actually okay—it turns out that you have to put “wrong” stuff out into the world to understand what “right” is—but obviously no one wants to be doing this on a prolonged basis.

This calls for tools that clarify the problem and help focus innovation efforts more productively. This book aims to provide you with those tools.

The seeds of this book were laid by my work at the global innovation firm frog design, inc. Starting with its founding in 1969, frog design has had a client list that reads like a who’s-who of leading-edge companies: Apple, BBC, Disney, GE, HP, Lifescan, Microsoft, Siemens, Sky, Sony, Virgin Mobile, and Yahoo, to name a few. Over the decades, frog has expanded from a traditional design agency doing industrial design and mechanical engineering to a consultancy that does much of its work in the software realm—Web sites, software applications, mobile device interfaces—in addition to physical product design, plus systemic integration of all these elements into single offerings. Chances are very good that you have a frog-designed product in your home or workplace.

The book describes a variety of detailed case studies based on frog’s work, in addition to non-frog examples that touch on a range of industry areas. Alongside these “from the trenches” case studies I discuss tools and methods that were developed out of them. Because every company and industry is different, these tools and methods will be more applicable and customizable than is often easily done with highly specific case studies. The book does cover a lot of territory, which is a necessity due to the complex nature of X-problems that involve multiple interrelated challenges. It is impossible for a single book to cover all the issues exhaustively, but a key message of the book is that awareness of the interconnectedness of the issues is at least as important as focusing on any of them individually.

Cross-fertilization of knowledge across disciplines and industries is a core value at frog. What lessons can be taken from work in the wireless communications industry, for example, into the automotive realm? Or for that matter, what about the reverse? To that end, frog is unusual among major consultancies in that it is not divided up by industry verticals—consumer electronics, packaged goods, telecommunications, and the like. This has given me a chance to work across many industries, shifting from looking at the future of toothpaste one day to rethinking mission control for NASA on another.

frog is also unusual for design-centric firms in the breadth of its global footprint, the diversity of nationalities of its staff, and the attention it pays to sharing cultural insights across offices and continents. The company was started in Germany’s Black Forest by Hartmut Esslinger, an icon in the industrial design world. Since then it has branched out to eight offices worldwide, which has given me the opportunity to see the perspectives and challenges of companies from many regions.

Beyond the conventional design disciplines, frog has developed deep technical capabilities, allowing it to take software, in particular, all the way through to shipping products. It has also developed a robust strategy capability that identifies new market opportunities, defines business cases, and creates strategies for products and brands, in collaboration with the user researchers, designers, and technologists conceptualizing and designing the offerings themselves.

Much of my time at frog has been as director of product strategy, focusing on these strategic issues and sitting down with executives and product managers whose fundamental question is, “What should we make?” But often they do not even know exactly what the problem is they are trying to solve. They know something has gone wrong, or have an inkling of opportunities ahead, but are unclear how to properly define them, or how to respond. Forty years ago, frog was primarily in the business of aesthetic design—putting an attractive and user-friendly shell around an existing product. Today, the challenges presented by clients are infinitely more abstract, knotty, and high-stakes, getting to the heart of the vision and even existence of their organizations.

Why have companies started to turn to frog for answers to these complex problems? A design firm is maybe not the obvious choice compared to, say, a management consultancy. I see two main reasons. First, it comes from a growing realization that one cannot fully separate strategizing about new offerings from actually conceptualizing and designing them. Our unusual combination of research and strategy with product design and development gives us an ability to not just map possible opportunities but make them tangible with prototypes and shipping products.

Second, frog’s consistent focus on understanding end customers’ needs, behaviors, and perceptions provides a perspective that complements—and sometimes challenges—the internally generated market, financial, and technical factors that tend to dominate at corporations.

The shift in problem scope from design to strategy that frog has undergone mirrors my own career evolution. I started out as a traditional industrial designer, working at Sun Microsystems in Silicon Valley and creating the look and usability of its high-end server systems. I was fortunate to be involved in early-stage visits with customers to understand their needs for future products, and as the products progressed I helped run tests to see if users could operate the servers easily. This sparked an interest in incorporating the perspectives of end users into the design process. I investigated this further with a multidisciplinary master’s degree at the University of Chicago that blended anthropology, sociology, and cultural theory, looking for ways to integrate tools from these disciplines into the design process. Today this approach is quite common and academic programs exist to support it, but in 1995 I was considered unusual.

This experience allowed me to unify design and understanding of user needs. But, like a mountaineer cresting one peak only to discover another, previously hidden, I realized that it was essential to integrate thinking around competitive, market, and product strategy into the process as well. So the last decade of my career has been focused on finding ways to combine tools and approaches that deliver the analysis needed from a business point of view without stifling the creative energies that are so vital to innovation. Today as a creative director at frog I work across the whole breadth of the product development process, and continue to seek ways to integrate inspiration with analysis and vision with pragmatism in order to bring exciting, worthwhile, and valuable innovations to market.

A Quick Fly-Over

In the Prologue, I describe how Hewlett-Packard grew from a simple oscilloscope maker to a $100 billion computer and consumer electronics giant. HP is an extreme case, but the complex issues it has dealt with—moving into new domains, integrating systems, innovating to meet customer needs, and facing unexpected competition—are typical of the problems that many businesses face today.

Chapter One describes the particular challenges of X-problems, and the way conditions in the business environment have contributed to their development.

Chapter Two introduces the Innovation X framework, a set of methods for diagnosing an X-problem and focusing innovation efforts more effectively. The four methods are immersion, convergence, divergence, and adaption, each of which is described in detail in the next four chapters.

Immersion is about soaking yourself in all the relevant factors of the X-problem: customer needs, yes, but also competitors, companies elsewhere in your ecosystem, issues of brand and organizational legacy and capabilities, understanding of technologies and trends, and so on. Chapter Three discusses ways to research each of these and, more important, connect the dots in unexpected ways to arrive at fresh insights to guide innovation. Immersion serves as the foundation for the other three methods.

Convergence deals with the need to create integrated offerings that meet customer needs in new ways, and allow stronger, more lasting relationships with customers. The term convergence, like innovation, is overused. Confusion often arises when convergence is applied to two related but distinct imperatives: ecosystems that integrate hardware, software, and services together, and the integration of so-called touchpoints that customers have with companies over the course of their relationship, from purchase to usage. Chapter Four lays out a clear structure that distinguishes between these concepts, and allows for precise analysis of opportunities to meet unmet needs for demanding customers and ways to outpace the competition.

Like HP, many companies are expanding into unfamiliar territories as their core businesses falter. In Chapter Five, I discuss ways in which this can happen most effectively with product innovation, using internal capabilities, expanding the reach of what you make, and working with others to deliver systems that are still convergent and address customers’ needs.

Chapter Six is about how to use the four Innovation X methods, both before launching a new product and after, to track and adjust to your emerging understanding of a complex problem. Since no one can analyze X-problems sufficiently up front, understanding them is a long-term effort. You also want to track the periphery of your business constantly to spot new opportunities and threats alike.

Complex problems and the Innovation X framework raise some strategic challenges, which I address in Chapter Seven. These range from managing an innovation portfolio to planning product platforms in dynamic environments, and going beyond the common concept of rapid prototyping to what I call rapid systeming.

Chapter Eight is about the effects of Innovation X in organizations, as working through complex problems can create challenges in regard to knowledge sharing, collaboration, breaking down silos, focusing priorities, and keeping your organization constantly on the lookout for new opportunities and threats.

Throughout the book I use a variety of real-world examples, some well known and others less so. Some are based on work that I and my colleagues have done with clients at frog design. It is always precarious in a book such as this to use contemporary examples from fast-moving industries, as inevitably they will become somewhat dated and perhaps even quaint sounding. I’ve tried to select ones that will hold up over time, even if the industries from which they are drawn change significantly in the future.

The focus of the examples is more on consumer products and services than industrial or B2B, and the examples are biased toward technology offerings, largely because it is this area that reveals the cutting edge of the problem complexity that Innovation X is designed to tackle. But the lessons from these should still extrapolate well beyond the bounds of the specific examples.

Definitions

A number of the terms used throughout the book are often cause for confusion. Here are some precise definitions.

Product

I use the word product in an encompassing way, instead of making distinctions among physical products, software products, online experiences, and service experiences; they have become so intertwined that—from a customer’s point of view, which is what is most important—they are the same. For example, TiVo’s product consists of a set-top box, a remote control, an on-screen interface, a subscription service, and a Web site. A TiVo customer does not make meaningful distinctions among these elements. I will make the distinctions among the categories, and point out the differences, only where necessary.

Customer

Customer refers generically to people who buy and use products. A customer in this sense may be an individual person or a whole organization. Sometimes people buy for others and are not themselves the product’s primary users, for example, purchasing departments in companies, or parents buying for children; in such cases I may specify consumer, user, or end customer.

Innovation

As noted earlier, the term innovation gets used (and abused) in a lot of different ways, so it is useful to put some boundaries around the kinds of innovation discussed in this book.

Geoffrey Moore describes a broad swath of innovation types in his book Dealing with Darwin that makes a useful starting point:2

• Disruptive innovation

• Application innovation

• Product innovation

• Platform innovation

• Value engineering innovation

• Organic innovation

• Integration innovation

• Line extension innovation

• Enhancement innovation

• Process innovation

• Marketing innovation

• Experiential innovation

• Acquisition innovation

This list combines degrees of innovation (disruptive versus line extension, for example), with business areas (product versus process), sources of innovation (organically developed internally versus acquired from outside), and a number of other innovation categories. The difficulty with this is that they are not mutually exclusive—a product innovation can go along with an acquisition innovation and marketing innovation, for example. This can lead to a lot of talking at cross-purposes. 3

FIGURE I.1 Innovation Scope.

To this list we could also add innovation efforts in technology R&D (as a precursor to product development for going to market), and sales and distribution innovations. The latter Moore lumps under process innovation, but they are rich enough in themselves that they deserve their own category.

Bringing these together and doing some synthesizing and sorting, Figure I.1 shows the territory of innovation that is the primary topic here. On the vertical axis is degree of innovation from incremental to radical.4 On the horizontal axis are various areas of innovation. These are crudely grouped, but I’m not suggesting a particular order of priority.

The focus here lies broadly in the realm of product development. The upper end of the degree-of-innovation axis is where the most complex and vexing problems occur. To define the areas in a bit more detail:

Application and positioning innovation: Finding a new market for an existing product or technology, or creating a new value proposition aimed at as-yet unconvinced customers.

Platform innovation: A platform establishes an integration layer that simplifies underlying complexity, enabling new products to be built more easily on top of it by third parties. For example, Amazon and Facebook have created platforms by establishing standards that allow other companies to create software that interfaces with their databases, opening up possibilities for innovation that Amazon or Facebook might not have thought about themselves. Today, platforms and products often have to be considered simultaneously as platforms are key to long-term growth in a systemically connected world.

Product innovation: This is the core of creating new offerings and bringing them to market. As noted, I am using the word product very broadly to cover physical, software, and service offerings, or combinations of these. The focus is on new-to-world and major line-extensions, rather than incremental improvements to existing products, because the kinds of problems under consideration here cannot be solved by simply improving the products you already have and selling them to existing customers.

Experiential innovation: For Moore, who comes at things from a Silicon Valley tech perspective, this means improving the usage experience rather than changing the utility of the product itself. He sees it as purely relevant to services, not physical or digital products, and as something to pay attention to as a last resort—so-called luxuries like customer service that are layered on top of the base offering. But the line between utility and experience is often fuzzy, and the quality of experiences is not something that can be treated as an afterthought or confined just to narrowly defined services.

Prologue

Hewlett-Packard, the storied Silicon Valley firm founded by William Hewlett and David Packard, started life as a manufacturer of oscilloscopes—lab instruments for measuring electrical signals. If you visit HP’s headquarters in Palo Alto you can see a museum of those seminal products, including that very first oscilloscope. In another building you can visit Bill and Dave’s offices, located one next to the other, preserved just as they left them after they retired, replete with sixties-era Naugahyde chairs and desk blotters. Venturing a bit further afield, you can also see the garage they rented on Addison Avenue to start their business, which has since been preserved as a historical landmark.