WisconsInnovation

See the January 2009 edition of the journal Nature for a story on a "distributed, volunteer science" project which has been ongoing since 1900.

The Wisconsin State Journal recently published an article titled, "At the University of Wisconsin-Madison, Cooperation Equals Graduation." Using Professor Deborah Mitchell's Consumer Behavior course and attendant "Project MBA" as an example, the article discussed the widespread use of teams as an educational tool at the University.

As MBA students in the Wisconsin School of Business, we are extremely accustomed to teamwork, being assigned or forming our own teams in nearly every course in the program. What occurred to me in reading this article, however, was the role teams play in the creation of our educational experiences. While we all sit in the same classroom, participate in the same course discussions, and study the same course materials, we each arrive at the end of the semester with different educational experiences by virtue of the teamwork components of our classes. In other words, teams are truly a form of educational co-creation.

According to the article, "some instructors believe the group activities can push all students to achieve at a higher level than they would in traditional college courses emphasizing individual performance." Teamwork as a form of co-creation can lead to enriched educational outcomes, forcing students to learn from each others' real-world experiences and providing a platform for instant feedback - the type of collaboration that will be expected of us in our jobs after graduation.

As we have learned, co-creation can be a powerful tool in new product development. In a very real way, our education is a product that is deeply affected by the co-creation occurring from teamwork. While we do not often think of our teams as a form of innovation, surely my educational experience has been shaped by the people with whom I've worked during the course of my MBA program. Each team has taught me something different, and my education will be the result, at least in part, of the individual experiences I have had with my different team projects.

Extending the theory of teamwork as a form of co-creation in new product development (our education), two points emerge. First, if our "education" product is the result of teamwork co-creation, perhaps there should be an increased focus on selecting different teams for each project. The MBA program dictates our "core" course teams during our first year with a new team each semester. These same teams are required, however, for each course. Perhaps by switching up the composition of the teams more frequently, we could expand our learning and achieve more diverse educational experiences. The same is true in the second year of the program where we are free to select our own teams. Frequently, and I am no exception, we stick with the familiarity of the team mates with whom we are comfortable. Perhaps, however, we might achieve a more diverse experience by associating with different teams for each project.

Second, it seems clear that the more tools and resources we have to work with our teams, the easier it will be to utilize this form of co-creation. Differing schedules and work preferences often make teamwork difficult. The School of Nursing, however, will soon utilize an online platform allowing team members to post work on a course Web site and will provide a portal allowing all students to co-create a final report analyzing a medical problem. These new tools would be a great addition to the School of Business, enhancing the ways in which we use teams and collaborate as students to solve problems and learn new ideas.

There are many things that are part of growing older that I am not looking forward to including the possibility of wearing Depends. However, I am encouraged by KC's recent investment into the product. For the first time in Depend's 25-year history, KC will finally offer a separate product for men and women.

I am surprised that this innovation did not occur years ago, given that men and women are shaped differently and have different leakage needs (yikes!). But, with the aging baby boomer generation, the time to invest couldn't be better. You should feel comfortable recommending these incontinence products to those in need - with this upcoming change, the product will offer 28% better leakage protection.

I am left wondering why KC didn't think of this sooner. 25% improved performance is significant. And now, couples shopping together will have to buy two bags of Depends. This change should improve sales. Way to go KC!

If you haven't already, check out the New York Times 8th Annual Year in Ideas magazine. Though some of the entries describe social experiments or academic research findings, a few detail user-generated innovations, for example inflatable airbags to break falls sustained by the elderly, the leading cause of death for people over the age of 65 or spray-on condoms for the man who just can't find that right fit.

These ideas made me think about an issue not discussed in class - the economic viability of an innovation and how to market it. While most likely not an issue for most of us, individual resources and the market severely limit the number of innovations we see. So while we have a tendency to believe innovations are incremental and do not fulfill consumer needs, the innovations we actually see represent of fraction of what exists. For all we know, there is something out there that satisfies our unmet demand. We just don't know about it.

Many of us may have heard or read the book ‘Seven Habits of Highly Effective People’, but you may not know ‘Seven Habits of Highly Innovative People’. No, it’s not created by me. I hope so though. At the very end of this semester and inspired by the ideas shared in the class and here, I had the question: “Is innovation a talent or a habit?” I don’t think myself as a very creative person. Yet I am interested in getting more innovative thoughts. Being innovative, or creative, is always a desirable trait in personal life or future job, isn’t it? So I found this article on habits of highly innovative people:

It’s quite encouraging for me as I went through the list:

1. Persistence – Obviously this is my strength. I can run 5 miles or have a long whole-day hiking!
2. Remove Self-Limiting Inhibitions - Think out of the box and be open to new ideas and solutions without setting limiting beliefs. I can do this better in the future.
3. Take Risks, Make Mistakes – Yes, I need to take more risks. ‘Rather than treating the mistakes as failures, think of them as experiments.’
4. Escape – ‘Ideas sometimes come to us in the shower or while we’re alone’. I agree with this especially because most of the day my head is full of things to do but I don’t really spend enough time thinking about doing something fun and differently.
5. Writing Things Down – That’s why I have this post finally!
6. Find Patterns & Create Combinations – I think this is what we did in the past several months from the class.’ Ideas come from other ideas.’ I did get some ideas from those interesting innovations presented by our classmates. Thanks a lot to you all.
7. Curiosity – This is a very important attribute of a marketer or marketing researcher, I believe.

‘Innovation is more about psychology than intellect.’ Hope you like this idea too.

Marketing researchers are dedicated to clustering consumers and finding large groups of people with homogeneous demand. Find a need and fill it. If enough people are willing to buy the product, everyone is happy. However, this methodology misses the lead users who, according to von Hippel, are frequently the developers of real breakthrough products.

I recently had to trek over to the dreaded Sprint store because my Motorola Q decided to stop functioning. After I had selected my newest distraction, the Samsung Instinct aka Bush League I-phone, the surprisingly helpful sales associate did a cursory review of my account.

I find it incredible that the innovation of text messaging has completely altered the way that I communicate with the outside world. The only person I still chat with on the phone is my Mom, and that’s because she’s a laggard and hasn’t discovered texting yet.

Last week I read an article on the web about the communication revolution and its effects on personal relationships. The author suggested that the increased use of e-mailing and texting instead of speaking in person or on the phone would have a severely detrimental effect on peoples’ relationships with others.

This does not bode well for my future.

Recently, a classmate turned me on to an addicting website called Sporcle.com. If you choose to check it out, I'll apologize right now for wasting - most likely - countless hours of your time.
In class today, I was giving further thought to the idea of creation without monetary aspects, and I couldn't help but thinking of this site. To me, it's almost like a Wikipedia line extension. Like Wikipedia, all the content is created by users, and while the checks on accuracy might not be quite as strict, I've found it to be a very accurate site. Ultimately, I just thought it was yet another interesting example of people co-creating for their own personal reasons; maybe it's to be recognized as the creator, maybe it's to increase content on the page, maybe it's something else entirely. At the end of the day, whatever the reasons for creating, it's an addicting site.
Countries of the World anyone?

Although it's been around for a few years, the last six months has shown frenetic growth for an emerging social media platform known as Twitter. And it's a platform that has tremendous potential to help marketers better understand and interact with their customers -- leading to improvements in new product development and innovation.

Many may be skeptical of this claim. In fact, you may not have even heard of Twitter before, but if you question whether it is becoming mainstream, consider that the Wall Street Journal has published no less than 30 (as of this posting) different articles mentioning Twitter since September of this year -- including an October piece that headlined, "Twitter Goes Mainstream." A pretty bold statement.


What is Twitter?

Katherine Boehret wrote a "Mossberg Solution" column in the Wall Street Journal explaining the service: "In short, Twitter is a free social-networking tool that keeps people connected with one another and with sources of information. Twitter users submit updates about whatever they're currently doing, and these updates cannot exceed 140 text-based characters."

Some refer to it as 'micro blogging.' Basically, you write updates on what you're doing, thinking about, seeing, etc., in real time, and the sum total of these items is your Twitter stream (your micro blog). People then choose to Follow your stream, and vice versa, much as you would via the RSS stream on a blog. It's very stream of consciousness, which from a marketing research standpoint is very intriguing.


How can it can it help improve customer insights?

Twitter has tremendous potential for garnering customer insights, and in fact many businesses, including Comcast and Ford are already engaging in Twitter-moderated interactions with current and potential customers.

Some normative examples include:

• Ethnographic observation of Lead Users,
• Customer sentiment tracking and
• Live, real-time interactive focus groups.

There also have been some great recent articles and blog postings on this topic -- pointing to using Twitter for engaging with customers.

> Observing behaviors and actions: Chris Wilson, who writes The Marketing Fresh Peel blog, posted a recent presentation in which he focused on how businesses can use Twitter for customer insights. "I stressed the importance of understanding people’s behaviors and actions," he notes on his blog, "because no matter what happens to Twitter years down the road, behaviors will be the same."

> Making dialogue two way; not getting caught up in the medium: On my own Propelling Brands blog I posted a response to a blog post by Tony Hung on the Conversation Agent Blog in which he commented on the role of Twitter in brand management. He points out that the key is to facilitate what is a two-way dialogue with customers, and he argues that brands using Twitter should "really listen to customers, show your commitment to participating in direct dialogue and identify and interact with true thought leaders." My additional thoughts, which I posted in my response, were that, "[t]he issue is that too often the medium becomes the message and as marketers we forget the role each channel plays in the ongoing dialogue between brands and customers. Also, all too often, we treat these mediums as a chance to shout at customers but never to really communicate with them."

The key to using Twitter for garnering customer insights is to keep in mind that it's just another tool in our arsenal. As marketers and marketing researchers we should have an objective in mind, first, and then assess whether Twitter is the right venue for communicating with our channel.

But this is the case for any social media technology. I presented on this topic last week, together with some other colleagues at the Wisconsin School of Business. We looked at the role of social media in new product development innovation, including providing points on how to assess whether any given platform is the right fit for the type of insight you wish to garner. You can check out the presentation on SlideShare here.


How can you begin using Twitter?

Set up an account, follow other's Twitter feeds and give it a try!

In a recent article (full text found at http://blogs.zdnet.com/storage/?p=370) Ron Harris, of ZDNet.com, writes about Microsoft, referencing a very honest interview done recently by Microsoft's Chief Software Architect, Ray Ozzie (for those who are wondering, a guy named Bill Gates used to hold the same title).
In the article, Mr. Ozzie is actually quite critical of Microsoft, stating that their path to innovation in the past has been to demonize their competitors and define themselves in opposition to said competitors. By simply drawing a line in the sand, Harris argues that Microsoft fails to think about what they're doing. His argument: Microsoft is not, in fact, a particularly great innovator. Instead, they've bought products over the years and tweaked them. I'd agree that this is less innovation than understanding where to put your money. And is that such a bad thing?
What Microsoft does well is what they need to leverage moving forward. Mr. Harris seems to agree, stating that what Microsoft needs isn't revolution, but profitable evolution.
Ultimately, it's an interesting take on a company that many people - especially those with only a skin deep understanding of the industry - will cite as a truly innovative firm. I tend to agree with the assessment, and it sounds like some of Microsoft's recent misses have finally gotten them to take notice as well.

I'm a late adopter for most technology and therefore, I do not have an iPhone or Blackberry. I am thinking about getting the G1 phone but I'm worried if I have access to the internet 24/7 I might get really addicted to it and every time I get an email I will be looking at my phone. I can also imagine my blood pressure will rise. Anyway, I hear there are these things called "apps" for iPhone. Here is a new one called Real Tree. See the original article for more info:

http://www.goodcleantech.com/2008/12/iphone_app_plants_a_real_tree.php

Basically you purchase a "tree" for 99 cents and then you get a tree on your iPhone. The money goes towards education people about reforestation efforts across the globe. The tree on your phone can grow flowers or even have the wind go threw it.

I personally do not find any use for this but maybe others will like this relatively lazy and cheap way of being involved with the environment? We will have to see how it does.

In the December 3, 2008 issue of Businessweek.com, there is an article about packaging innovation from McDonald's. The article explains that McDonald's is attempting to create personalities for each of their products, and provide consumers with visual cues that remind them that McDonald's products are made from "real food." The full article can be seen here:

http://www.businessweek.com/innovate/

While I applaud McDonald's for striving to find solutions to make their packaging more environmentally-friendly, it seems as though this re-design is just change for the sake of change. In addition to rolling-out the new packaging to update the McDonald's brand and product line, "McDonald's is also trying to stay ahead of concerns over obesity" (Businessweek.com, 12/03/08). The McDonald's team believes this concept will satiate a global appetite for greater information about food products, though I'm not convinced this is a need-based driven innovation. Certainly, as US consumers are faced with a difficult economic environment, McDonald's might have been better off spending time on innovation in the area of promotions instead of refreshing the look and packaging of their products. Or, perhaps McDonald's could allocate some of its resources to addressing the nutritional composition of its products.

At a time when the executives from the Big Three are flying to Washington, DC to grovel for tens of billions of dollars to keep their floundering businesses afloat, a small auto manufacturer in Northern California is doing things a bit differently. Tesla Motors, the nation's leading all-electric car company, manufactures zero-emission luxury sedans in the heart of Silicon Valley.

Let's turn back the clock to Summer, 2004, Kansas City MO/KS. Voters were determining whether or not to levy an arena tax on the rental car and hotel industries to finance the proposed Sprint Center, an arena designed to revitalize the downtown area and potentially entice a professional basketball or hockey team to relocate to Kansas City. Standing in opposition to this arena tax was the newly-formed Coalition Against Arena Taxes. Points for creativity on the name.
The Coalition Against Arena Taxes consisted of around 30 members from different local businesses including one rental car agency that we will refer to as Every-prize Rent a Car (as well as a few other rental agencies). Every-prize's argument against the arena tax centered on their concern regarding the disproportionate increase in expenses - in some cases up to a 40% - on their local renter. Their goal was to have the arena tax limited to airport location and to be decreased from a $4/day tax to a $2/day tax of which Every-prize shared common ground with their competitors. Other CAAT members voiced their concern over the potential for a trickle down tax on their businesses should the financing partners either pull out of the non-binding agreement or should total funding be insufficient.
While an alliance was created between Every-prize and a few of its rental car competitors aligning their mutual concern over such a significant tax imposition, when the debate grew more heated in the last few weeks, it was Every-prise alone that received the negative backlash from the powers that be in Kansas City. The news media spun the Coalition's objections as an attempt from Every-prize, a St Louis based company, to stifle the attempts of Kansas City to gain a professional sporting team in the hopes that such a team would prefer St Louis. While an absurd claim, it succeeded by reinforcing the Napoleonic complex and biases of the Kansas City citizens against St Louis. Apparently winning the 1985 World Series over the Cardinals was insufficient.
While Every-prize was tacking a lashing in the news and through boycotts and picketing, their "allies" determined that the best way to handle the situation was to avoid the spotlight and let Every-prize take the heat. We have discussed the benefit of alliances in a few courses now, including NPD, and I thought it important to mention that whether vertical or horizontal alliances are created between two competing companies over a mutual desire to launch a new product or to protect themselves from an industry-wide occurrence, beware of those with whom you ally.

Recently, I learned about Playing For Change:Peace Through Music. PBS presented a documentary about this new innovation led by Mark Johnson on the Bill Moyers Journal. The innovative product is music that has been co-created by musicians across the globe. The driving force of the film is to find a way to inspire the planet to come together as a human race through the universal language of music. Johnson and his team want to focus on our connections rather than all of our differences. They believe music can break down the walls and barriers between cultures, and raise the level of human understanding and connection.

The project took three years to complete. As the team traveled around the world, the idea was to get as many different cultures and races to sing songs together to inspire the world to come together through music. Roger Ridley, a street musician in Santa Monica, CA, caught the attention of Mark Johnson. Ridley's voice intrigued Johnson to the point that he asked him for permission to come back with recording equipment to video tape and record him as he sang "Stand By Me." Ridley agreed.

The co-creation happened as each musician added to the song "Stand By Me" without meeting any of the other musicians. First, Johnson recorded Roger. Next, he went to a Native American Zuni reservation, put headphones on the natives, let them listen to Roger sing and play the guitar, and then they sang and played the drums over Roger's recording. Afterwards, he went to South Africa and put headphones on a Zulu choir situated on a mountain top, they listened to the new version of "Stand By Me," and they played on top of it. This continued across the globe. Johnson's final product ended up featuring approximately thirty-seven musicians who never met, all playing "Stand By Me" together, live, outside, and around the world. He and his team use the music to inspire the planet, and have created a foundation to build music schools in some of the communties of the participating musicians. Visit www.playingforchange.com/pop.html for more information and to watch the video. Once on the website, click "enter," then "click to play

In an age when video games are differentiated by specifics such as HD graphic resolution, Sony sought to take a step backwards and develop a product with broad enough appeal to attract as many consumers as possible. This challenge, however, did not rely on piecing together the ultimate gamer market segmentation report. Rather, Sony needed to create an approach that did this groundwork for them, fast. The Wii gamer segment, where users are personalizing their machines and game profiles to interact with an online community, is growing steadily and, most recently, out-sold Sony's PS3 over 4 to 1 (http://www.1up.com/do/newsStory?cId=3171305). Further, video game production costs, 3 years ago, ranged between $3 million and $6 million (http://news.bbc.co.uk/1/hi/technology/4442346.stm). Estimates today place costs upwards of $20 million. New video games, thus, need relatively strong ROI.

So, then, how might Sony safely reach as many customers as possible? Meet LittleBigPlanet. LBP is a world where gamers guide 'Sack puppets' through any challenges made available to them. These 'Sack people' range from being entirely new to resembling characters from various other popular games. And, of course, they can be customized.

But Sony did not stop at this simple functionality, which is found in a majority of today's games. LBP is a semi-open game platform in the form of a developer's kit. Players can build their own worlds quickly, customized however they please. These worlds can then be shared online amongst the PS3 LBP community. Appropriately, LittleBigWorkshop's catch phrase is Play. Create. Share.

While there were 50 pre-built levels included with the game, Sony looks to the community of LBP gamers to create worlds of play applicable to their demographic or something to which their segment is emotionally tied. For example, there is an up-cropping of worlds resembling the early Mario Brothers games. This externalization of NPD (albeit partial because gamers do not truly create an entirely new product) is apparently a fun process for the user and results in a products personalized to a broad spectrum of segments. This is not the first game to provide this capability; level building dates back to at least 1991 in a game by Epic called ZZT (http://blog.wired.com/games/2008/10/first-impressio.html). However, this does represent a shift towards NPD via social media, where gamers add value to their own community through co-creation. The result thus far, though muddled by the current recession, is reasonably good. After its launch completed early this November, LBP's sales placed it in the top 10 titles for October with only a few day's worth of availabilty accounting for that ranking (http://www.1up.com/do/newsStory?cId=3171305).

Another interesting and, perhaps, more poignant insight is that this same approach and capability, including all the community communication elements, were available for PC games decades ago. Sony's LBP model is hardly a new concept for innovation. Yet, perhaps users were not yet conditioned to develop and share as readily as they are today.

Another Example of Co-Creation

I thought I would give you all a sneak peek at my latest innovation. Ellery Lynne Lincoln is now 33 weeks and still in the research and development phase. We have an expected launch date of 1/22/09. In this particular case we are not only the innovators but also the consumer, so to speak. Although, with those cheeks, it might be debated who is doing the consuming!

“Innovation is something truly different in the market that makes your customers’ lives better.”—Herb Baum, CEO Dial

We anticipate that this innovation will follow some of the basic innovation guidelines:

• Something new and valuable
• Alter the way we live
• Deliver benefits/solve problems

This innovation is important because our "firm" has a focus on innovation as a means for growth.

On the Product-Market Matrix she would be a market development: existing product (baby) for a new market (Daniel and me).

Daniel Lincoln and I have formed a NPD Alliance to produce Elle. “A formalized collaborative arrangement among two or more organizations to jointly acquire and utilize information and know-how related to the R&D of new product innovations.” (Aric Rindfleisch lecture slides)

Although we are aware that most new products fail, we are hoping to mitigate this statistic by addressing the following criteria:
•Most failures seem to be due to poor sensing rather than bad solutions.

We feel we have the pulse of the consumer and are sensing the right time for launch

•Other key problems include risk aversion and slow development times.

Through thorough research we have determined that the levels of risk aversion are at an all-time low and we are positioned to offer a product that falls well within the risk criteria of the target segment. Although the development time appears to be on pace with industry average (40 weeks), the risks associated with expedited development do not appear to offset any rewards.

However, we are also aware that failures may not always be bad. We are focussed on learning from our mistakes and using them to continue to innovate with Elle.

The concept is not new, and many have struggled to market similar solutions in the past, including Rocket Network and ProTools. Most competitors focus on live collaboration (jamming) or remixing, while Indaba seeks to improve traditional, asynchronous multitrack recording. Indaba has taken the lead among pro and semi-professional musicians by combining social networking with a web application that allows users to mix and edit audio in their browsers.

There are currently over 75,000 registered users from 150 countries, including many talented session musicians. Indaba encourages participation through frequent contests and crowd-sourcing in partnership with indie bands and labels. If it continues to grow in membership and quality, Indaba has the potential to compete with traditional record labels through its cooperative, grass roots approach to creating music.

I was conducting research on the topic of Internet marketing in the era of Web 2.0, and I ran across some interesting data points. In the early years of Web growth, ad-supported news content and consumer e-mail were the two greatest drivers of the top global Web sites such as Yahoo!. But trends such as social networking and blogging have changed this dynamic.

Two data points speak to how much this has changed -- especially with respect to how much customer co-creation is driving the future of the Web:

> Growth among traditional, ad-driven news sites is flat: "[O]nline news audience growth is flat and the market is highly fragmented, with nearly one-half of traffic going to sites that are below the top 100 news sites," according to a press release from technology industry analyst firm Jupiter Research from March of this year. And this is even as the number of Web sites globally continues to grow at a rediculous pace.

> Participation dominates the top global Web sites: Among the top 10 Web sites globally, according to Internet site tracking service Alexa, 5 out of those 10 are now based on user-generated content -- i.e., they are social media, social networking or user-contributed media sites. The list includes: YouTube (3), Facebook (5), MySpace (7), Wikipedia (8) and Blogger.com (9).

Do you have any examples of acceleration of this paradigm shift? If so, please share them.

I may be the first 27 year old to admit this, but I love Huggies Cleanteam line of products, specifically Henry the Hippo Hand Soap (though I thought he was a dinosaur). While foaming hand soap may not be a new innovation, Kimberly Clark (producer of Huggies) has innovated the packaging to different its product. Targeted at kids, the soap dispenser (Henry the Hippo’s head) will blink for 20 seconds to remind kids just how long they need to wash their hands. This new packaging innovation meets parents’ need to (1) get their kids to wash their hands more often to prevent the spread of germs and (2) teach their kids good hand washing habits.


All too often, we only think of innovation in terms of new products. Clearly, Innovation can take many forms, including packaging, marketing, pricing, and distribution.


Here’s a big thanks to the KC recruiting team, for sending us all a bottle of Henry the Hippo Foaming Hand Soap!

As the whole world faces the challenges of an economic recession, firms performance is heavily scrutinized as there is a huge pressure to show positive results. As a result from this pressure, firms are forced to try find ways to cut costs and improve margins given the smaller market they have to compete for. But it is during this difficul times that firms need to think very carefully before cutting down on their investment in product development. This is the time when consumers demand more from the brands they buy and are not willing to splurge on products or services that do not add significant value, however this is manifested. Therefore, an opportunity for new products or brands is created as consumers more than ever are willing to change their behavior and try new options in order to adjust to the economic difficulties.

It is not a new idea to say that when the economic outlook is complicated marketing efforts are more necessary in order to remain competitive. Innovation and product development are not indifferent to this idea. To illustrate this better, just look for a moment at the differences between the developed countries with the rest of struggling economies. Most of the underdeveloped countries justify the lack of investment in research and technology on the fact that there are more immediate needs to satisfy and allocating funds to R&D would be considered a luxury. This mindset creates a never ending loop in which the economy never generates additional sources of income and in consequence, will never overcome its underdeveloped state.

As consumers are more protective of every dollar they spend, firms must provide them products and services that go beyond the mere elemental proposition. Instead they will opt for brands that offer significant additional value, making their lives easier, helping them go through the difficult time. New products that can deliver on this promise will attract consumers’ attention and adoption while creating strong relationships that will far outlive the recessive period.

Hi Everyone!

I received some follow up questions from the presentation I gave at last Friday's Center for Brand and Product Management Fall Board meeting. Here is a bit more background on the research that I have done on Consumer Co-Creation for Innovation.

Consumers' Expectation are Changing: Across all industries, consumers expect to be a part of the Innovation process. Yet, for the most part, their only option is limited personalization of existing goods. Consumers don't just buy a bear, they Build-A-Bear. Consumers personalize their running shoes and customize their M&Ms.

Companies Need to Change Their Approach Towards Innovation: Companies currently practice what I call Innovation Validation, which means they ask consumers to provide feedback on a select group of options that the company developed (ex: they ask a focus group to rank new product concepts). If companies want to truly engage consumers in co-creation, they need to adopt a philosophical shift and move towards Uninhibited Innovation. This is where companies ask consumers to tell them what it is that they want (ex: give the consumers a blank sheet of paper).

Communities Vary In Their Level Of Consumer Involvement In Innovation: Not all Online Communities are created equal in terms of their ability to involve consumers in the Innovation process. Some are more geared towards co-creation than others. Below is a Spectrum of Community Involvement for Innovation as well as the definitions of the different buckets I have created.

Repository – Brand provides information for consumers to obtain. Brand does not openly solicit feedback.
• Iams provides consumers with information on products, nutrition, and pet care.

Suggestion Box – Brand provides opportunity for consumers to submit ideas. Consumers receive little follow up.
• Mystarbucksidea.com allows consumers to post, vote, and discuss ideas.

Source of Empowerment – Consumers act as an extension (and on behalf ) of the brand to educate / influence other consumers.
• Virgin Mobile leverages its Insiders group to educate other consumers on the brand, promote local venues, and provide feedback back to the brand.

Vested Panel – A consistent group of consumers primarily used as a standing focus group to contribute and react to ideas.
• Kraft’s online community provided insights on product development, advertising, and in-store execution for the South Beach Diet product line.

Launch Pad – Consumers participate in a major function of the brand (design, advertising). The brand would not exist without consumers and consumers’ ideas would not come to fruition without the brand.
• Threadless empowers consumers to upload and vote for their favorite t-shirt designs. Winning designs are mass produced and sold.

This spectrum bucketed communities based on three criteria:

• Communication Flow
• The Brand's Relationship with the Consumer
• Consumer Activities

This criteria is fluid and works together to increase Community Involvement in the Innovation process.

Communities Can Be Strategically Incorporated Into the Entire Innovation Process: When developed and managed correctly, communities can be leveraged for Ideation, Product Development, Positioning, Packaging, Advertising, In-store Execution, and Feedback.

Not For Everyone: Some industries will struggle to implement Uninhibited Innovation, while still managing consumer expectations. For example, the food industry requires different manufacturing lines to develop different product offerings. Because capital investment is high, a company may not be willing to invest in new machinery for potentially small batch sizes. In order to manage consumer expectations, food manufactures would need to limit the scope of Uninhibited Innovation to things that would require little additional investment.
This can ultimately lead the manufacture to invite consumers to develop the next line of energy drink, but put so many constraints on it, that they essentially only allow the consumer to come up with the next flavor.

Thoughts? This is still pretty new. Most of the research suggests that consumer online communities can only be leveraged in the digital industry. While it is much easier for these companies, it is possible for other industries to successfully implement and leverage these communities. Kraft leveraged their online community with the introduction of the the South Beach Diet product line. As a result, sales reached $100 Million in just the first 6 months of launch.

With the world focused on the the Dow index as the US economy is in turmoil, the S&P/BusinessWeek Global Innovation Index provides an interesting look at how 25 of the most innovative public companies around the globe are performing. The Global Innovation Index is a new measure (created Feb 2008) of how innovation is proving to be an important factor for successful companies.

The Companies
The companies included in the index are based on BusinessWeek's Most Innovative Companies rankings. The list is created with a number of sources. "Each company's weight in the index is derived from a combination of two rankings. The first is a qualitative ranking based on the company's position in the annual BusinessWeek/BCG survey. The second is a quantitative ranking based on three factors used to estimate a company's innovation—three-year earnings growth; three-year sales growth, and R&D as a percentage of sales. A composite score is calculated for each company by adding the qualitative and quantitative scores. For details, go to www.indices.standardandpoors.com. "1

37 percent of the companies are in the tech industry and the 25 companies represent five countries.2

The index will be rebalanced each May after the Most Innovative Companies ranking is published in BusinessWeek.

Performance
"Historical data show that the S&P/BusinessWeek Global Innovation Index companies outperformed S&P Global 100 Index companies by more than 7% in 2007 and have done 5% better since the middle of 2005." 3 In 2007 the Innovation index outperformed the S&P Global 100 Index by 7%.

I tried to look up how the idex was currently performing, but I was not able to locate the ticker on Bloomberg or the S&P Website.

Pitfalls
One potential problem of this scale is that the companies included are only evaluated every year. A company's strategy and innovation pipeline can change dramatically in a year. What was once an innovative company, can grow stale or have a couple of dud launches.

Another potential challenge is with defining what qualifies companies and "innovative." The index is somewhat subjective as there is a qualitative aspect in determining which companies are included. In addition, a new innovative start up will not have three years worth of history outlined in the index definition.

1 "A New Innovation Index - The S&P/BusinessWeek Global Innovation Index"; BusinessWeek; Feb 2008; http://www.businessweek.com/innovate/NussbaumOnDesign/archives/2008/02/a_new_innovatio.html
2 "S&P/BusinessWeek Global Innovation Index"; Standard Poor.com; 2007
http://www2.standardandpoors.com/spf/pdf/index/Tickers_ETF_chart.pdf
3"S&P/BusinessWeek Global Innovation Index"; BusinessWeek; May 1, 2008; http://www.businessweek.com/innovate/content/feb2008/id2008027_367300.htm

I was doing research on the state of mobile marketing -- exploring recent developments in the medium, especially from a mobile-Internet perspective -- when I ran across some startling data.

We're currently in the era of the iPhone -- a device many consider to be cutting-edge innovation. It certainly has bells and whistles. And the ability of the device to view and interact with rich media -- upside-down/inside-out/etc. -- is amazing.

Yet SMS and voice reign king in the mobile world:

> 80% of mobile operator revenues comes from voice services, according to industry analyst group Yankee Group in an article in Telephony magazine.

> Mobile text campaigns regularly get 10X better return than those using rich media, according to the CEO of Limbo in a BrandWeek article.

> An iPhone user is 70% more likely to use SMS, according to Nielsen Mobile in the same BrandWeek article.

How to reconcile this insight? Apple has innovated the iPhone interface in ways that are pretty impressive when you see them demonstrated. But good old-fashioned text-based messaging and phone conversations still dominate. Really.

What are thoughts on this? And what insights does this provide in the emerging iPhone vs. BlackBerry contest?

Earlier this week John Rotheray posted an entry about stealth development and the increasing importance of keeping technology secrets from the competition. This increased focus on secretive innovation extends beyond keeping rivals in the dark. In some instances, companies even want their innovations to remain invisible to the consumer.

In a NY Times article Miguel Helft weaves a cautionary tale concerning website improvements. In 2006, AOL made significant changes to Netscape; a year later half of base users had abandoned the site. To modify a page slightly and confuse even a small percentage of users puts valuable web traffic numbers at risk. On the other extreme is eBay, which spent a month transforming the homepage’s background from grey to white. Currently Yahoo has undertaken a website overhaul to improve functionality for the user; it plans to roll out the changes gradually over time; the final version will bear little resemblance to the current version.

What does all of this mean for innovation? How innovative is a product if we have to secretly train users how it works? We are creatures of habit. We must perceive a clear benefit before we will invest time in modifying our behaviors to adapt to a new website or product offering. Perhaps then the role of consumer research is even more vital to product development; a better understanding of consumer needs can lead to better innovation. Ultimately as corporations we should make it our job to ensure that our innovations are intuitive and easily accepted by the end user. In most instances, a focus on good innovation will alleviate the need to sneak our changes past the consumer.

It’s an unwritten rule that new product development gets more secretive as the stakes go up. Some of the most discontinuous innovations are driven by an invitation-only society representing some of the world's most famous, brilliant and powerful people. Currently the players in this game are partnering with the world’s most respected venture capitalists(VC) to tackle a six trillion dollar industry…energy.

The premise of the game is clear. The roar of an energy revolution will make the 90’s period of economic expansion sound like a kitty’s meow. In the end, new energy sources and storage technology will result in an unprecedented global transfer of wealth and power. Jon Gertner's recent NY Times Magazine article describes the emerging trend.

“Last summer, the growing number of stealth companies involved with clean energy formed a kind of dark matter in the Silicon Valley universe, businesses that could not be seen yet nevertheless exerted a discernible gravitational pull. Executives would suddenly leave jobs at established companies to join ventures with no official name. Manufacturing facilities would set up shop in cheap, anonymous buildings in towns like Santa Clara, Calif., then begin round-the-clock operations.”

EESTOR is a company based in Cedar Pak, TX that fits the mold of keeping a low profile. EESTOR has no web site, yet is funded by the VC Kleiner Perkins Caufield & Byers (KBCP), renowned for their early investments in Google, Intel, Amazon, AOL, Sun, Genentech and Intuit to name a few. EESTOR is developing a new generation of supercapacitor energy storage units designed to replace gas and chemical batteries as the world’s most prevalent storage medium.

All signals, such as publicly announced contracts with Lockheed Martin point towards a world changing discovery to be announced soon. However you may never hear about EESTOR again if it suffers the fate of the majority of KBCP's investments. That's just how the whales play the game. Dream big or go home.

Follow breaking news at The EESTORY blog here.

I will be the first to admit, home cleaning is not sexy. However, I spent my summer working in home cleaning, specifically working on Pledge Furniture Polish. While maybe not the sexiest product category to work in, home cleaning is at a pivotal stage in new product innovation.

What is innovation and what is the purpose behind innovation? Innovation by itself would be of no meaning to anyone if it did not provide solutions; solutions to any current day problem that we are facing. And if there is a new way of fulfilling a basic necessity of billions of people around the world that is cheaper, easier and greener than any other way then what else do we need to talk about? And even if the new way has been around for a few years in some part of the world I think it is still relevant to talk about it here because I know that almost all the audience in this blog do not have an inkling about what SODIS is?

Let me start this by writing about a very important topic. Death. One of the leading causes of death in developing countries is contaminated water. Water borne disease such as diarrheal disease (one of the common ones) is responsible for the deaths of more than 1.8 million people every year. It also kills 12,000 children in Nepal every year ;-( . And the sad thing is that the number of deaths around the world can be easily reduced by making the water safer to drink.

Solar water disinfection (SODIS) is one of the alternate methods of making drinking water safe. Unlike costly methods that use fossil fuels or wood to boil water this method is really cheap and even the poorest people in the world can get access to safe drinking water with this method. All you need to get safer water with SODIS is sunlight and a transparent polyethylene bottle. In this method water is kept in the bottle and left in the sunlight for around 5 hours.

Three effects of solar radiation are believed to contribute to the inactivation of bacterial organisms of the water. UV-A, interferes directly with the metabolism and destroys cell structures of bacteria. UV-A (wavelength 320-400nm) reacts with oxygen dissolved in the water and produces highly reactive forms of oxygen (oxygen free radicals and hydrogen peroxides), that are believed to also damage pathogens. Infrared radiation heats the water and if the water temperatures rises above 50°C, the disinfection process is three times faster.

SODIS method was developed after extensive laboratory and field tests by Eawag (The Swiss Federal Institute of Aquatic Science and Technology) and Sandec (Eawag's Department of Water and Sanitation in Developing Countries) in the 1990’s. Due to this new technique in making water safer it has been really popular in developing countries. Its effectiveness means that even the World Health Organization recommends it as a viable method for household water treatment and safe storage. Research studies have found that effective usage of SODIS helps reduce instances of diarrhea by up to 80%.

Some of the few things to keep in mind to use this method is that the water should be kept in the sunlight for around 5 hrs or more depending upon how bright the sun is, the water bottles should be changed from time to time (because it may get scratched or wear out), the water bottle used should not be more than a 2 liter bottle for maximum effect.

So what are we waiting for? Let’s get clean and green (:-)) water.

Nice article on best practices within innovation. Essentially, we've spent almost $5 trillion on R&D and higher education, the key contributors to innovation. Yet we don't know what has worked and what hasn't.

Innovation economics aims to solve this question. Economists are studying what are the best practices in innovation and how companies can use this information to become more efficient at innovation.

Initial findings:
1. Offer incentives for innovations
2. Seek solutions from from a wide variety of people, including researchers and outside sources
3. Encourage collaboration by offering tax credits
4. Encourage outside participation from overseas

http://www.businessweek.com/magazine/content/08_38/b4100052741280_page_3.htm

Sometimes innovation is inherently complex, but what should the goal of innovation be? Arguably it's to simplify, but sometimes that requires taking a radically-new approach to a traditional problem -- redefining its nature and scale. That is the 'case' study we provide here.

Data Loss Problem

One of the most vexing problems of the digital era is the the nightmare of losing critical digital information on a computer. Large corporations spend significant amounts of money on complex, multi-tier systems. What about a consumer or small business, or how about a large corporation that has such a disparate workforce that in many ways its 'problem' looks like that of traditional consumers? There have always been back-up solutions, but they have traditionally been hardware-intensive, complicated and required a tremendous amount of human management.

Mozy -- a company recently acquired by enterprise-storage player EMC -- provides a subscription-based service that enables consumers and businesses to achieve continuous, off-site back-ups of critical information and programs residing on their computers and servers via their local Internet connection from anywhere in the world. Download a piece of software, select your configuration, and you're done! It's that easy.

What does Mozy do differently, though? The company offers a cost-effective service that is incredibly friendly, easy to use and reliable -- simplicity and reliability -- but yet that is technologically robust. In fact, it is light-years ahead of the competition in terms of capabilities and technical sophistication. In many ways, Mozy is an innovation that is both ‘radical innovation’ and ‘architectural innovation.’ It is also not only an upgrade, relative to competitors, but a complete re-think about how to solve the problem of online/off-site backups for its customers.

Radically-new Approach

The service is the result of one entrepreneur, who realized that the scale and nature of back-up solutions is very different, perhaps, than others might view it -- referring to it as a 'petabyte' problem.

Mozy was founded by Josh Coates as Berkeley Data Systems in Utah. He is a serial entrepreneur, who previously founded another storage company, Scale8, which he sold to Intel. Coates approached Mozy from the standpoint of recognizing a core problem that everyone faces – the risks and challenges involved in keeping important, computer-based information safe – and wondering how he could solve this problem as elegantly and simply as possible. He commented to online technology-news site ‘Techrockies’ in 2006: “My career has been spent around large scale parallel systems. The next problem I wanted to tackle was the backup problem. It seems like such an obvious solution to a problem everyone has – how do you keep your data safe.”

Coates was amazed, though, that –- at the time -– there still was not an easy-to-use and reliable solution, and he was also baffled by the cost and nature of others' solutions to the problem.

The solution seemed simple to Coates: "You back it up remotely. Floods, fires, and earthquakes can't get to you, and if someone steals your laptop you're still safe, and your hard drive is still okay. That's a problem that has never been solved. There are three to four dozen backup companies out there, but none have been terribly successful. I thought to myself—why is this still a problem? Why isn't this a no-brainer? Why isn't there a free, automatic, secure backup solution out there? Well, it doesn't take long to figure out why. If you're Yahoo, or Google, with a ten million user base, with 1 or 2G of backup data, that's ten to twenty petabytes. That's why there isn't this ubiquitous remote backup solution out there. I wanted to fix this."

Coates was convinced that no off-the-shelf solution would be sufficient or cost-effective. So he took a different technology approach to Mozy's storage systems than competitors' – a proprietary ‘petabyte’ architecture that he found actually costs dramatically less to operate at scale.

This platform/economics combination enabled Mozy to offer a very compelling amount of value for such a low price. The result, today, is a service that for many consumers with small storage needs is free, and for others and for small businesses it costs only an incremental monthly fee.

Data Revolution?

The company was launched in 2004; it came out of 'stealth mode' in 2006; and it was acquired by EMC in 2007. So it's had a lot of recent attention. So what?

First, it's a great service (which this blog poster can verify, given he has three computers backing up each day via Mozy's premium/paid service).

Second, and most importantly, it represents a tremendous face lift on storage architecture -- one that will undoubtedly impact the industry in numerous ways over the coming decade.

The creative ability of a collection of distant and disaggregated individuals is clearly evident across a number of open-source offerings, including Linux, Mozilla Firefox, and Wikipedia, among others. In recent years, the power of co-creation has been harnessed by a number of corporations, including Ducati, General Mills, and Procter & Gamble and is being widely advocated by a number of recent business tomes, including Democratizing Innovation, Outside Innovation, and The New Age of Innovation. Clearly, customer co-creation is a hot topic and one that will likely attract increasing interest in the near future. Given its recency and the exhuberence expressed by its proponents, it is difficult to decipher the limits of this new innovation technique. Are there any realms where co-creation can't work or shouldn't be applied?

An initial look into the limits of co-creation is provided by Penguin Publishing's recently failed wiki-experiment, A Million Penguins. Essentially, Penguin experimented with the idea of co-creating a novel by applying the logic, principles, and techniques of open-source software. Penguin launched this initiative on its corporate website in early February 2007 and shut it down (due to the overwhelming volume of contributions) approximately one month later. During this brief period, nearly 1,500 authors contributed approximately 11,000 edits. Thus, from a contribution standpoint, this experiment might be considered a success. However, The finished product is a collection of 1,030 pages of chaotic and inchoate prose laden with disjointed paragraphs and a direction-less plot. Those interested in exploring what when wrong (as well as right) should check out both the brief post-mortem provided in Penguin's blog as well as a recent academic investigation of this experiment by Bruce Mason and Sue Thomas of the Institute for Creative Technologies at De Montfort University (UK). Both reports identify a number of problems with this experiment, including creative divergence among its contributors, the technological limits of the wiki-platform, and vandalism, among others. If nothing else, Penguin's experiment presents the co-creation movement with a bit of irony: Although we can write books about co-creation, co-creating a book seems beyond our limits.

While search results presented as blue links may be the current gold standard for web based queries, one company has taken web browsing to the next level.

Sometimes we head to the internet simply to learn more about a subject without having a specific question in mind. Wouldn’t it be nice to review stories and information available on the web as easily as flipping though a magazine? To address this unmet need, "two guys an a gal" in a garage founded Alltop (“all the topics”). This new search engine, a “virtual magazine rack” arranges content by subject. Each page updates from relevant blogs, newspapers, magazines, etc. Even better, rolling the mouse over a headline gives an instant preview so there’s no need to click through to determine if the content is of interest.

Not only is Alltop an innovative way to approach web content, but it also has a site dedicated specifically to innovation, particularly in business. Check it out: http://innovation.alltop.com. The site updates constantly so you never know what you’ll find.

In "The NPD Manager's Quest" (p. 10 of the June 2008 PDMA Visions Magazine posted on the course website) Mukund Karanjikar argues that lower level managers and employees are better positioned than senior leadership to lead NPD efforts.

According to his view, upper managers have little to gain and much to lose by taking an active role in new product development. They prefer to handle "well-set operations" with little chance of failure, and delegate innovation to lower level intrepreneurs (or hire consultants). Such an arrangement can work, he says, as long as front-line managers in charge of NPD are well chosen (Karanjikar lists 5 key intrapreneurial traits) and receive proper attention and resources from upper management.

Historically, perhaps due to typical organizational structures and incentives, a grass roots approach to innovation seems to improve a project's chances for success. To illustrate this observation, the author quotes Vijay Govindarajan who asks "How many revolutions are started by kings?"

Interpublic Group's Mediabrands has created a venture fund to encourage employees to "step forward and lead our businesses into the future." It is expected 3-5 proposals will receive be selected every year. Reward ideas will focus on new business models, new types of media and marketing services.