Thursday, October 06, 2016

New innovation realities require new mindsets and tools

Paul Hobcraft and I have been writing a series of blog posts about innovation, ecosystems, platforms and what we believe customers will ultimately demand:  seamless experiences.  As products and services proliferate and basic needs are met, customers become more sophisticated and more demanding, desiring products, services and business models that work together and don't require configuration, integration or effort by the consumer to "make them work".  Customers and consumers increasingly expect a seamless experience when using a new product.  If the product or service requires the customer to combine products, read manuals, acquire other products or services to make the solution work, the new product is likely to receive far less acclaim.

Understanding that, we should understand also that the tools that once helped innovators create new products aren't the same tools that we need today when customers demand seamless experiences.  Or, put another way, those original tools are still valuable, but by themselves they solve only a small portion of the overall challenge.  Take, for example, "jobs to be done" methodologies.

Jobs to be done

First developed by Clayton Christensen and expanded on by Tony Ulwick and others, "jobs to be done" is a nice methodology to understand customer needs.  Christensen and Ulwick propose the idea that customers hire products to do jobs for them.  If a product does the job well, it is "hired".  To help customers accomplish tasks, we need to understand the jobs they are doing.  This methodology has worked well for years to help innovators find unmet needs that can be addressed.  However, the focus for today's innovation needs may be too narrow. Traditionally, the "jobs to be done" were relatively discrete and narrowly focused, often leading to product features or benefits.  In a market where seamless experiences become more important, a too narrow application of "jobs to be done" risks solving only a fraction of the total customer need. 

Paul and I have suggested that perhaps we should move from "jobs to be done" to "experiences to be had" - that is, widening the aperture of the question to encompass the entire experience, rather than narrowly focusing just on discrete jobs.

Whole Product

This is an "oldy but a goody" as my father likes to say.  Geoffrey Moore developed the concept of the "whole product" in the 1980s and the concepts are still true today, especially in high tech fields.  Whole product refers to the idea that the majority of customers don't want to buy untested, unproven technologies.  Early adopters and tech enthusiasts will buy new technology, but the larger market waits for demonstrated proof of viability, compatibility, product support, complementary products, good support services.  Thus, Moore suggests that a "whole product" is one that combines all of these capabilities and features.

We'd like to adopt this thinking by saying that customers want more than "whole products" they want "whole experiences".  The product focused thinking is valuable, but must be combined with the larger context of what the customer is trying to accomplish, what experiences they want or need from a new product and the ecosystem in which the new product or service must operate.  A fantastic stand alone product that fails to work within the customer's ecosystem of products and services, or one that forces the customer to make compromises or work diligently to integrate to other solutions is not going to be successful.

Customer Experience Journey

This methodology is increasingly gaining popularity because it requires an innovator to think about the entire "life span" of a customer's interaction with his or her products.  The journey considers the awareness, acquisition and use of a product, and done well also considers aspects like omni-channel experience and the eventual disuse and discarding of a product or service.  Customer experience journeys highlight "touchpoints" or moments of truth where the use of the product can be combined with experiential factors like additional material, contact by a support center, access to the product's web site and many other interactions that build the experience of the product.  Those touch points can improve a customer's experience or degrade it.  The customer experience journey is a valuable step toward understanding the experiential aspects of the product in the customer's life.

However, even this isn't enough because the customer experience journey can be a very narrow perspective, taken from the aspect of the product and not fully considering how the customer views the product in relation to its ecosystem and the experiences the customer is hoping to achieve overall.

Design Thinking

Increasingly, design thinking is percolating into the innovator's toolbox.  IDEO and others have been proponents of design thinking for years, and I'm happy to say that design thinking is growing as an innovation input.  The risk with design thinking is again that it becomes "product design" thinking, focused on the design of products, rather than design thinking meant to help innovators and customers design products, services and experiences.

A seamless experience is almost by definition a designed experience.  There are very few accidents that result in a perfectly seamless experience that meet or exceed customer expectations.  To do this effectively, we need to understand the customer's "whole experience" expectations and map customer journeys, and then use design thinking to craft the anticipated experience.

Once we understand the designed experience, we can then begin to understand how, or even if, such expectations can be met by the existing ecosystems and platforms.


Unless your company name is Apple, you are very unlikely to build a completely integrated, designed experience that is a closed ecosystem.  Apple did accomplish this by creating a small range of products (iPod, iPhone, iPad, etc) that are basically extensions of the same core product and surrounding them with the same sets of features and services (iTunes as an example). 

Without this defined, closed ecosystem, most innovators must rely on third party partners, channels, data streams and other capabilities to provide the aspects of a seamless experience. This means that innovators must 1) understand what the existing ecosystem can offer and 2) reach accommodations and  partnerships with third parties to create more seamless experiences.  Thus, innovation isn't just about a new widget, its also about understanding the role the widget plays in a consumer's life and how to make that role as seamless as possible.

Innovating in the new expectation

All of this explanation ultimately means that any one of these tools simply provides a narrow glimpse into what customers actually want - we need to use them all.  Further, we need to move quickly beyond the narrow focus of product innovation to experience innovation, because that's where customers are moving - if they aren't already there.  The shift in the use of tools and techniques isn't overly difficult.  What will be difficult is the shift in mindsets, as innovators recognize that products play only a small portion in the expected experience.  This will mean that product organizations and budgets may give way to experience organizations, where companies craft experiences that products must fit into, rather than the other way around, which is the norm today.
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posted by Jeffrey Phillips at 6:42 AM 0 comments

Monday, October 03, 2016

Automobiles demonstrate the path to seamless experience

In an earlier post on the Ecosystems 4 Innovating site I suggested that innovators must understand the expectations of customers.  As such that's not new or especially insightful.  Innovators are supposed to find new and unmet customer needs, and solve them for customers in ways that benefit the customer and create value for the innovator.

What's important about this idea is that innovators must begin to understand the maturity and expectations of their customers.  Henry Ford could offer an exceptionally basic black Model T Ford because there were no other options.  He was fulfilling the most basic sets of needs for his customer - efficient transportation.  When people didn't have cars, they didn't care much about the color or other features.  As other automobile manufacturers entered the market, they realized that the basic needs were met, and began to add features, colors, options and eventually a family of models and styles.  We can look back over 100 years ago and realize that customer expectations and needs morph as basic needs are satisfied.  Ford was overtaken by Billy Durant, who created a range of options and models.  Durant recognized that many consumers wanted more than basic transportation, so he solved those needs.

Over the years, automobile manufacturers created a wide range of different types of cars - convertibles, trucks, vans, SUVs, etc to meet the expanding needs of consumers.  Other factors became important - safety, as seat belts became an option, and then a requirement.  Or gas mileage, as the oil embargo of the 1970s forced customers to care about gas mileage. Or quality, as the Japanese manufacturers demonstrated a much higher quality vehicle in the 80s and 90s.  Today, we have very different expectations about our cars.  They are more customized to our needs, offer a wider range of choice and are more reliable, dependable and predictable than ever before.  What they don't yet do is meet expectations for seamless experiences.

As consumers move from basic product needs to elaborate product needs, they take another step up the needs hierarchy and shift from product needs to service and experience needs. GM, Ford and others are waking up to this now, and in fact have done some service and experience innovating before.  For years GM has made more money from financing and leasing cars than from building and selling cars.  Financing was one of the first and most logical steps the auto manufacturers addressed as the tangible products matured.  Strangely, they haven't gone much further.  Today we see the inklings of the next steps - lifetime maintenance, so the customer doesn't have to worry about servicing the vehicle. Why should a consumer care when the oil is changed?  Why don't the experts at the dealership do that for them? And we can go much further.

A truly seamless experience for a car owner would be to consolidate all of the aspects of car ownership, car financing, car maintenance, even car insurance, into one seamless experience. Why bother to shop for maintenance or insurance?  Why can't the dealers (or another firm) offer these features, along with roadside assistance?  What about parking for city dwellers?  A seamless experience would mean the car finds its own parking nearby.  Eventually, a seamless experience will be a car on demand, ready to take you to where you need to go.  Fractional ownership, billed by the mile or the hour, transportation as a service, with different vehicles available depending on your needs.

A truly seamless experience is increasingly what customers expect and what innovators need to strive for.  Providing a discrete product into a customer's life and asking them to integrate it with their other products and services simply frustrates the consumer, who expects more from product and service developers.  Apple and others have taught them the power of seamless experiences, and they've grown to expect the ability to "plug n play" anywhere and everywhere.  The companies that understand this desire and have the ability to "build, catalyze or join" ecosystems (to quote Stephen Elop) that provide these seamless experiences will be the winners.

Tesla could lead the way to this nirvana of seamless experiences.  Already they are changing the dynamic between company and owner, removing or at least attempting to remove the dealer.  As they experiment with autonomous vehicles one can imagine a day when your car picks you up, takes you to work and then goes for maintenance.  Or perhaps goes to serve someone else as part of fractional ownership, staying productive while you are at work, rather than parked and unused in the company parking garage.  Innovators who aren't tied to the past concepts of product-driven innovation, who understand the consumers' expectations for service and experience, will radically alter the nature of competition, and will do it by innovating services and experiences, leveraging ecosystems.
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posted by Jeffrey Phillips at 6:38 AM 0 comments