No Investment, No Growth!

There will always be a certain amount of risk and anxiety when it comes to developing new strategies. But it seems that the terror of another global crisis led the majority of the companies to stop developing growth strategies. Business leaders are completely risk adverse, massive amounts of cash are piling up, M&A diminished 14% globally since 2008, and stock buybacks just continue to increase.

In reality, business leaders always had to face uncertainty, knowing that if money is not invested… growth, expansion, and innovation just don’t happen!! However, they are doing nothing and nothing is just a terrible decision. Especially nowadays, when the market change rate is accelerating and products and services go from new to completely obsolete in less than 6 years (See the case of the first generation iPhone declared obsolete last June).

Likewise, companies can grow their markets like never before. One example is Samsung, “the world’s largest technology company by revenue” who entered the global smartphone market and conquered it (almost) in just 3 years. Competition isn’t confined to the industry leaders anymore – it can come from the smallest garage start up or from an international company.

“Business leaders can anticipate change” by understanding that uncertainty is unfamiliarity. This means that old ways can be adjusted and new methods acquired. The example provided by Bain is an extreme eye-opener. A couple of years ago everyone believed that money was scarce and talent was abundant. Today, businesses lack talent and that situation could change into a shortage of 95 million people by the end of the decade.

Bain finishes the article with a clever mnemonic, stating that what is needed is an “A” game: one that’s alert, agile and able to move with alacrity.

After reading the article, we at Proto Partners, questioned something that we consider essential. How can your company create innovative strategies that allow you to grow without knowing what your customers need? Well, you simply can’t! If you look carefully to what the biggest companies in all industry segments are doing, you see that they are focusing their attention on their customers, anticipating their needs and delivering outstanding customer experiences. They know that innovation and success become possible when they have feasible technology, it is economically viable and finally also desirable by the customer.

Read more here.

Secrets of the biggest selling launch ever

Been away for a while, time to return to improving the service experience of Australian customers one Service business at a time using Service Design and spending the time to really understand customers and how they view companies.

Below is an article from Seth Godin. Lots of lessons for all companies but as I see the world through the lens of service companies, imagine using these principles as a launching pad for idea generation for Service Businesses. Amazing!

Secrets of the biggest selling launch ever

Apple reports that on the first day they sold more than $150,000,000 worth of iPads. I can’t think of a product or movie or any other launch that has ever come close to generating that much direct revenue.

Are their tactics are reserved for giant consumer fads? I don’t think so. In fact, they work even better for smaller gigs and more focused markets.

Earn a permission asset. Over 25 years, Apple has earned the privilege of delivering anticipated, personal and relevant messages to their tribe. They can get the word out about a new product without a lot of money because one by one, they’ve signed people up. They didn’t sell 300,000 iPads in one day, they sold them over a few decades.

Don’t try to please everyone. There are countless people who don’t want one, haven’t heard of one or actively hate it. So what? (Please don’t gloss over this one just because it’s short. In fact, it’s the biggest challenge on this list).

Make a product(service) worth talking about. Sounds obvious. If it’s so obvious, then why don’t the other big companies ship stuff like this? Most of them are paralyzed going to meetings where they sand off the rough edges.

Make it easy for people to talk about you. Steve doesn’t have a blog. He doesn’t tweet and you can’t friend him on Facebook. That’s okay. The tribe loves to talk, and the iPad gave them something to talk about.

Build a platform for others to play in. Not just your users, but for people who want to reach your users.

Create a culture of wonder. Microsoft certainly has the engineers, the developers and the money to launch this. So why did they do the Zune instead? Because they never did the hard cultural work of creating the internal expectation that shipping products like this is possible and important.

Be willing to fail. Bold bets succeed–and sometimes they don’t. Is that okay with you? Launching the iPad had to be even more frightening than launching a book…

Give the tribe a badge. The cool thing about marketing the iPad is that it’s a visible symbol, a uniform. If you have one in the office on Monday, you were announcing your membership. And if it says, “sent from my iPad” on the bottom of your emails…

Don’t give up so easy. Apple clearly a faced a technical dip in creating this product… they worked on it for more than a dozen years. Most people would have given up long ago.

Don’t worry so much about conventional wisdom. The iPad is a closed system (not like the web) because so many Apple users like closed systems.
And the one thing I’d caution you about:

Don’t worry so much about having a big launch day. It looks good in the newspaper, but almost every successful brand or product(service) (Nike, JetBlue, Starbucks, IBM…) didn’t start that way.

A few things that will make it work even better going forward:

Create a product(service) that works better when your friends have one too. Some things (like a Costco membership or even email) fit into that category, because if more people join, the prices will go down or access will go up. Others (like the unlisted number to a great hot restaurant) don’t.

Make it cheap enough or powerful enough that organizations buy a lot at a time. To give away. To use as a tool.

They are brilliant as usual

Service Design – another word for “R&D for the rest of us”

This is just a great post by Jeffrey Phillips from Innovate on Purpose. he points out and with support from Gary Hamel, that most companies have a product innovation pipeline covered, however few have business model or service innovation or Service Design plans underway. Which seems crazy when so much more value can be created in these areas versus product innovation.  Please enjoy his article, he makes a really important point I believe

Something happens when you put on a lab coat and safety glasses. You have the immediate ability to explore concepts and ideas that may, or may not, become new products. And your time horizon shifts dramatically. Many people in primary R&D are examining technologies or molecules that won’t become products for many years.
“R&D for the rest of us”

The question we as innovators should ask ourselves, and our companies, is: why is this kind of thinking and investment committed solely in technology R&D? Why, in a pharmaceutical company, is there a team that is actively investigating new compounds and molecules that may become new drugs, but no one that is actively investigating new business strategies, new organizational hierarchies, new management philosophies? Why is innovation confined to the “R&D” wing of the business, and walled off from all the other things we do to add value to a business?

Certainly, R&D in a pharmaceutical firm is very important. It offers the chance for the discovery of a “blockbuster” new drug that could cure diseases or extend the life of seriously ill individuals. But I think we can all agree that a pharmaceutical firm (and by extension, any firm) adds tremendous value beyond primary product or service research. There are opportunities to dramatically innovate the business model (which health care reform may require), process or service delivery, customer experience and so many other factors or functions of the business. It’s as if all critical, exploratory thinking is confined to R&D, while the rest of the business is restricted to cost-efficient, process-oriented, short term thinking.

Where are the guys and gals in lab coats who are researching the long term disruptions of their business model, or service delivery model? Who is responsible for thinking about and generating new ideas about the relationships a pharmaceutical firm has with physicians and hospitals? Don’t you think these relationships and experiences are likely to change over time? Can we safely assume that these functions will remain the same over time, and all we have to do is find ways to cut costs? Just as Travelocity and Expedia decimated the travel agent industry, could other similar offerings radically change the interaction between a pharmaceutical company and its customers?

Gary Hamel points out in The Future of Management that most firms have some measure of product innovation underway at any point in time, and may have some inkling about service innovation or customer experience. Few, if any are innovating around business models or organizational structure, yet these are the places where competitive advantage is sustained over the long run. It’s time to assign a few more people to lab coats and safety glasses, and have an R&D team investigate all the aspects of the business where we believe we can add value. Just like Festivus, innovation is R&D for the rest of us.

Orange UK Open Innovation Challenge – The Next Orange Wednesday?

Have you seen this?

Orange UK Open Innovation Project

It’s a clever and innovative approach to generating service innovation and potentially Service Design for Orange in the UK. I thought readers of this blog might find using methods such as co-creation and collaboration to grow new streams of revenue of some interest. It is relatively unique and reminds me of trying to find the next “Orange Wednesday”  http://web.orange.co.uk/p/film/orange_wednesdays

Orange UK are looking for start-up businesses that they can partner with to provide more compelling online and on-phone services that increase their audience Open innovation project.

The project (OSCR) is an open innovation project that is being run as a collaboration between:

  • NESTA (The National Endowment for Science, Technology and the Arts)
  • Orange UK and
  • in partnership with live|work www.livework.co.uk ( a leading UK Service Design firm) and Wireless Innovation ( Satellite and Wireless solutions)

The project is based on the underlying concept of “shared risk and shared reward” and aims to demonstrate how Corporates can work with partners outside of their organisations on a mutually beneficial basis. As this is a call for innovations in services (which are difficult to patent), Orange are aiming for an ongoing business relationship with Orange that can embrace a range of different business models, including licensing, joint ventures or other forms of partnership.

Responses to the brief will then be submitted to the “Trusted Agent Team” (NESTA, live|work and Wireless Innovation) who will select the most promising to enter the “airlock”. It is important to note that Orange will not see any ideas at the selection stage and will not see any ideas until they leave the “airlock” (Trusted Agents will act on Orange’s behalf). Companies selected to enter the “airlock” will receive funding and support from the Trusted Agent Team to develop, protect and present their idea. After leaving the “airlock”, they will pitch their ideas to Orange who will then have 90 days to decide which ideas to pursue further. After this “right of first refusal”, those ideas that Orange rejects remain the intellectual property of the originator.

OSCR will launch on October 22nd, when companies interested in submitting ideas can meet with representatives from Orange to further understand their requirements. For more information on the project, please visit www.oscrproject.com

Enjoy! If you would like any information on leveraging Customer Experience to improve your engagement and profitability of your  customers please feel free to contact  me directly at damian.kernahan@protopartners.com.au or go to www.protopartners.com.au

The Demand for Service Innovation & Service Design

I sourced this from the University of Cambridge paper titled Succeeding through service innovation published in April 2008. It is just a section from the beginning but i thought it was compelling. More so because it explains that although Services are not new in any way, the level of complexity attached to them has risen significantly, it is is this which is now challenging many organisations as they seek to compete with their competitors that have not only embraced the complexity, but also delivered it in a consistent  manner.
Growth in service

The growth of service activity across industries is now widely recognised. However, is it really anything new? Service is as old as the division of labour and has been provided in various forms since record keeping began. Indeed writing records was a form of service! What has changed, however, is the scale and complexity of service systems –configurations of resources that create and deliver value to stakeholders through service activities.
Service systems are growing rapidly and have become an ever greater part of value creation in modern economies. We are paying proportionally more for services in the form of experience, advice, information, assurance, infrastructure and leasing, and proportionally less on growing, building and owning physical goods. And more than ever before, we are constrained by natural resources and have to achieve the triple targets of effectiveness, efficiency and sustainability. The rise in complexity is partly due to the expansion of our values in social, ecological and political dimensions.

The full report can be accessed.here

or visit Proto Partners here