Innovation Or Renovation Opportunities Require a Value Proposition

The goal of every innovation or product renovation is to create and deliver value to the customer or user (internal or external customers!) that is clearly greater than the users’ alternatives. The difference must be compelling to the users.

But how do you start to develop new value for the customer?

Begin with the value proposition. It is the nucleus for value creation, because it addresses the four fundamental questions that must always be answered when you start to create new customer value.

• What is the customer and market Need?

• What is my Approach for addressing this need?

• What are the specific Benefits that result from this approach (also in quantitative terms)?

• How are these Benefits superior to the Competitive alternatives?

Value propositions are difficult to develop because initially, you don’t always know enough about any of these questions. One tends to focus on the ‘approach’, to the exclusion of the other questions. Jam sessions that provide feedback from a disparate audience help you improve and make your value proposition compelling.

For different situations you might need a different value proposition, depending who you present it to. The metrics for the users are benefits and how those benefits compare with those of the competition. The metrics for an investor, which can be a senior manager of your company, a business unit manager or a venture capitalist, might include market size, profit revenue growth and return on investment.

In his book The Art of The Start venture capitalist and author Guy Kawasaki gives good advise on how to approach the sponsor. Guy draws upon his background as an envangelist for Apple Computer, Inc.

Watch his speech here. Download the Powerpoint slides that Guy was using during his ‘The Art of The Start’ speech.

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You Have To Let Innovation Flow In and Out

Through an initiative called “Connect and Develop,” Procter & Gamble’s CEO has mandated that 50 percent of the company’s innovation come from outside the enterprise. Robert Scott, P&G’s vice president of innovation and architecture, Global Business Services, is charged with realizing this goal in IT.

“You’re going to have to let innovation flow in and out of the walls of your organization and in and out of your company,” Scott says. Therefore, he built connections to the labs of P&G alliance partners like IBM, SAP and Hewlett-Packard and conducts regular “discovery journeys” to Silicon Valley. For the “develop” part of the mandate, Scott and the rest of P&G employ “SIMPL” (Simplified Initiative Management and Product Launch), which shepherds concepts toward execution. This process is broken into six phases: Discovery, the search for opportunities and ideas; Design, where concepts turn into prototypes; Qualify, where ideas are validated; Ready, preparing for launch; Launch; and Leverage, a step Scott added to market and maximize adoption of IT solutions. [Get the full Story ¦ CIO]

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Market Research Is The Worst Way To Learn What Customers Want

“Market research is the worst way to learn what customers want,” says Roger Schank, the former head of Yale’s computer science department in a CNBC five-part Business of Innovation series hosted by Maria Bartiromo. “Surveys can’t determine the real demand for products or services that don’t yet exist”, he states.

“Observation is everything”, claims Schank.

If you want to know what customers really deeply want you need to watch them. Watch people’s behavior. Watch what they do in real life.

A central aspect of innovation is that listening to your best customers will never allow your organization to create game-changing innovations.

In many conversations with European executives I am regularly asked to provide examples about results of our customer observations. Given the sensitivity of the business – we typically work under non-disclosure agreements – I am generally unable to disclose detailed information about any project.

Maria Bartiromo’s Business of Innovation episode New Tricks and Old Dogs provides some great examples about how ethnographic research results were turned into practical solutions. Maria’s guests in this program are Meg Whitman, President of ebay, Vikram Akula, CEO of SKS Microfinance, a business helping Indian women break the shakles of poverty by loaning them small amounts of money to start their own business, Dick Posey, CEO of Moen Incorporated, a leading manufacturer of fashion plumbing products, and Roger Schank. [Get the full Episode ¦ CNBC]

Transcript of CNBC The Business of Innovation, Episode #3

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Ethnographic Praxis in Industry Conference, EPIC 2007, to be held in Keystone, Colorado/USA

EPIC2007, the third international Ethnographic Praxis in Industry Conference is held in Keystone, Co. USA, October 3-6.

EPIC is the premier international forum bringing together artists, computer scientists, designers, social scientists, marketers, academics and advertisers to discuss recent developments and future advances around ethnographic praxis in industry.

The organizers change the tone of the venue this year – away from the scuttle and bustle of a corporate campus (Intel) to the grandeur of the Rocky Mountains, Colorado. The primary conference program venue is the Keystone Conference Center which is nestled against the forest.

EPIC2007 is all about “Being Heard”. From privileged teenagers to vast populations of oppressed peoples, the last decade has seen a tremendous growth in the promise, and often actuality, of the ability to give voice to oneself, one’s people, one’s issues and one’s ideas. “You” may be Time’s Person of the Year, the “long tail” may be wagging the “You Tube”, “My Space” may be more your space. This year’s theme explores what it means to have voice, to represent, to be represented, to express, to be heard. It explores the ways this happens and what happens when it doesn’t. It also asks after the absence of voice and representation, and all the grey space in between.

Last year’s theme was Transitions, addressing the shifting landscapes of the world at macro and micro levels – global and societal shifts to changes in people’s daily lives. 14 workshops provided hands-on and interactive experiences around key topics in ethnography today.

EPIC2006 Conference Proceeds (pdf 285 pages)

EPIC2006 Slide Show (flickr)

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