As a manager, you are always looking for ways to improve performance – for example, by making your products and services more attractive or by increasing internal efficiency. Many of the tools we discussed in previous chapters help you do this – they are ways of generating continuous improvements within an established framework. But sometimes you need or have an opportunity to move into uncharted territory – to innovate. This might mean creating a new product or service that hasn't been seen before, or it might mean trying out radically different ways of working.
This chapter introduces a range of tools that help you with creativity and innovation. For many managers, this is uncomfortable territory because, by definition, innovation means trying something new and accepting the risk that it may not work out. And there is often a feeling that innovation is someone else's job – the R&D department or the business development team.
Our view is that all managers can be creative and innovative and that they need to encourage people in their teams to be so as well. But we know this isn't easy. You need to develop strong social and political skills to sell your innovative ideas to others in the organization, a topic we address in Chapters 16 and 17. And you need frameworks and stimuli to help you think outside of the box – to come up with creative ideas that you can then explore in detail. That is what this chapter is all about.
The first two techniques we look at are about trying to see the world through the eyes of your customers rather than assuming you already know what they need. Design thinking (#44) is a very popular way of coming up with business ideas from a user's perspective and developing them through a process of rapid prototyping. Ethnography (#45) is a very specific technique, often used as part of design thinking, for tapping into the unarticulated needs of prospective customers.
In addition to gaining inspiration from customers, it is also useful to gain inspiration from the future, and that is where scenario planning (#46) comes in. We also suggest two other techniques – Doblin's 10 types of innovation (#47), which helps you think broadly about the different forms of innovation open to you, and brainstorming (#48), which is a tried-and-tested way of generating ideas around a particular theme through a group process.
Traditionally, many companies approach product development through technological innovation – they work on what is technically feasible in an R&D laboratory, and they get designers and marketers involved in the latter stages of the process to help make the product more visually appealing, or to position it in an attractive way.
Although this approach isn't wrong, it has significant limitations. It is very common for R&D people to work on technologically interesting problems, regardless of whether they have any value in the marketplace; this technology-centered approach often results in over-engineered or ill-conceived products. Famous examples include the Segway, Nokia's N-Gage, and the Apple Newton.
In today's competitive markets, a more thoughtful approach to innovation is required. Clearly, there are many industries where technological development is important, but more than that, it is vital to have a deep understanding of user needs.
In most business-to-consumer (B2C) markets, customers search out end-user ratings and product reviews online and use them to choose between the many options available to them. In these cases, underlying technologies are often relatively unimportant because many organizations can master them and integrate them well. What really matters is how the product meets a customer's practical and emotional needs. For this to happen, the development process needs to be driven by a deep understanding of customer needs right from the start.
This is where an approach called design thinking is useful. Pioneered as early as 1969, and more recently championed by the California design agency IDEO, the design thinking process can be simplified to the key steps shown in Figure 8.1.
The high-level steps in this process are:
Clearly, this is a longer, more time-consuming way of developing a new product than the traditional approach, but it is one that is much more likely to deliver a solution that customers love.
Find out more about design thinking here: | http://mnd.tools/44 |
The second step in design thinking (#44) is about understanding users' experience, and this is where ethnographic research is particularly useful. Rather than asking your customers what they think of your product, ethnographic research is about observing how they use it in order to pick up hints about how you might improve your offering. It is about tapping into unarticulated needs.
Ethnography started off as a branch of anthropology, focusing on studying people as they live their everyday lives. In recent decades, it has been used in business. Companies like Intel® have conducted ethnographic studies to understand long-term trends in the use and application of technology, whereas others like Procter & Gamble have used this method to understand people's day-to-day living habits. For example, the best-selling Swiffer, which uses a disposable cloth rather than a wet mop to clean floors, emerged from a lengthy ethnographic study of home-cleaning behavior.
There are a variety of ways that you can conduct ethnographic research to improve the way you serve customers. One is to shadow the consumers you're studying – watch how they behave, talk to them about what they're thinking, and learn from this. This can involve just watching them in a specific location, or it can even mean moving in with them for a short period of time to watch their lives and fully understand their thoughts and behaviors.
Other approaches involve incentivizing customers to track their experience of situations or brands with journals or smartphone apps. Or it could be getting them to conduct short “missions” you give them and record what they're thinking as they complete them. Meanwhile, there are many website plugins you can use to record how people interact with online services and many user testing services that allow paid testers to record their thoughts.
Ethnographic research can be prone to biases, such as customers thinking more about their decisions than they normally would or changing their behavior to please you. It is also very time-consuming, so you need to commit a significant amount of time and resources to get the best from this type of research. But as a way of gaining new insights into the unstated needs of your customers, it is well worth the effort.
Learn more about ethnographic research: | http://mnd.tools/45 |
Design thinking and ethnographic research are great techniques for innovating around the needs of users, as those needs exist today. A very different approach to innovation is to look at how the world is changing and to position your business accordingly. As ice hockey legend Wayne Gretzky said, “I don't skate to where the puck is – I skate to where the puck is going to be.”
How do you develop the right products and services for a fast-changing business world? This is where scenario planning, as shown in Figure 8.2, is useful. It is a method of thinking in a structured way about how the future might look so that you can create a small number of scenarios that reflect the most likely and significant outcomes. You can then design products and services that best fit these new circumstances. Use the following steps:
The opportunities for innovation exist in the final stage: You need to think about how these scenarios might affect demand for your products and services, or how entirely new offerings might emerge if these scenarios come to pass. Depending on what you come up with, you might need to do some additional research or development work to develop your ideas further.
Find out more about scenario analysis here, including seeing a worked example of the process in action: | http://mnd.tools/46 |
When we think about fostering creativity and innovation, it's very easy to focus on product or service innovation only – after all, this is what our customers see. However, organizations can innovate in all sorts of ways, and some of the less obvious forms of innovation are actually the most powerful.
The consulting group Doblin categorized these different types of innovation in its 2013 book Ten Types of Innovation: The Discipline of Building Breakthroughs. This list provides a handy way of thinking about the types of innovation that can help you build competitive advantage:
The value of this list is that it helps you to think more systematically about your options. Some of these approaches will be dead ends, but others may provide the spark of insight that helps you do something really creative.
Find out more about Doblin's 10 types of innovation here, including learning about tools that can help you with each one: | http://mnd.tools/47 |
Source: Adapted from Keeley et al. 2013.
So far, we've looked at large-scale approaches to innovation, and these have an important place in how organizations innovate. However, teams also innovate on a smaller scale, and much of this is done through brainstorming.
Managed well, brainstorming is a highly effective tool for generating and developing ideas as a team. It can deliver exciting ideas individuals are unlikely to come up with on their own, and at the same time, it helps the team bond and move forward with everyone feeling like they've played a part.
But when run poorly, brainstorming sessions are unhappy affairs that sow division and fail to achieve any worthwhile outputs. You need to set them up with care and manage them in a way that eliminates the problems that come with poor group dynamics (#37).
It is important to understand the difference between individual brainstorming and group brainstorming. Individuals brainstorming on their own often produce a wider range of ideas than groups, whereas groups often develop ideas in a richer way. You usually get the best results by combining the two. Here is a step-by-step guide:
Find out more about brainstorming here, along with learning about different types of brainstorming that can help you in specific situations: | http://mnd.tools/48-1 |
Learn how to use affinity diagrams to group information into common themes: | http://mnd.tools/48-2 |
There are two important innovation processes that didn't make the cut in our survey: The Stage-Gate® idea-to-launch process and Eric Ries's build-measure-learn process. It's important to know about these; you can find out more at http://mnd.tools/c8c.