You Don’t Hear Your Customers

The other day, I asked my business manager to follow up with a client about an unpaid invoice.  She contacted the company’s accounts payable department and was told that the invoice was paid on June 1st, 2012. (italics added for emphasis)

OK, I have some pretty talented clients, but I don’t think any have mastered time travel…yet.  It is only the first week in January.  There is no way they could have paid (past tense) an invoice 6 months in the future.

So obviously my client miscommunicated.  Or did they?

What my client actually wrote was that the “invoice was paid 6/1/12.”  To my American business manager, this was clearly June 1st.  But to my European colleagues, they would interpret this as January 6th.  In the US, our date format is mm/dd/yy; in Europe it is dd/mm/yy.

Although this is a very simplistic example, it clearly demonstrates how biases – cultural, language, experience, etc – significantly impact how we perceive the world around us.  And most people are unaware of the fact that they do not truly see things to same way as they occur to others.

In the world of innovation, this can have an impact on how we understand customer needs.

We think we know what they want.  But what they are saying is always interpreted differently than what they really mean.

I like the story told by Professor Chris Parker of the University of Lucerne about a tribesman from a remote part of Malaysia who was taken to Singapore for the weekend as part of an anthropological study. It was his first exposure to the outside world. After a tour of the bustling city, his guides asked him what had struck him most about this place, one of the great high-tech centers of the world. The tribesman said without hesitation that the biggest surprise was a wheelbarrow that he had noticed being used to haul a large quantity of bananas, more bananas being hauled by one conveyance than he had ever seen before.

All the computers and all the mobile phones on the technology-mad island meant nothing to him. He was most impressed by nothing more sophisticated than the big wheelbarrow because in his world, what mattered still focus on basic gathering and distribution of food and water. The digital world has yet to have any bearing on their lives. The technology of choice for this tribe would be a consignment of new wheelbarrows. Of course, in the context of business, technology is more sophisticated than the wheelbarrow, but no more important to its success.

How you see the world is different than how others will see it.

It reminds me of a scene from the movie, “The Gods Must Be Crazy.”  A Coke bottle is interpreted many different ways by those unfamiliar with glass.  To most of the world, it is obviously a Coke bottle.  But if you have not seen one before, it means something entirely different.

Assume you don’t understand what your customers really want.  Poke.  Probe.  Ask clarifying questions. Have them tell you stories that help elaborate.  Ask “why” they want a particular feature.  Look for alternative perspectives and meanings.

Maybe your customers really only want a bigger wheelbarrow.

P.S. This technique applies to family members and friends.  Don’t assume you know what your spouse or kids are saying.  Odds are, you are not really understanding them.

Are You Asking the Right Question?

For many years, I was a loyal BlackBerry fan.  More accurately I was a CrackBerry addict.

A year ago a got a MacBook Pro and six month layer I acquired an iPad.  It felt like I should switch to the iPhone.  But I was not ready for two reasons:

1. I wanted a Verizon phone that could work globally, and the iPhone 4 was North America only.
2. I was wildly concerned about my ability to type on a virtual keyboard.  Previous attempts were disastrous.

When the 4S came out, it addressed my first concern.  But it did not, from my perspective, address the keyboard issue.  Or so I thought.

I was asking for the wrong feature.  Instead of asking for a better keyboard, I should have looked for a better data entry method.

I bought the 4S the day it hit the market.  I turned off Siri, Apple’s voice recognition system, because I did not think it would be valuable.  Man, was I ever wrong!  On a whim, I tried it one day.  And now I dictate many of my emails and text messages through voice recognition.  The accuracy is amazing.  And my speed has been increased significantly.

I also marvel at the fact that I can gain access to so much information without ever going into Google. Will these types of devices be game changers, bypassing the search engine’s revenue generating ads?  I’m not sure; time will tell their full impact.

But for me, it is a game changer.  In one sitting, I dictated four articles; something that I had never been able to do previously.  I realize that there are other voice transcription services (manual and automatic) out there.  However, the convenience of having it built into my phone made it so accessible I could write anytime I was inspired.

When you are innovating, are you striving to make a better keyboard?  Or are you focused on creating a better data entry method?

Asking the right question will lead you down an entirely different path.

Ideas, Ideas Everywhere…

There’s an old tale that goes…

Water, water, every where, Nor any drop to drink.

Inside of organizations, there’s a corollary…

Ideas, ideas every where, Nor any one can think.

Um, ok, I should stick to my day job.  But the point is, organizations are drowning in a sea of ideas, yet they never take the time to think about what matters most.

The other day I was at an event run by a non-profit.  They have built up a large network of advocates who support the cause.  As I am a good friend with the woman who runs this group, I spent a fair amount of time with her that evening.  As the hours passed, many people gave her their thoughts on how to run the organization.  ”Do more of this…”  ”Do less of that…” “Call your group this….” “Engage these organizations…” “Copy what this non-profit is doing…”

The ideas were all over the map.

I could tell that the organization’s leader was a bit frustrated and confused as there were so many suggestions.

She turned to me and asked what I thought she should do.

Of course, like everyone else, I had my opinion.

I told her, “Stop listening to people’s suggestions.”  I then joking said, “And you should ignore my suggestion too.” (Someone once said to me, “Isn’t telling people that they should not use best practices a best practice?” Hmmm….)

Within any organization, there is never a shortage of ideas.  There is a shortage of good ideas that actually matter and ultimately create real value.

My recommendation to her was:

1. Stop listening to suggestions (and don’t solicit them either).  Everyone wants to give you their two cents…and that’s all their ideas are worth.
2. Get clear on your strategy.  There has been too much focus on day-to-day activities that the business model has not been clearly articulated.  There has been an over-focus on tactics rather than outcomes.
3. Stop copying the best practices of other, similar non-profits; study for-profit organizations.  This will provide new insights.  And it will have you less reliant on sponsorship/donations and will force you to develop a real value proposition.
4. Based on the strategy, identify a series of challenges/opportunities (“How might we…?”).  The strategy defines “what” you want to achieve (outcomes) and “why” (purpose).  The challenges deconstruct the strategy into questions, that when solved, provide the “how”.
5. Ask your network (through email or better yet a private discussion board) for “solutions” to these challenge/opportunities.  Encourage collaboration.
6. Find people who are passionate about moving these opportunities forward and put them in charge of implementation.

A critical issue with so many organizations (especially smaller businesses and non-profits) is that there are so many opportunities and so little focus.  The ideas/needs of the day tend to overshadow the overall strategy.

Get clear on how you make money, how you differentiate yourself, and then define a series of challenges that will help make that strategy a reality.  Focusing on what matters most will accelerate your innovation efforts and reduce your investment.

Happy Holidays.

The Invention of the Mouse

Malcolm Gladwell has an excellent piece on how Apple created its first computer after visiting Xerox parc.  In particular, he discusses how the mouse was developed.

After Jobs returned from parc, he met with a man named Dean Hovey, who was one of the founders of the industrial-design firm that would become known as ideo. “Jobs went to Xerox parc on a Wednesday or a Thursday, and I saw him on the Friday afternoon,” Hovey recalled. “I had a series of ideas that I wanted to bounce off him, and I barely got two words out of my mouth when he said, ‘No, no, no, you’ve got to do a mouse.’ I was, like, ‘What’s a mouse?’ I didn’t have a clue. So he explains it, and he says, ‘You know, [the Xerox mouse] is a mouse that cost three hundred dollars to build and it breaks within two weeks. Here’s your design spec: Our mouse needs to be manufacturable for less than fifteen bucks. It needs to not fail for a couple of years, and I want to be able to use it on Formica and my bluejeans.’ From that meeting, I went to Walgreens, which is still there, at the corner of Grant and El Camino in Mountain View, and I wandered around and bought all the underarm deodorants that I could find, because they had that ball in them. I bought a butter dish. That was the beginnings of the mouse.”

This is a simple, yet powerful example of how a well-defined challenge can transform an industry.  What challenge can you frame that will help you redefine your industry?

Three Innovation Distinctions (part 1): Challenges not Ideas

Last week I was with a group of extremely successful entrepreneurs in Las Vegas. I was a bit of an outlier as my background is mainly with large, multi-billion dollar businesses. Everyone else in the room came from the start-up world. Also, nearly everyone in the room worked exclusively with speakers and authors. Although I too am a speaker and an author, it was clear that my perspectives were a bit different than everyone else in the room. Or as one entrepreneur said, “Steve, you have distinctions in innovation that we don’t.”

So they asked me to share my point of view. What I shared were three simple distinctions on innovation.

1. Challenges not Ideas
2. Process not Events
3. Diversity not Homogeneity

In today’s blog entry I will focus on the first point. Subsequent blog entries will address the last two points.

CHALLENGES, NOT IDEAS

Signal-to-Noise Ratio
One of the most important, yet under-considered measure in the innovation process is the signal-to-noise ratio. The signal-to-noise ratio is the ratio of a signal power to the noise power corrupting the signal. In layman’s terms, it is the ratio between what you want and what you don’t want. For example, in audio recordings, it is the ratio between the music and the background noise.

Organizations do not have a shortage of ideas. They have a shortage of good ideas that matter.

In innovation, the signal is comprised of the good ideas. The useful ideas. The ideas that can and will ultimately be implemented in such a way that they create value. The noise is made up of all of the other ideas. Useless suggestions. Solutions to problems that don’t matter. Ideas that will never come to fruition.

To increase innovation’s your signal to noise ratio the first thing you want to do is stop asking for ideas.

Drowning in Ideas

Suggestion boxes are cluttered with noise. The amount of time required to sift through the chaff to get to the wheat is huge. And even when you do find a good solution, the amount of effort required to rally to troops to implement the problem is huge.

The innovation team of a large retail bank implemented a major suggestion box program. They received thousands of ideas. Evaluators looked at every idea.  In the end, none were implemented. In the aftermath of their efforts, they asked me for my observations.  In hindsight, the submitted ideas could have been categorized into 3 groups:

1. Duds: A large percentage of the ideas were clearly not worth pursuing. These ideas were not new, or were unlikely to show a positive ROI.  However, even with these, there might have been a nugget of usefulness that was missed.  However the energy to nurture these nuggets was probably not worth it.
2. False Negatives: There were, from my perspective, many ideas that were indeed good. But for whatever reason, the evaluators dismissed them.  Part of it had to do with biases of the evaluators.  Sometimes it was due to a lack of knowledge on the part of the evaluators.  And often, it was because the ideas were not fleshed out enough making it difficult for them to be properly judged.
3. Good, But No Home: This was the most disconcerting category.   These were ideas that were good ideas that the evaluators liked, but sadly they had no organizational home. As a result, the ideas withered on the vine and were never implemented.  They never got the resources or funding necessary to move them to the next level.

The company’s innovation program lasted a total of 18 months.  It was shut down and deemed a huge failure.

I have seen similar results in other organizations. One large company I know has a competition each year where employees submit new product ideas. The winner gets a large check and the company implements the best idea. I asked the person responsible for this program if it was viewed as a success. The answer was, “It was a PR success but a commercial failure.” The competition generated buzz in the media, but none of the products have yet to generate a positive ROI. Contrast this with their more focused efforts on creating or improving specific product lines. In nearly every case, these were commercial successes. Their idea-based programs did not generate good bottom-line results, while their challenge-based initiatives did.

The other issue with ideas is that there is no level of accountability. Because people tend to develop ideas on their own time, there are no time tracking methods that can keep tabs on how much energy is invested in idea generation. If you encourage ideas, I suspect that you are spending a lot more money on those initiatives than you could ever imagine. You might be able to measure the ROI of a winning idea. But I doubt you can determine the ROI of your overall ideas-based program. There is no way to know how much time was spent on the thousands of duds that never see the light of day.

The Power of Challenges

Contrast this with challenges. With challenges you assign owners, resources, evaluators, evaluation criteria, and funding up front. We know that the solution to a challenge will be relevant to the needs of the organization, so if a solution is found we know it will be valuable. Also, because of the nature of challenges, we have better tools to evaluate the amount of time spent on finding solutions. We can truly measure the ROI of each challenge and the overall challenge-based program.

Some of you may see a loophole in my logic. You might think, “Ok Steve, why not just post a challenge that asks for new ideas. This would seem to be a challenge-based approach. But of course all you are getting back are ideas.” This is true. And this is why it is important to discuss the construction of challenges.

The Goldilocks Principle

Good challenges must adhere to the Goldilocks Principle. That is they can’t be too big (broad, novel, abstract – e.g., asking for new ideas) or too small (overly specific). They must be “just right.” As Dwayne Spradlin said in his InnoCentive blog entry on the topic:

For example, the big problem is not the need for a new drug for a neglected disease, it is the elimination and/or minimization of the human suffering caused by the disease. The right questions might include: How do we limit transmission? How can we cost effectively produce treatments that comprehend market based economics to ensure a sustainable model? How do we distribute treatments in the developing world? Even these questions require further decomposition until we get to well formulated challenges (e.g., Can we get 5X more vaccine into the hands of those that need it in the context of real world economic, cultural, and political constraints in Sub-Saharan Africa?).

The key is good challenges. The right challenges.

A lot more could be said on this topic. But I will close with a quote from Albert Einstein, who in 1938 said, “The mere formulation of a problem is far more often essential than its solution, which may be merely a matter of mathematical or experimental skill. To raise new questions, new possibilities, to regard old problems from a new angle requires creative imagination and marks real advances in science.”

I couldn’t have said it better myself.

[for your convenience, all three articles have been packaged into one pdf file]