A Sunday stroll around innovation and customers and voices

I came across an interesting blog discussing the differences between innovation and invention recently. The relationship between businesses and their customers was also conveyed in an interesting discussion. Check this out...

A Sunday stroll around innovation and customers and voices

November 23rd, 2008 · 5 Comments · Four pillars

Following on from my posts about faster horses, it may appear that I’ve been doing a lot of reading on the subject. Don’t believe it. It’s fairer to say that everywhere I went, the subject being debated seems to be at least tangentially connected to that of “the voice of the customer in innovation”.

Maybe it’s a variant of the “when you’re a hammer, everything looks like a nail” syndrome. For example, when we first decided to have children and started trying for one, I remember my wife being able to spot a pregnant woman at a hundred paces in the dark; somehow, she was sensitised to noticing pregnant women, ostensibly because she wanted to be one.

But that’s as may be. On to the subject at hand. Everywhere I looked, I could interpret the discussions as related to this issue of the role of the customer in innovation.

First, let us remind ourselves of Michael Schrage’s oft-quoted saying:

Innovation isn’t what innovators do.... it’s what customers and clients adopt.

Innovation takes place when the customer adopts something, not earlier. Invention by itself is relatively valueless .... until and unless someone comes along with a business model that allows people to consume the invention simply and efficiently. That is one of the reasons that Silicon Valley is as successful as it is in fostering and realising true innovation. Silicon Valley is not just about PhDs and MBAs and garages, it is about an ecosystem. An ecosystem of universities and students and angels and venture firms and early adopter customers, even realtors and similar service providers, working closely together to develop virtuous circles of innovation, creating and adapting the business models needed to make inventions valuable. Otherwise it would be a case of “Suppose they gave an invention, and nobody came?”

Why is this important? Today, while reading the latest Economist, I came across this intriguing article: Innovation in America — A gathering storm? [Thank you, Economist, for not putting the article behind a paywall!] The article quotes Amar Bhide, the Lawrence D Glaubinger Professor of Business at Columbia University on some very interesting ideas. In summary, Bhide postulates that it does not matter where the idea or invention takes place, what matters is where the business model innovation takes place. My words, not his. Do read the entire article yourself, don’t rely on my uncharacteristically brief precis.

The Economist article goes on to say “Edison did not invent the light bulb and Ford did not think up the motor car, but both came up with the business model innovations required to profit from those marvels”.

Invention often needs wild-eyed zealots; innovation needs changes to business models, sometimes subtle, sometimes radical. Take Amazon for example. What differentiated Amazon from everyone else to begin with? Their ability to ship one book to one customer at one home address, while their competition was busy with words like “reorder levels” and “inventory” and “distribution hub”. Business model innovation. As was 1-Click. As was Amazon Reviews. Not invention.

I would contend that innovation is often about business models, and that innovation often cannot take place without the voice of the customer. Invention yes, innovation no.

Moving on. Earlier today, I spent some time catching up on my reading: it was raining in Bangalore, so the time I’d reserved for watching the cricket could be put to other uses. One of the articles I read was this one: People are from Earth, Machines are from Outer Space. Written by usability guru Don Norman, the article looks at the way we are being ‘enslaved’ by machines, and the need to do something about it. Over the last four decades we’ve seen significant improvements in human productivity as a result of the effects of the Laws of Moore, Metcalfe and Gilder. What we haven’t seen is a similar shift in human longevity; as a result, simplicity and convenience (of inventions) are becoming more and more sought-after virtues.

I would contend that in order for an invention to become simpler and more convenient to use, the voice of the customer becomes an imperative. After all, she’s the one who’s going to use the invention, she’s the one who does the adopting.

A day earlier, catching up on my tweets, I came across this one from Michael Krigsman, quoting the CEO of SAP. “It’s arrogant to dictate to customers. Better to ask them and respond to what they need.” Now that’s not rocket science or even unusual per se. What makes it worth remarking on is who’s doing the saying and where he’s doing it. SAP are the post-industrial (but still pre-information) society equivalent of Ford and “any colour you like so long as it’s black”. Why do I say that? Because SAP has come from a background pof manufacturing processes, not service processes, and the information needs are therefore expressed in the words of a past paradigm. Nevertheless, even SAP is talking about asking customers what they need.

Conversations with customers have to be dialogues, not monologues, as the Cluetrain guys reminded us. And this requires us to do some shifting. What do I mean? Take this for example:

I enjoy travelling, and I’ve been blessed to be in an occupation where travelling is part of the job. Whenever I travel, I spend time observing people, and many things delight me, many things serve to educate me, and some things never fail to amuse me. An example: where an English-speaking person is under the misapprehension that the person he is speaking to will suddenly understand everything just because he speaks English slowly and loudly to that person.

For a conversation to flourish, two things are necessary. A common language and a context in which to place the conversation. Which means it is time I meandered into Alpine territory and spent some time there with Hugh MacLeod. Hugh has been in fine form at gapingvoid, particularly with these two posts: Marketing evolves when language evolves and Marketing as Transformation.

If you’re not listening to the customer’s voice, then she might as well be speaking in a Finno-Ugric language for all you care. And, in the context of what Hugh is saying, you have absolutely no chance of even spotting the narrative gaps your customers would like you to fill. [An aside: Is Hugh MacLeod the only person in the world to live somewhere where the population is lower than the size of his Twitter following?]

Sometime earlier this week, I had occasion to be at MIT, meeting with Tom Malone at CCI, which shares a floor with CISR. Which is where I bumped into George Westerman and spent some time discussing the subject with him. His definition of innovation really works for me:

Adopting or modifying a product, service or process in a way that creates value and is relatively new to the industry.

In our dialogue, George stressed the importance of regular and informal conversations between the designer and the customer during the process of innovation; the engineer wants to solve problems, to remove defects and inefficiencies from the current way of doing things; the customer wants her experience to be better, but only she can describe what she wants improved. She knows it when she sees it; [incidentally, my reference to the phrase has more to do with John Guaspari’s book on quality than with the “threshold of obscenity” usage quoted in Wikipedia.

Finally, as I remarked in an earlier post, when I was having dinner with MR Rangaswami (no relation) in San Francisco later that week, he reminded me of what Peter Drucker had said, about listening to the customers you don’t have, not just the customers you have.

So where is all this leading? Much of the time, when we use the word “innovation”, we mean “invention”. This may have been fine in the past, but it’s not sustainable any more. Invention is about making new things, innovation is about doing things in new ways. For invention to have value, there must be innovation in business model and in process. Innovation in business model and process requires us to understand the language and context of the customer. This is patently hard to do without listening to the customer during the process of innovation.

To make matters “worse”, things have moved on. Customers now want to make these changes themselves, to become partners in the innovation process, to co-create value. More and more, they have the tools to be able to do this; when they are denied the tools, they react with force and power.

As I stated recently, it took IBM 40 years to “become evil”; it took Microsoft only 20 years to follow suit; Google gained that epithet in 10; Facebook raced to it in 5. As Umair Haque noted, the cost of “being evil” is fast outweighing the benefits.

Time we listened.

Vist the blog here: http://confusedofcalcutta.com/2008/11/23/a-sunday-stroll-around-innovation-and-customers-and-voices/

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