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The most important innovation technique available to an innovation practitioner

ethnography

“I didn’t realize how hard it was to run a small business.”

That’s what Groupon CEO Andrew Mason had to say about his recent experience in studying the needs of his next customer base, which is the starting point of Groupon’s next strategic direction.

From Businessweek:

There’s an excellent Japanese restaurant in Chicago’s Wicker Park neighborhood. The place has been around for years and still draws a crowd, a trendy mix of tattooed hipsters and business-casual professionals. Black-clad waiters with spiky hair shuttle plates of sashimi, which is pricey but worth it, judging from the reviews on Yelp. On weekend nights, customers might be directed to their tables by the most absurdly overqualified maitre d’ on earth: Andrew Mason, who is also the chief executive officer and founder of Groupon (GRPN).

“In addition to actually greeting customers as they come in,” says Mason, “I’m running between the front of the house, where we have one system, and the back of the house, where we have another system, entering redundant data from one into the other. I’m just managing the mess that is this technology infrastructure for the business.”

Mason says his hosting gig, which he agreed to discuss on the condition that the establishment not be named, helps him understand what makes local merchants tick—how they book reservations, accept payments, and manage inventory. It’s all the stuff businesses do behind the scenes. It’s also, he says, the future of Groupon. Mason co-founded the company in 2008 as a website for selling marked-down spa packages and half-off pizza. Just four years later, it’s a 12,500-employee public company that e-mails daily deals—on everything from 43 percent-off Android tablets to discounted beekeeping classes—to 36 million customers in 48 countries. Mason built his empire by persuading retailers and restaurant owners to offer deals, but he’s rethinking what a tech company can offer such businesses, and a good way to understand them is to work at one. “I didn’t realize how hard it was to run a small business,” he says.

What Mason is doing is going out into the frontlines and learning to live in the customer’s skin to empathize and identify unmet needs. He wants to know how he can better serve them. In this case, Mason is becoming a restaurant owner.

In my opinion, of all the innovation techniques available to an innovation practitioner, entrepreneur, marketer or business leader none is more important than getting out on the field and observing people in their domains.

Any client I take on, I make an effort to become him. To get into their heads. Then, I make an effort to get into their customer’s heads. The only way to do that is to live their life.

Of course, this takes time. But it is infinitely valuable. Plus, I’ve found that the customer feels a lot more involved when you are “shadowing” them.

If you are setting out to live a day in the life of your customer, here are a few things you should observe to identify pain points or/and unmet needs :

  • Things that prompt shift in behavior.
  • Work-arounds and adaptations.
  • Body language.
  • Thing people care about.
  • Anything that surprises you.
  • Anything that questions your assumptions about how the world works.
  • Anything that you find irrational.

Bottom line: sitting on the sidelines isn’t going to tell you anything. You have to get into the game to understand the unspoken rules.

  • http://twitter.com/ovoinnovation Jeffrey Phillips

    Jorge, you hit the nail on the head. The best innovators live in their customers shoes. Most people in corporations who claim to be innovative rarely interact with customers, and don’t understand their challenges, frustrations and needs. Unfortunately, when we recommend ethnography or observation that seems too obvious and inconsequential to our clients. They expect magical tools and 3-D charts and graphs which will indicate the appropriate features or products. Doing the observation work is valuable, but I can promise you it is rarely applied.

    • http://www.game-changer.net Jorge Barba

      Hi Jeffrey, I forgot to mention that too. In my neck of the woods it is very rare to talk about good old observation. It’s like you are talking in different language.

      Like you said, the frontlines is an unknown world for Senior Executives. Obviously Groupon is very much a startup, so the question is, how can we motivate Corporate Executives to do observation work?

      Thanks,

      Jorge

  • http://www.jawbrain.com/ Jason Williams

    Jorge, great thoughts once again. One corporation I am reminded of is Walmart. Sam Walton was famous for flying his plane around the country and when spotting a Walmart store, he would land and pop in. No doubt there are debates to be held all day long about what mega corp. Walmart is doing now, but Sam started them on this path by observing the field…the customers and front line employees in his stores.

    • http://www.game-changer.net Jorge Barba

      Hi @jawbrain,

      Interesting. Thanks for pointing that out. I didn’t know that about Sam. What I did know was that he was rarely at his office (or didn’t have an office) because he preferred to spend time visiting stores and talking to customers. It’s like Gary Hamel says “While we are in here bullshitting about strategy, something is happening out there.”

      In what ways can we best motivate Corporate Executives to “be like Sam” and go out there and live with customers?

      Cheers,

      Jorge

      • http://www.jawbrain.com/ Jason Williams

        The best way to motivate execs to get involved in the front line is to create opportunities for them to experience it. My company has conducted a few ethnographic studies to better understand our end users’ unmet needs. Anyone from our side involved in the projects is now an absolute believer in the process. Skepticism remains from those that didn’t (which sadly includes some key execs). Experience trumps any industry data, report or article you can put front of someone.
        FYI – Jim Sinegal was another retail exec famous for keeping close tabs on the front line. Costco also rewards its front line employees more so than most other retailers. It shows how much they value one of the company’s best assets, front line employees that talk to customers every day.

        • http://www.game-changer.net Jorge Barba

          @jawbrain “Experience trumps any industry data” Right on!

          Thanks for the pointer on Jim Sinegal :)

          I’ve been around a few skeptics myself, really hard to nudge them. But that’s how it goes, if you want to change something you have to act differently.

          Cheers,

          Jorge

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