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Cook's 5 Ways to Innovate
|| 2. Learn from Surprises || 3. Focus on Customer Metrics ||
|| 4. See Things Differently ||

Andy Taylor said that "the success of a business is when your customers are happy and tell their friends about it". Cook suggests that we ask our customers, "would you recommend this product to a friend?". Our goal should be to create lots of "promoter customers" who actively recommend our brand or product.

1. What & how to Measure. "Customer delight" is an old cliche. Peet's Coffee has found an innovative way to simultaneously generate, measure and broadcast customer delight with their Peet Polaroids - instant photos of happy customers with a little note from each of them - that are publicly displayed at each Peet's store along with a polaroid camera for adding your own feedback polaroid to the board.

While not every enterprise may find this feasible, what it accurately captures is the true level of customer satisfaction, evidenced by their behaviour, rather than just going by what they tell you. What percentage of "promoter customers" does a Peet's store create every day? A quick count of the polaroids compared to the total number of bills will reveal the figure. The challenge for firms is to measure the customer attutude and behaviour post-purchase.

2. How to set targets. Peter Drucker created the concept of Management by Objectives. He said that objectives should be SMART - specific, measurable, achievable, realistic and time-bound. Drucker famously said: "It's just another tool. It is not the great cure for management inefficiency… MBO works if you know the objectives, 90% of the time you don't."

Cook's 5 Ways to Innovate
|| 1. Mindset Changes || 2. Learn from Surprises ||
|| 3. Focus on Customer Metrics ||

Cook's second principle is that we should savour surprises - and learn from them. Here are ways to actively look for surprises and act upon them:

1. Look for the incongruous - things that are inconsistent, shouldn't be happening together and don't make sense. Akio Morita conceived the Walkman by observing teenagers lugging huge radios with them to the beach. Properly done, ethnographic research like Nokia's Everything-I-Touch study can uncover previously unknown behaviours and habits and more importantly, analyze the underlying beliefs, assumptions and thought patterns.

2. Act on the unexpected. What if people are using your product for something other than what you designed it to do? Don't turn up your nose - that may be the unexpected application that creates a huge market for your product! Arm & Hammer found that people were using its baking soda not just as a baking product, but also as a cleanser, a deodoriser and even as relief for an upset stomach! They continue to seek and publicise the unexpected uses to which people are putting their product. Another great example is Blue-Tack - a putty like adhesive which can be used to hide the spare key, among many other creative uses!

Scott Cook of Intuit recently articulated five principles of business innovation. Each of them can be implemented by using some simple creative thinking tools. Here is the first of the principles.

Cook’s 5 Ways to Innovate
|| 1. Mindset Changes || 2. Learn from Surprises ||

Cook said that innovation comes from “mindset changes”. A mindset is a fixed attitude that dictates our response to a situation. Here are three ways in which mindset change can be achieved and used to spark innovation:

1.Challenge the established business model. Coffee used to be sold in jars and vacuum-sealed pouches in supermarkets. Starbucks challenged this with their freshly brewed “coffee the way you want it” model. What’s the established business model in the FMCG industry? Distribution through retail shops. What about the fast growing model of multi-level-marketing? In some countries, this now accounts for more than 20% of some FMCG categories.

2. Change the dimension on which you compete. For some years now, video game consoles have been competing on the idea of “better, more life-like games and graphics”‘. Faster processors, higher-capacity storage media and Internet hubs are a few of the features that the Sony Playstation and Microsoft X-Box compete to do one better than the other on this dimension. On the other hand, Nintendo has now chosen to compete on the dimension of “engaging experience” with their revolutionary motion-sensitive wand and immersive user interface. It’s still a bit early to tell if they will succeed, but there’s no question that this is the real innovation in the category.

3. Challenge the dominant idea of the business. Edward de Bono talks about the railways, where the dominant idea is to transport people to places they want to go. What if railways took people to places they don’t want to go? De Bono tells the story of Nippon Rail, which bought up a large chunk of vacant land and then connected it to Tokyo by a high-speed railway line. They then made their money by selling the land, which was worth a lot more now that it was connected to Tokyo!

Thanks to Antonella Pavese for blogging about Scott Cook’s ideas.

Most marketeers are familiar with the product adoption curve, which postulates that customers can be segmented based upon their attitude and behaviour towards new products or technologies.

This framework challenges us to figure out how to get past the “chasm” separating early adopters and the early majority - often a key step towards brand/product success. (This idea was developed by Geoffrey Moore in his book Crossing the Chasm.)

One possibility is to apply the concept of “The Law of the Few” from Malcolm Gladwell’s book The Tipping Point, in which he describes “Connectors”, who know lots and lots of people, “Mavens”, who acquire knowledge and have a need to share it (like bloggers!) and “Salespeople”, who have strong powers of persuasion.

Until recently, the challenge has been how to find these people in large enough numbers to make a difference. Now a leading FMCG firm has created a website called Vocalpoint - “a community of influential Moms”, to find the intersection set of these three types.
Those who sign up to Vocalpoint are asked to answer questions like how many people they told about the last new product they tried and how many of those people accepted their recommendations.

Members get:
- To tell big companies what theythink.
- Early access to products and samples before their friends.

How could marketeers reach such people in countries with low Internet penetration? Here are a few ideas:
1. Publish a magazine designed for them.
2. Develop advertising that will appeal only to them.
3. Recruit them through local or virtual clubs.
4. Don’t even try to reach them but make it easy for them to find you (to find information about your brand/product/service.)
5. Develop a TV show that will appeal only to them.

There must be many more ways of doing this - do write in or leave a comment if you can suggest one!

I’ve often felt that many of todays taken-for-granted technologies were invented in 1970s science fiction novels. Now for the first time, I’ve come across an innovation that may have been first invented in a 1990s fantasy novel. In their book Good Omens, Neil Gaiman and Terry Pratchett describe a diabolical fast-food tycoon who creates CHOW - tasty food products with “the nutritional value of a Sony Walkman. It didn’t matter how much you ate, you lost weight”

Chef / inventor David Burke has created Flavor Spray Diet - a range of spray-on artificial food flavourings that contain zero calories, zero fat, zero cholesterol and zero carbohydrates. With recipe tips like Chocolate Flavor Spray on strawberries or pineapple or Tomato Basil Flavor Spray on crackers, this could be the answer to many a wannabe dieter’s dreams.

Michael Crichton’s novel Jurassic Park describes the resurrection of long-extinct dinosaurs by scientists working with DNA from fossils.

Now, the US Agricultural Research Service has resurrected some of the extinct varieties of carrots. Carrots used to naturally occur in many colours including yellow, white, dark orange, bright red and even purple. Orange carrots captured the world market decades ago, but carrots of other colours contain pigments with distinct health benefits. The best part is they all taste the same!

From Communication Satellites (Arthur Clarke), to Clamshell Cellphones (Star Trek), to Virtual Reality (Neuromancer), many of the late 20th and early 21st century’s innovations have their origins in science fiction.

The lesson is clear: marketeers looking for new ideas should read lots of science fiction.

PS - To illustrate the point from my previous post, I’ve renamed and re-posted this article! It used to be called “Fantasy foods come to life”

Or, as it's better known today, Chilean Sea Bass.

Renamed in 1977 by marketeer Lee Lantz, who discovered it in Valparaiso, Chile, and found it to have "texture similar to Atlantic cod’s, the richness of tuna, the innocuous mild flavor of a flounder",with "fat content (that) made it feel almost buttery in the mouth".

He quickly figured that its taste would appeal to Americans and branded it "Chilean Sea Bass", even though it doesn't belong to the bass family of fish!

The recent study on more people voting for Hillary Clinton if she used her maiden name and Kahn and Miller's paper on the effectiveness of non-descriptive brand names delineate the importance of choosing evocative brand names. Or would you rather have a Patagonian Toothfish for lunch?!

Full story at Reveries Magazine. 

I’ve been a comic-book fan ever since I learned to read. Superman was one of my favourite characters. But as I grew older, the stories seemed simplistic and boring, the art was uninspiring, and let’s face it - Superman was practically invincible, so the end of each story was never in doubt and that didn’t really make for an engaging story.

In the 1990s, I came across remaindered copies of “The Man of Steel” - a mini-series by writer/artist John Byrne that essentially re-wrote Superman’s origin story, making him both more exotically alien and more vulnerable, thus more human. The regular Superman comics then took over, telling the story of this new Superman (pretty much as though the older storyline did not exist). The Modern Age Superman was infinitely more interesting - the humanity and vulnerability of the character led to engaging stories such as “exile”, where an over-worked and sleep-deprived Superman loses self-control and decides to leave Earth to prevent causing any damage, travelling through space as a hero and later a slave, until he finds redemption.

As any comic-book fan knows, makeovers and renovations are part of the industry’s attempt to keep their characters fresh and up-to-date. This is part of the reason why super-hero comics have lasted so long. Take Batman - another favourite character. who started life as a “grim crime-fighter”, took on a colourful sidekick (Robin), in an attempt to soften the character, went on to become a campy detective and finally reverted to his original gritty and grim self in Frank Miller’s classic “The Dark Knight Returns”.

Even the Batman movies have shown different facets of Batman. Contrast Michael Keaton’s grim avenger to Val Kilmer’s playboyish portrayal and George Clooney’s campy performance. The latest - “Batman Begins” seems inspired by Miller’s “Batman:Year One” - the Batman equivalent of “Man of Steel”.

Comic books are consumed on a monthly basis, like lots of other fast-moving products. Many of these could learn something from the comic-book industry. Times change, people’s attitudes and tastes evolve. Finding ways to keep your offering fresh and interesting while remaining true to your roots is always going to be a challenge. Perhaps Superman & Batman can help.

Grant McCracken has written a good article on Ethnographic Research. He makes an excellent point about the misuse of “partial ethnography”, which “disintermediates the connection between the corporation and the consumer”, allowing for the discovery of how people actually interact with their environments, with products and with others. The “Everything-I-Touch” photo diary is an example of this.

However, this is mere observation and lacks analysis.

As Grant puts it, “In a mature methodological universe, the ethnographer returns not just with brute observations but with insights. And this is called for because many of the things the corporation needs to know are not evident on the surface of the consumer’s life. We have to see beneath the surface into the beliefs and assumptions, the patterns and the practices, that make this life practical and sensible. No mere “eyes and ears” ethnographer can supply these deeper insights.”

Grant also writes about Nokia, which seems to have understood the true potential of the tool. “Using ethnography, Nokia has drilled down into some of the real uses of the phone, and especially the way the phone interacts with the consumer’s life. The second ad shows us that this Nokia is not merely an “enhancement” of Jill’s life but something deeply personal, a way of marking the boundaries of her social life, a way of deciding whether someone is in or out. And in the first ad, we see that the Nokia is actually a way to remove people from her life, as when Jill “deletes” her boyfriend. “

Nokia’s “User Experience Group” continues to produce fascinating insights; the latest being their “Where’s-the-phone” study.

The lesson for marketeers is to use Ethnography to its maximum potential - not just to discover “what” people do or “how” they do it, but to go deeper and learn “why” they do it and then to design their offerings centred around these insights.

Shopping used to be a chore. Mom would send you to the neighbourhood store with a list and you would come back home, groaning under the weight of the groceries.

Today, for people like the author of Shop Diary, shopping is clearly a hedonistic pursuit - something to be savoured and enjoyed.

For this customer segment, products must be designed with cool features… such as jeans with triangle pockets.

This means that marketeers must design products that not only deliver basic functional value (what Kotler called hygiene factors) but also appeal to the senses through emotion-provoking design features with little or no functional value.

Also, shopping must be considered as an experience, not just a service, replete with super secret sales and other such attractive come-hithers.

Can products also provide experiences in stores? More on this later.

How could you segment the toy market?

Boys, Girls, Toddlers, Pre-schoolers, Tweens, Teens. Upper, middle and lower income. Classic mass-market demographic segmentation, right?

How about adult senior citizens? Japanese firms like Nintendo and Tomy have discovered a large, affluent and lucrative customer segment for toys by designing offerings targeted at the over-60 set.

Tomy, which is best known for making Transformers, designed a talking robotic doll which tells its owner how much it loves her and welcomes her home when she walks back into the house. The majority of buyers are retired women who live alone.

While there isn't any information about how Tomy developed this innovation, I'd bet a large sum that it comes down to observing what Peter Drucker called the "unexpected" source of innovation.

Another toy company that has tailored its products for adults is Nintendo. Its "Brain Training Game" has been a hit in Japan with people over the age of 60 who believe it will keep them mentally agile. The handheld computer game presents a series of puzzles based on mathematics and Japanese spelling. It also allows players to keep score of how sharp their responses are.

What lucrative, unexpected customer segments might you be missing in your market or business? And how could you go about finding them?

Via Putting People First.
Full story on BBC.