Category Archives: Strategy

No competition = No innovation?

Can there be innovation without competition?

David Armano posited this question on his blog and I thought I add my own thoughts to the question and hopefully incite some useful discussion.

I actually think there is innovation without competition. If we all lived in a perfect world it would be pretty boring. More of the same. Who would want to like in a world like that? Not me.

The type of innovation Armano is talking about is incremental innovation. The type that leads to tit-for-tat. One firm outdoing, outworking the other one. Think line extensions and upgrades.

Both Google and Facebook are incremental innovations. Improvements over the originals. They’re simply better executed ideas than the originals. Head to head competition is never smart, it’s tit-for-tat ego driven BS that leads to predictable outcomes. Red Oceans.

The type of innovation that exists without competition is disruptive. This type of innovation is often driven by external sources, not direct competition. A recent example of what could potentially disrupt the banking industry is BankSimple. The guy who started it is not a banker (equity researcher), he was just pissed off at the complexity that is banking and decided to create an alternative.

Another example of disruptive innovation is the iPod, the Kindle, XM Satellite Radio. We could argue that Groupon is a form of disruption as it makes it possible for people to experience new things when they might not have because of price, while at the same time providing merchants with an infusion of new clients.

We could also argue that Jack Dorsey‘s newest venture, Square, can potentially disrupt the financial services space by enabling any individual or small business to accept credit cards for any product or service at any time in any place for no cost. Very powerful.

An example of a disruptive idea in direct competition (a rarity) is the Nintendo Wii because it made video games accessible to non-consumers (moms, dads).

Put simply, if you see possibilities where no one else does; you can innovate where there is no competition. But the best type of innovation though, is to go where there is no competition and define the terms of competition. To create a Blue Ocean.

What do you think, can there be innovation without competition? Do you agree with my examples? What other examples come to mind?

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Please understand me. I want you to

please understand me

I have a few friends who are looking for a job and have been for a awhile. They use digital means such as Linkedin, Simply Hired, Monster to find jobs as well as network with people. This process takes a lot of time, but the biggest problem is they still live with their parents; and the parents are fed up with it.

They’ve even told me their parents want to take their computers away because they think finding a job through the internet is dumb. They say they should job hunt the old fashioned way by going door to door. Say what?

It’s ironic because recruiters are changing their employee-hunting tactics to focus more on online:

Rather than sift through mounds of online applications, they are going out to hunt for candidates themselves. Many plan to scale back their use of online job boards, which they say generate mostly unqualified leads, and hunt for candidates with a particular expertise on places like LinkedIn Corp.’s professional networking site before they post an opening. As the market gets more competitive again, they are hiring recruiters with expertise in headhunting and networking, rather than those with experience processing paperwork.

I’m not saying the old fashioned way of job hunting is wrong, it’s just that parents fail to understand how the internet is changing how we do most things;  including job hunting. Why this disconnect?

Because of ignorance. They don’t take the time to step into our world and see what we see. This same principle applies to understanding the world of both our customers and employees.

Why is this important?

Step into their world

I recently argued that CEO’s should use social media because they need to get an intimate feel for the tools their customers and employees use to communicate instead of leaving it up to their lieutenants to figure it out. If they don’t experience these tools firsthand, they’ll never get the visceral experience of how these tools are really used in the front lines.

I don’t know about you but I like to experience things first hand and get an intuitive feel for them because it’s the only way I can understand how others might use, react, behave, etc.

Your customers want you to understand them

Point: The only way to understand what customers (our children) are thinking is to put ourselves in their shoes and step into their world. Look at the world from their eyes. We have to close the gap between their world and ours if we are to understand and help solve their problems in a better way.

How do you do that?

Easy.

Observe, notice, ask, listen, repeat.

 

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What business are you really in?

It’s not the most obvious one.

Do you think Zappos is in the online retail business? Not according to Tony Hsieh:

 

Because they’re in ‘the stories & memories business’ they operate differently than traditional retailers. In their eyes they don’t compete with Amazon, they compete with the Ritz Carlton.

The wheel gets reinvented all the time

“Let’s not reinvent the wheel” How many times have you heard that? How many times have you said it?

For practical purposes, people don’t like to reinvent the wheel. It’s better to do, follow, use what is already there because it saves us a lot of time and grief by letting us see blind alleys and lost trails of others who have worked in our area.

Reverse brainstorming: A better way to generate creative ideas

brainstorming

When we consider ‘how aha really happens‘ the traditional method we use for generating creative ideas, brainstorming, has flaws. Ask your friends, when do they have their best ideas? They will seldom answer, ‘during a brainstorming session’. Most likely it was in the shower, while driving and stuck in traffic or while daydreaming. The fact of the matter is ‘we can’t schedule creativity’ because we don’t know when that ‘aha’ will strike. Yet despite this basic human process we find that managers schedule a specific time for teams to come up with creative ideas.

This is not how creativity works in our brains. (Read page two of ‘How Aha really happens’):

“Over the past decade, neuroscientists have come a long way in figuring out how ideas form in the human mind. As it turns out, their findings contradict how most companies understand and organize innovation. But very few executives know that. They continue applying their conventional wisdom, unaware that science has overturned it.”

Another common belief is that having diverse people involved in a brainstorming session improves idea generation and selection. While this is true that doesn’t mean that the human element of ‘bias’ doesn’t exist. Group dynamics stifle innovation:

For example, in brainstorming sessions several people can quickly dominate a conversation often restricting the sharing of all potential ideas. In other cases, individuals may think less critically about a problem because they are happy to let others do the heavy lifting.  And, those people who lack confidence or internal credibility are more likely to practice self-censorship within peer groups. Finally, groups can be a breeding-ground for organizational barriers such as cultural norms and management bias that limit creativity and critical thinking.

Ok so now what?

Hybrid Model of Brainstorming

I think a better way of brainstorming is doing the opposite of typical brainstorming. For example, instead of brainstorming in groups to solve a particular problem at a particular time, setup a weekly meeting and let people bring in ideas on any subject that strike them at any time during the week. Interesting right?

Also in a traditional brainstorming session the group picks out the idea right there. Instead, don’t decide right away. Because if you brought an idea on any topic at all, the rest of the group might not have thought about the topic before. They’ll greet you with a blank stare in their face.

So instead of evaluating your idea the group will ask you to explain the idea as best you can, including all the elements that you combined in your head to come up with the idea. Then everyone goes off and think about individually and the discussion can continue over emails, telephone or in person. Eventually, a promising idea might emerge from the pack. At that time, it’s time for the ‘What Works Matrix‘ as an individual or group exercise.

Bottom line is creating the element of surprise at the beginning of idea generation. Because if you don’t create surprises you aren’t innovating.

Reverse brainstorming isn’t new

Now that you know how creativity works in the brain, the point is that our brains make connections continuously without us being aware of it. And because this is a natural human process, it’s key that we take advantage of in a whole week or month and not just in a two hour session.

Now, new research suggests that this hybrid model of brainstorming is more effective than the traditional one. While the research may be new, the practice is not. Firms such as IDEO have been doing this for years. They’re well known for including people from diverse backgrounds in all their meetings, essentially preparing a cocktail mix of ingredients to generate creative ideas.

This is how creativity works in the brain.

Obstacles don’t go away easily

Personally, I practice this model of brainstorming myself but have encountered problems. For example, if you’re the only one who brainstorms this way you’ll end up generating ideas that make no sense to others. They’ll think you’re nuts but at the same time they’ll give you the benefit of the doubt since you seem to have all the cool non-conventional ideas. Another problem is that people are used to brainstorming and selecting an idea right there. They don’t want to give an idea time to ‘simmer’ in their brains because of the bias for action. And also because they have more ‘important’ things to do in their routines and supposedly have no time to think. Blah!

So what to do?

Well you have to get people on board in the new way of brainstorming. My recommendation is ‘educate’ your team on how creativity works in our brains so they become aware of their own tendencies. This isn’t necessarily going to eliminate all obstacles but it’s an effective way to get people to believe, and as a plus they’ll feel smarter.

Thoughts? Do you practice a version of reverse brainstorming?

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To innovate: Steal don’t imitate

When no one knows what’s going to happen we’ll naturally look at other people for clues on how to behave. This is the basis of imitation, and it’s a survival tactic. Simply said, in an environment where the world is changing, the best strategy is lots of imitation. The problem with this is we’re rarely aware of how ‘much imitation’ is necessary and plain and simple. It’s a balancing act to decide what to copy and what not.

Practice ‘Smart Stealing’

The best strategy is to ‘steal’ from different sources, ideally ‘the best’ sources outside your industry.

Examples abound of companies who have ‘stolen’ from others. Apple stole Xerox’s musical interface and mouse ideas. Facebook and MySpace stole Friendster’s social network idea. Microsoft stole Netscape’s browser idea. . It’s even happening in the Venture Capital Industry where one .

Laser focused products are more emotional

steve jobs

This post isn’t about Steve Jobs, it’s about emotion and how to create it with your product.

When I was a kid I would spend endless hours reading magazines at supermarkets or bookstores. From PC Magazine, Sports Illustrated, Game Pro, National Geographic, Road & Track, SLAM, you name it. At one point I had subscriptions to 15 different magazines that I got in the mail, my mom wasn’t too happy about it. And she also wasn’t happy because I kept them all well after I read them.

Out of all the magazines I read, the one’s I look more forward to reading were the ones about cars. I just loved (and still do) reading Road & Track’s car reviews because of how they described their car experience, I can still remember some of the words used in the .

Words like: ‘staggering power’ when pushing the accelerator, ‘stratospheric’ when talking about horsepower, ‘opera-esque’ when describing the sound of the engine, ‘astonishing’ when describing the car…you get the picture. So what’s the big deal? Well the fact that I’m telling you about it today and remember it is telling. Emotions are hard to forget and even though I’ve never driven these cars, the vivid descriptions make me feel as though I almost did.

I know what you’re thinking, we already know benefits trump features. Yup, but how?

Focus.

Jeremy Clarkson, host of Top Gear, is a like a little kid when talking about cars. It’s all emotion. Even if you aren’t a car fanatic you’ll love them after hearing Clarkson, just like in the video below where he drives the Ferrari Enzo. Tell me it doesn’t get your blood moving?

Did you notice how he mentions the word ‘focus’ to the describe how the car’s interior doesn’t distract you from driving? If you own and iPod, iPhone or iPad then you know what I mean. Steve Jobs is the master at creating emotions for Apple products. He makes it sound so genuine because his products satisfy him. So when he gives a keynote speech, he’s like a little kid talking to you about his new toy. Emotional!

Google did the same thing with Chrome. It’s laser focused on enabling us to browse the web faster. The user interface has only what’s necessary to browse and it makes you almost feel like the browser isn’t even there. That’s focus!

Another example I’ll give you to chew on is how describes how the new makes it’s driver feel: confident. Confident that you can get the best lap times and win the race. That’s what they really care about.

And with that last paragraph I get to the intent of this post: Focused products are more emotional. People don’t care about your products features, they care about what it does for them. And the way to do that is by making your product laser focused on satisfying that job.

In the Enzo’s case the job is driving, in the iPod’s case it’s carrying all your music in your pocket. They eliminated all the things that can ‘distract’ from satisfying that job.

Thoughts? Do you think products that are laser focused on satisfying a specific job more emotional?

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