Strategy. Innovation. Brand.

business innovation

Branding: The Value of Face Time

We need some face time.

Long ago, when I was a product manager at Solbourne Computer, we were trying to answer some nagging questions about our market. We built very fast symmetric multiprocessing Unix servers — back when symmetric multi-processing (SMP) was a brave new thing. In the early going, our machines were essentially hand built and we had difficulty meeting demand. As we worked our way down the manufacturing curve, however, we learned how to build machines more quickly. It soon became clear that we could not only satisfy demand but exceed it.

So we needed more demand. To identify potential sources of demand, we studied all of our sales to date. What patterns could we identify? Unfortunately, the raw data revealed almost nothing. There were no real patterns in terms of SIC code, geography, or industry. We had sold servers to national laboratories, astronomical observatories, large companies, medium-sized companies, universities, B2B companies, B2C companies, and so on.

Since we couldn’t identify any clear patterns in the data, we decided to go out and meet our early customers. We reached out to all of our customers and requested face-to-face meetings. Ultimately, we scheduled meetings with about 50 different customers.

As we returned from our customer calls, we held lengthy meetings to discuss the results. Again, no patterns emerged. Finally, someone suggested that we simply describe our customers. Were they fat or thin? Short or tall? Old or young? Frankly, I thought that was a dumb idea but it turned out to be brilliant. As we began describing the customers, a very clear pattern emerged. First, they were all men. Second, they were in their early to mid 30s. Third, they were all heads of their department. Titles varied but they were what we would today call the CIO. Fourth, and most important, they had recently replaced a much older manager. They were new in their positions and wanted to make their mark.

Why did they buy Solbourne? We were a small company with hot new technology — symmetric multiprocessing. But we also ran on the Unix operating system — a very safe choice. Further, the benefits of SMP were well understood — the concepts were proven though the technology was new. So newly installed, youngish CIOs could use us to demonstrate that the old regime was out; a new regime was in. They could look bold without worrying too much about failure. When we figured this out, one of our pithier sales reps said, “Geez… it’s like dogs peeing on a wall. They’re using our machines to mark their territory.” All we had to do then was to figure out where the new CIOs were. But that’s a different story.

So, what’s the moral of the story? We thought we were selling very sophisticated, state-of-the-art servers. But actually, we were fulfilling a psycho/social need. We gave our buyers signaling equipment. With Solbourne servers, they could signal that they had arrived. It was a sobering lesson in selling technology. It’s often not the technology that matters but rather the (often unspoken) need the technology addresses. It’s also a lesson in the power of face-to-face meetings. If we hadn’t met our customers personally, we never would have figured it out.

 

Innovation: Message Sponsors

You want to convince your organization of the need for change. So, you create a killer speech and deliver it convincingly. The job’s done, right? Wrong.

Even if you deliver a great speech to your entire organization, you still have a lot more work to do. It’s just possible that some people in your organization will oppose your changes. They may react to your message with fear rather than trust. They may believe that the change you propose will create more problems rather than more solutions.

Who sponsors your message?

What to do? Recruit other leaders within your organization to sponsor the message. Recruit your thought leaders and opinion leaders — not just your senior managers. Your opinion leaders will come from all levels of your organization. You may well know who they are already. If you don’t, just ask around — people will tell you whom they trust. To recruit trusted opinion leaders to your side, just sit down with each of them and ask for their help. Explain why the change is necessary and why you need their help. Then explain the key elements of the message that you would like them to sponsor.

If you ask for support early in the change process, you’re likely to get it. On the other hand, if you give your killer speech first and then ask for support, it may be harder to get. Opinions have already formed and positions have started to solidify. Like voting in Chicago, you need to recruit sponsors early and often. Learn more in the video.

Innovation and Diversity

I should have studied liberal arts.

Do you have an MBA? So do most of the people I work with at my client organizations. One of the ways I add value is merely by the fact that I don’t have an MBA.

It’s not that having an MBA is a bad thing. It’s that so many companies are run by people educated in the same way — they all have MBAs. The fact that I don’t have an MBA doesn’t mean that I think better than they do. But I do think differently. Sometimes that creates problems. Oftentimes, it creates opportunity.

If all your employees think alike, then you limit your opportunity to be creative. Creativity comes from connections. By connecting concepts or ideas in different ways, you can create something entirely new. This works at an individual level as well as an organizational level. If you read only things that you agree with, you merely reinforce existing connections. If you read things that you disagree with, you’ll create new connections. That’s good for your mental health. It’s also good for your creativity.

At the organizational level, connecting new concepts can lead to important innovations. Indeed, the ability to innovate is the strongest argument I know for diversity in the workforce. If you bring together people with different backgrounds and help them form teams, interesting things start to happen.

In this sense, “diversity” includes ethnic, economic, and cultural diversity. It especially includes academic diversity. As a leader, you want your engineers, say, to mix and mingle with your humanities graduates. Perhaps your lit majors could improve your MBAs’ communication skills. Perhaps your philosophers can help you see things in an entirely new light. In today’s world, innovation requires that you bring together insights from multiple disciplines to “mash up” ideas and create new ways of seeing and doing.

Most companies keep data on ethnic diversity within their workforce. However, they don’t usually keep statistics on the different academic specialties represented among their employees. You may well have enough MBAs. But do you have enough linguists? Philosophers? Sociologists? Anthropologists? Artists? If not, it’s time to start recruiting. The result could well be a healthier, more innovative company.

 

Innovation and the Installed Base

How could God create the entire universe in only six days? He didn’t have to worry about an installed base.

Need to upgrade to Universe 2.0?

It’s fairly easy to innovate technically when you don’t have customers. You can adapt new technologies or new ideas without fear of alienating current users. Once you have customers, you have to pay attention to their needs. That includes the ability to upgrade seamlessly from one generation to another. Your customers feel that they’ve paid you money for a long time so their needs should dominate your planning. That may mean that you have to slow down new releases of your product to help your installed base tag along.

Think about it this way: which company is more innovative: Apple or Microsoft? Most people would say that Apple is far more innovative. But which company takes better care of its installed base? By and large, Microsoft has. When Microsoft releases a new operating system, they actually test to determine if old applications will run on the new platform. Apple is much quicker to dump the old stuff to keep the new stuff coming. The latest example is the new plug for the iPhone 5. If and when I upgrade to the iPhone 5, I’ll obsolete half a dozen perfectly good cables that no longer fit. That’s irritating but it may well get me into new technologies that work better than the old.

So do innovation and good customer care always conflict with each other? Not necessarily. Your fundamental commitment to customers is not that you’ll help them to move from release to release. Your promise is actually simpler — that you’ll stay in business to continue to serve your customers. I’m a veteran of a number of companies that no longer exist. Our customers were totally out of luck — they got nothing. Much better to give your customers something new — even if it entails ripping out the old — than it is to give them nothing at all.

When is it acceptable to ship an innovation that disrupts your installed base? I think there are two answers: 1) When a new technology emerges that allows you to provide much better solutions at a lower cost. You need to hop to a new platform to take advantage of the change. I saw this happen in the transition from host-centric to client/server software. It’s happening again today with cloud computing and mobile platforms. 2) When a competitor is shipping a solution that will disrupt your relationship with your installed base. Better to disrupt your own base than to let someone else do it for you.

And, how do build innovative new solutions while also maintaining and developing your traditional, bread-and-butter products? It’s not easy. The best answer I’ve seen is the ambidextrous organization which you can read about here.

 

Better Communication Through Plumbing

Got an idea? We can help.

Want to improve communication in your organization? Reduce the number of bathrooms. Everybody needs to use the bathroom from time to time. With fewer bathrooms to choose from, people are more likely to bump into each other. When they do, they wind up communicating.

One of your goals is to get people to bump into each other (more or less literally) as often as possible. It’s particularly important to get people from different disciplines to mix and mingle. When they do, sparks of creativity start to fly. You can design (or re-design) your space to ensure that this happens. Instead of having a coffee pot in every corner of the building, have only one coffee service centrally located. Coffee is a people magnet. Be sure to have some tables nearby so people will have a place to chat while consuming their caffeine.

You can also randomize your offices. Instead of having engineers sit only with engineers and marketers sit only with marketers, mix them up a bit. Ensure that people from different disciplines get to know each other. It sparks new ideas and reduces the us-versus-them mentality.

What else can you do? Well, maybe you should encourage your employees to take up smoking. Watch the video to find out why.

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