Change the Future

2016-07-15T11:22:00.000-05:00

Innovation and Problem Solving in Corporations

Innovation is a loaded and often misused word. This has never been truer than when the word is used in large corporations. How often have large corporations introduced new innovation processes or innovation teams with great fanfare? At best these teams often focus on problem solving and at their worst, they are simply paying lip service to innovation to fulfill a promise that “we are an innovative organization.”

This raises the obvious question of what the difference is between problem solving and innovation. They are closely related, with one fundamental difference. Problem solving in corporations is about identifying and fixing the problems that people already know about or reasonably should know about. If you ask enough questions about what’s not working, what is causing problems and what is frustrating your customers, suppliers, employees and partners, you can usually develop a good list of problems to solve. This can be a useful and valuable exercise. But… This isn’t the same thing as innovation.

Innovation is different from problem solving, because innovation is about solving the problems that no one sees. Innovation is solving the problems that aren’t obvious. Incremental enhancements or improvements to a design aren’t innovation as much as they are problem solving. Innovation may create a new market where one didn’t exist before. If someone looks at a new product or service and says “Why didn’t I/we think of that?” it’s more likely that they are describing innovation, not simply problem solving.

There are many well documented examples of innovation, including: the mobile phone, the iPad, WiFi, the spreadsheet, the microwave oven, personal computers, television, and radio. Much older innovations were things like glass, the abacus, paper, and the printing press.

Many of these innovations fundamentally changed what was possible at the time. They changed the way individuals and societies communicated, were entertained, cooked, built buildings and consumed information.

In most cases, they started with an individual or a team saying “What if?” While innovations are often brought to the mass market by large companies and corporations, it’s far more common for innovations and inventions to originate with individuals or small groups of entrepreneurs.

There is no reason why innovations can’t originate within larger organizations, but often there are organizational barriers making this very difficult. What is required to innovate within organizations?

Innovation Enablers

People who are creative, open-minded, and curious
Knowledge and understanding of the area of innovation focus. (This could be the market, the customers, the employees, the suppliers or partners.)
Risk tolerance and an acceptance that failure is part of the process
A sponsor who understands the importance of items one through three and understands how to cultivate, curate and encourage innovation.

People

People are where corporate innovation attempts will succeed or fail. While nothing can guarantee that innovation will succeed, true innovators tend to look at the world differently. They are always looking for problems to solve. They tend to be curious and are willing to ask many questions. They embrace the idea that there are many ways to solve a problem, design a product or process and are willing to try multiple approaches. They make connections and see relationships where others often do not. Most companies have these people, but they tend to be spread throughout the organization. Individuals with a problem solving mindset may be found in operations, sales, marketing, information technology or any other part of the organization. Sometimes they are not appreciated by the teams they are part of, because they frequently asking questions and challenge the status quo.

Knowledge

Innovators in corporations need to take the time to understand their environment. That often means meeting with customers, employees, suppliers and partners. It means asking lots of questions and trying to understand both the current environment as well as what the future may hold. It also means making a genuine effort to understand what are the challenges and opportunities. This is the point where problem solver and innovator typically diverges. The problem solver will see the challenges and immediately begin to work out solutions. The innovator looks at the total environment and sees problems, connections and relationships that others often do not. They ask “what if” and “why” and they keep asking until they are satisfied that they understand. They often are looking for the problems that are over the horizon. They ask how they can make the environment better.

“What if we had self-driving cars; what if we have a battery that lasted for five years; what if we have a recession; what if a competitor launches a completely new service?”

Risk and Failure

Innovation is inherently a risky activity. It has been said that if you are afraid to fail, you are afraid to innovate. Very few entrepreneurs succeed with their first idea or approach. A fear of failure is the death of many innovative ideas in corporations. Common phrases thrown at corporate innovators are:

That would never work,
We tried that once,
It would cannibalize our existing product/service,
Or simply, that’s a dumb idea…

Corporations that wish to innovate must be willing to try new ideas and see what works. They must give teams a chance to take risks and explore alternatives. It’s not necessarily bad to have realists and even pessimists on an innovation team. A team member who challenges other’s ideas can be useful if the feedback is framed in the context of making the ideas better and more useful. One of the most useful messages to an organization about innovation is simply that “innovation requires us to try new ideas and some of them are going to fail. That’s ok and is expected.”

Sponsor

The best sponsors of innovation teams meet the criteria for team members described above. An organization that is serious about innovation will find a sponsor who is also open-minded, creative, and curious. The organization will need the sponsor to be a champion who understands that the team will require time to investigate and learn. An innovative organization also needs the sponsor to be a realist who understands that risk and failure is an inherent part of innovation. Sponsors like this sometimes are not the person who happens to head the current product or service organization. A successful sponsor could come from any part of the company as long as they have the right abilities and executive support. A corporation that wants to innovate must be willing to put the right people into the right places for success. This includes selecting the right sponsor to champion and support the team. A good sponsor will give teams the time they need to develop and prove new ideas. They must be adaptable, willing to drive change and make decisions that upset the status quo.

Summary

Is innovation possible in large corporations? The simple answer is yes. Companies like Apple, Amazon, Starbucks and even Toyota show that innovation doesn’t have to happen in start-ups. Can corporations take steps to encourage innovation? An unequivocal, yes! Problem solving and innovation can clearly be encouraged and developed with the right people, knowledge, risk tolerance and sponsorship. But… There is no guarantee that teams will ever cross the threshold from solving problems to innovating. That takes the right people in the right place, with the right support. If it was easy, every company would be innovating.

Content wants to be Digital

2010-02-03T12:55:00.012-06:00

We live in a world in which content is increasingly digital. Consumers purchase music from Apple's ITunes and consume it on their IPods; they read and view the news on web sites like cnn.com, nytimes.com and slate.com; they read books on devices like the Amazon Kindle and Sony Reader and watch video on HuLu and YouTube. Yet articles abound with knowledgeable authors commenting on whether online will replace print. Most of these articles miss the point. It's not about online versus print, it's about content becoming digital. It's no longer a question of if, it's just a question of when...

The obvious content sources that consumers want to be digital and will eventually be digital include:

Music
Newspapers and Magazines
Books (including textbooks)
Photos and other Art
Video, Movies and Television
Games

Why do we want these content types to be digital?

Digital content is portable.
Digital content can be searchable. (it can be classified and categorized)
Digital content is accessible.
Digital content can be archived.

Portability
Some may argue that content in non-digital forms is also portable. The Sony Walkman existed for CDs long before the Apple IPod. Books, newspapers and magazines have been carried around for as long as they have existed. The difference is that digital content removes the size and weight limits that exist with traditional media. An MP3 player can carry 10,000 songs, while it would be physically impossible for someone to carry more than a few dozen CDs. A backpack can carry a dozen textbooks, but the size and weight of the books quickly becomes a limiting factor. An e-book on the other hand, can carry hundreds of books on a device that weighs only a few ounces. (A point that was driven home on a recent two week beach vacation when I no longer needed a separate duffel bag for books. The Kindle had all the reading I'd need for the trip.)

Searchability
It's relatively difficult to search and access content in non-digital form. Newspapers and magazines in non-digital form are almost impossible to "search" for a story of interest. Books in a physical library can at best be searched by category, author, title, etc. Books that have been digitized and stored only can be searched by any word or phrase in the book. Think of the vast wealth of human knowledge that can now be searched instantaneously due to digitization and internet search engines. Now imagine if every book, newspaper, television program or magazine ever created were available for searching and accessing online.

Accessibility
Content is more valuable when it can be accessed whenever and wherever it is needed. Physical encyclopedias were quickly replaced by internet encyclopedias because the information could be accessed and updated more efficiently and effectively in digital form. Sites like Hulu.com have demonstrated the easy with which television content can be accessed and viewed online (including commercials to pay for the content). Devices like the IPhone, Droid, Blackberry and IPad demonstrate how digital content can be accessed, stored and viewed from mobile devices anywhere and at any time. It's now possible to be sitting on a beach on a remote Greek Isle (due to cellular coverage) and search for content, purchase it and download it for instant viewing or reading.

Archiving
Physical content is difficult to archive and retrieve. How many of us have a favorite magazine subscription (e.g. Rolling Stone, Conde Nast Traveler, Cooking Light) that we store in boxes in our basement or attic? The expectation is that at some point in the future, we may want to refer to the content when we have a specific need. I've saved dozens of Conde Nast Traveler magazines with the hope that the next time I visit far away place, I will sort through them to find relevant articles (e.g. the coast of Spain). Of course, what really happens is that when planning the trip to Spain, I'll search a variety of online sites for content before I'd ever flip through years of physical magazines. The content online is searchable, has been categorized, can be printed or copied to my laptop or mobile phone for travel. It's also far easier to make copies of a digital archive for secure storage in multiple locations. A fire would destroy all my physical archives in minutes, while my digital archives would be secure in an offsite safe.

What's next?
It should be obvious that in many forms each of these content types are already digital. CD's have almost completely been replaced by music downloads, and an In-Stat forecast predicts that the e-book market will be more than $9 billion in 2013 (and that was before the 2009 holiday season and the January 2010 Ipad announcement). In addition, video game sales accounted for more than $19 billion in 2009 (source). It should be obvious that the future for content is digital.

If we can make the assumption that digital content delivery will replace physical content in the not too distant future, what should content generating companies and individuals be doing to prepare for it. In addition, what needs to happen to make the digital future a reality for each of these content types. The answers to these questions must include analysis of the hardware and software for displaying/using digital content as well as a look at how digital content will change the business models for publishers. We'll also look at the big question of when digital may replace physical content for each of the media types. These questions and the answers will be the subject of our next article...

Ipad: Is it the ultimate publishing tool?

2010-02-03T12:49:00.000-06:00

Does the Apple Ipad change the game for newspaper and magazine publishers?

More than two years ago, when the Amazon Kindle first launched, I wrote an article about the evolution of e-readers that was necessary to make then great devices for newspaper and magazine publishers. The Kindle (and other similar "e-paper" e-readers) is a "good enough" device for reading books, but it has some severe limitations for newspaper and magazine readers. With the recent announcement about the Apple Ipad, now is a good time to revisit what is needed for publishers on an e-reader.

In the original article, we highlighted several limitations the then current generation of e-readers (e.g. Kindle, Sony Reader, etc.).

Lack of touch screen navigation
Lack of advertising in publications (e.g. Amazon Kindle)
Lack of color and multi-media for advertising (e.g. Flash or video)
Control of the subscriber
Battery life when wireless is on

The recently announced Ipad appears to address each of these items in some way.

The first question that I'm sometimes asked is "Why is touch screen navigation so important for newspaper and magazine reading on an e-reader?" Reading a book is a very linear process. The reader starts on Page 1, then reads Page 2, Page 3, Page 4, etc. The process of reading a newspaper or magazine tends to be very non-linear. The reader may read an article from the front page or cover that catches their eye, then jump to another section (e.g. Comics, Gossip, Advice column, Business, etc.), then they will jump back to the front section and so on... Touch screen navigation works very well for publications in which the reader is jumping around from section to section or article to article. This is a capability that next generation e-readers like the Sony Reader and Apple Ipad provide with touch screen navigation.

Advertising is the lifeblood of traditional newspaper and magazine publishing. In some cases, advertising accounts for 80% of revenue, with subscriptions and single-copy purchases providing the remainder. For this reason, the Amazon Kindle model with no advertising simply doesn't work long-term for publishers. It appears that this will not be a limitation of the Ipad. This will be key for publisher's success with e-readers and may ultimately force Amazon to change their model for publishers. Advertising on e-readers may also be a mixed blessing for publishers in that it will deliver the enhanced tracking (e.g. click-thru and click to purchase) that advertisers increasingly expect and demand, but may mirror online advertising results that show lower than desired click-thru rates that ultimately result in lower ad revenue for publishers.

The first generation e-readers have used "e-paper" technology that is limited to fairly low resolution black and white text and images. E-paper has a relatively slow refresh rate that precludes multi-media and video. Advertisers are accustomed to color in traditional print media and multi-media (e.g. Flash, animated GIFs) in online advertising. A e-reader that has color ads, multi-media ads and the ability to click on an ad and be delivered to the advertiser's web site is considerably more valuable for advertisers and ultimately for publishers. The Ipad has a high resolution color screen that is capable of displaying multi-media and can link to web sites either through Wi-Fi or the optional 3G cellular. (Unfortunately, the 3G model and associated costs may ultimately be a problem for publishers. More on that later...)

Apple's decision to restrict Adobe Flash on the Ipad seems like a short sighted one that has more to do with corporate animosity between Apple and Adobe than it does with technology. Adobe like to tout the statistic that Flash is available on 99% of Internet enabled desktops and increasingly on mobile devices as well, including Blackberries, Google Android and Windows Mobile. It is ultimately in the best interest of publishers and advertisers for Adobe Flash to be supported on the Ipad and similar devices.

The first generation Kindle had very poor battery life when the wireless capability was turned on. My first generation Kindle battery lasted less than two hours (even after a battery replacement) when the wireless was turned on and in use. Amazon made firmware improvements in November 2009 that was designed to almost double (to 7 days) the battery life of the Kindle 2 and Kindle DX (but not the original Kindle). In order for publishers to deliver advertising with clickable links to live web sites, the e-reader devices must be able to leave wireless turned on without unreasonably draining the battery. The Apple announcement indicates that the Ipad will have a 10 hour battery life. Of course, device manufacturers have a history of inflating battery life claims, so we'll have to wait and see real world results.

One significant downside of the Amazon Kindle model for publishers is that Amazon completely controls the subscriber. While Amazon now provides subscriber information to publishers, Amazon has had a very restrictive agreement about what publishers can do with the information. Amazon has also takes approximately 70% of the revenue publishers receive from subscriptions on the Kindle. While this sounds ridiculous on the surface, it might actually be a viable model if publisher could advertise on the Kindle and retained all the profits from the advertising in their publications. In the absence of advertising revenue, the Kindle model simply isn't a long-term viable one for newspaper and magazine publishers. It's interesting to note that Apple's App Store model is exactly the opposite of Amazon, in that Apple receives 30% of the revenue from the sale of an application, while the publisher receives 70%. This has proved to be a highly successful model for both Apple and application developers.

The bottom line is that the Ipad has great potential for newspaper and magazine publishers. It's a device that delivers many of the capabilities that were missing in the first generation e-readers. If newspaper and magazine publishers are ahead of the curve, they will all be developing Ipad applications that leverage the capabilities of the device to deliver their content to consumers with a good navigation interface, and rich media advertising. Paper is ultimately a very inefficient content delivery mechanism for publishers that will be replaced with digital delivery. The only question is when...

Unfortunately, there are some problems with the Ipad for publishers that are likely prevent a widespread adoption. Most of these are related to the wireless capabilities (e.g. Wi-Fi and 3G) for content delivery. In one of our future posts, we'll talk about what these problems are and what publishers should be doing now to address them.

How high speed networks change the mobile content game...

2008-01-05T20:48:00.000-06:00

It's amazing how a simple addition can make a mobile device so much more effective. I've had a Blackberry for a while, but the addition of WI-FI has fundamentally changed how I use the device. The new T-Mobile Blackberry 8320 has a large screen and WI-FI. By hooking the device up to my home wireless network I've gained very fast Internet browsing that's always available. With a full keyboard on the 8320, it's easy to query a search engine or browse the web. The big negative is that the Blackberry browser still isn't very good. We can only hope that RIM will invest more energy into improving their browser now that it's more practical to use it.

Similarly, my new AT&T LG CU500V cell phone uses the new 3G UMTS network for data. While it's not as fast as WI-FI, it's fast enough for full motion video and much faster web browsing everywhere I go in the Chicago area. What the device lacks is a full keyboard and a large screen.

The truly game changing device will have a large screen, full keyboard, fully capable browser, GPS, good audio/video capabilities and very fast unlimited network access. Let's call this the NextGen device. (Note: The Apple Iphone is close to fitting the description, but still lacks the keyboard and full-time fast network access. It has WI-FI, but is still on AT&T's older and slower data network.)

How does this change the future?
With a NextGen device, it's possible to browse the web anytime, anywhere, with a rich media experience. Imagine a world in which all the knowledge of the web is instantly available to anyone at any time.

In a NextGen world, you'll check the news on your mobile device and expect that the stories are updated 30 minutes later when you check again...

In a NextGen world, when you see the sky darken, you access the weather on the device and see real-time animated radar and satellite maps of the approaching thunderstorm. Your device knows where you are, so you shouldn't even need to enter your location the way you do today. You'll expect the maps to be current to the minute, not just what was happening 15 minutes ago. (Hint: Accuweather and Weather.com haven't figured out the need for mobile applets. When they do, they should be charging a premium to make the information real-time for mobile devices.)

When you are out and about and get hungry, it will be easy to explore your options wherever you are. Your NextGen device knows where you are, so it will be easy to search for restaurants that meet your criteria within a radius around where you are. (Hint: Zagat should be partnering with a mapping vendor like Google Maps to make this a reality today.)

In a NextGen world, when you want to know what the hours for a business are, you don't call information and call the business, you just Google the business. (Hint: If your business doesn't have a web site that explains that you do, how to find you and what your hours are, your late to the game. Big companies need to make sure that a location based search finds their franchises. e.g. glenview, mcdonalds address.)

In a NextGen world, you can be standing in a physical store and reading product reviews and comparing prices online. (Hint: If physical retailers still aren't worried about competing with online retailers, look out...)

In a NextGen world, email and instant messaging is immediately accessible wherever you are. When you combine Instant Messaging presence with a NextGen device and a social networking site like Facebook, your friends and family may always know where you are and what you're doing. (Some people are already doing this with services like Twitter...)

Imagine the millions of silly arguments about trivia and not so trivial items that could be immediately resolved by pulling out a NextGen device and doing a search. Of course most of those people will just find new things to argue about... (Hint: Search needs to get smarter and web sites need to be better organized to make it easier to find content.)

In a NextGen world travelers have all the information they need available fast and easy. Check flight status in real-time, change flights, book a hotel or bed and breakfast, make a restaurant reservation, get directions to the restaurant, check the hours of the museum or the price of the subway.

What should you do to plan for this future...
Mobile consumers will expect information to be fast, easy and real time. Mobile consumers will expect to be able to do everything they do today over the phone or over a PC on a NextGen device with a 2 inch screen. If you have a restaurant, make sure you have a web site and if you take reservations, make sure you do it online and on mobile devices. Even the smaller hotels, motels and bed and breakfasts should be bookable online and on mobile devices. News sites need to rethink how fast they need to get updates online when consumers start to expect real time updates to stories with audio and video on their mobile devices. Start thinking about how your web site looks on mobile browsers and how it will be used differently by mobile consumers. Think about how to integrate your information with GPS and mapping to increase its value to your customers. If your business model is inherently valuable to mobile consumers (e.g. Zagat, Accuweather, etc.) consider creating applets for mobile devices and charging for premium content and services.