"It is impossible for ideas to
compete in the marketplace if no forum for
their presentation is provided or available."
Thomas Mann, 1896
The Business Forum
Strategy and the Customer
By David G. Chaudron, PhD
The flavor of the year seems to taste
like innovation, so some comments seem in order.
From one perspective, innovation is
having interesting people come up with novel ideas. If that is all what was
needed, we would just need to put Angela Merkel, the Chancellor of Germany
in the same room with Eddie Murphy, the famous comic, and the world’s
problems would be solved. Though entertaining, this meeting might involve
much disruption, but little innovation.
In this month’s Harvard Business
Review, authors describe a matrix entailing what, and how much internal
change is necessary for any given innovation: On one axis, how much the
business model of the company needs to change; On the other, how much
technical competencies need to be adapted or added.
Please note that what may be a
“(radical) game changer” for one company may only be a routine change for
Corporate inertia, biased measurement
systems, resistance to new ways of doing things, and a sincere fear of
cannibalizing existing sales all push older and larger organizations to make
only routine, incremental improvements. Over-eager management, or those CEOs
fixated on the “new big thing” can easily overlook the complications of
trying something radically different from what they make, or how they make
their current products.
The sales of an innovation into the
marketplace is a slightly different matter. While a product may be
innovative, it does not mean it will sell in the marketplace. For all of us
gadget heads out there, just look in your closet at all of those neat things
you bought, but never became successful.
For an innovation to be successful with
a customer, I am reminded of Everett Roger’s Diffusion of Innovation theory,
described below, as modified by myself and others. For a new product or
service to be successful in the marketplace, it must have:
Is it a better product than what customers already use, or want to use?
Despite its problems, those who remember jammed paper in fax machines are
grateful for email.
How well can the followers of trends discover what early adopters are doing?
Can we say, “Keeping up with the Kardashians”?
How frictionless is the first try at using it? Zappos has a wonderful policy
for shoe buyers, offering free returns of the shoes their customers buy.
How easy or obvious is it to use? (It took me four hours to teach my parents
how to use a cell phone and make a call.)
How well does the product just “snap in place” what other things I am doing?
Many users were surprised by the changes made from Windows XP to Windows 7
and 8. What should have been a seamless upgrade, was not.
Match the degree of customer
conformity: Is there a group norm encouraging new and different things? If
not, how do you access the influential few, or make it appear that many are
already using the product?
How elastic is the matching of sudden shifts in supply and demand?
While scalability is always a factor
(Remember the old IBM commercial, where a company was watching a counter of
its first internet sales? Everyone was happy until the number changed from 6
to 60,000.), it is especially important with the “lone inventor.” The
individuals, or small group of people, often have the technical expertise to
make revolutionary change, and do not have an old business model to blow up.
Perhaps they envision themselves becoming another Bill Gates, riding the
wave from startup to billionaire. Or perhaps they may wish for an “acqui-hire”,
where a larger corporation buys them out and they get lucrative jobs in the
larger company. Unfortunately they may really only be building a “lifestyle”
business that provides the founders with a comfortable income, but will not
grow substantially larger. Angel and venture capitalists, on the other hand,
look for investments that will make outsize returns to make up for their
many failures. As a result, they will not likely invest in those companies
whose technology or business model will not scale.
Given that all these factors come into
play when we talk about successful innovation, it is a wonder that we get
new, better stuff at all?
Author Profile - David G. Chaudron
David G. Chaudron
is a Fellow of The Business Forum Institute and the Managing
Partner of Organized Change Consultancy, and the developer
of the Organized Change Survey System, writes with more than
twenty years of experience with a wide variety of
organizations including manufacturing, electronics, NGO,
petrochemical, biotechnology, government, banking, venture
capital and financial service sectors. He works
internationally with clients in North America, South
America, Europe and the Middle East. David is the author of
many practical articles on strategic planning and
organizational change and he has assisted organizations in
planning their strategies, changing their organizations,
surveying their employees, building their teams, and
improving the leadership styles of their executives.
Visit the Authors Web Site
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