One of the unfortunate disadvantages of living in an isolated (yet otherwise wonderful) nation such as Australia is that occasionally concepts, businesses and products can take a little while to filter over from the US or Europe. Things like touch-and-go bus passes only recently arrived (in Brisbane at least), we still don’t have either Netflix or Hulu (although iTunes, Foxtel and Telstra are partially filling that gap) and wearing American Apparel over here will either make you really trendy or get no reaction at all (dependent on the current scene).
But with this isolation comes an advantage to locally savvy businesses and entrepreneurs who have an external focus to bring these ideas, products and businesses to their local markets. I don’t know how many BRW articles I’ve read showing some new startup which is doing something I’ve seen online in the states a couple of years back. If you’re lucky enough to travel regularly spotting an international trend, business model, idea, strategy or simply a product that hasn’t made it to your local market can be, in itself, a great strategy. Although large strategies like Virgin Blue are obvious translations, relatively innocuous things such as blogs can be successfully tweaked and localised in the form of Australianised (insert your local form here) content as has been seen here in Things Bogans Like which has been pretty successful if the reviews of the book I’ve spotted in GQ and the Australian are anything to go by, is pretty clearly influenced by Stuff White People Like, a US based blog, and marketing juggernaut, which makes fun of “white america” (which seems to translate to hipsters and suburbanites).
Although there are a million and one ways of localising I’ve built a table below that has a few examples that I’ve identified (this misses obvious ones such as simple products).
|Corporate Strategy||Virgin Blue copying the low-cost carrier form proven with Southwest Airlines
Big W taking the store concept from Walmart in the US (although not taking the small town component of the strategy)
|Business Model||Internet – Catch of the Day (catchoftheday.com.au) localising Woot! (www.woot.com)|
|Content Strategy||Localisation of TV shows (Biggest Loser etc.).
Localisation of publishing style – Chaser in Australia copying The Onion in the states (yes, shock horror, the chaser originated as a pretty lame localisation of a massively funny US comedy publisher).
Humor and/or websites (Things White People Like becomes Things Bogans Like)
Personally, I actually think the best example of a market that would respond well to this strategy is a westernised, yet slightly isolated nation such as Australia – it might translate to other cultures but I haven’t thought about that yet. As per usual, use your brain when localising, cultures and economies are not completely compatible.
I actually think this is a pretty interesting topic (particularly for Australia) and I’m sure there are way more examples of this and I’m going to set up a collaborative list when I figure out the best platform.
Tim’s post was seemingly in opposition to another book I was looking through this afternoon called “Making Strategy Work (Making Strategy Work (Amazon Link)), a compilation of essays containing a section on “testing before doing” by Robert Sutton of Stanford U, which stated the need for evidence before action. Now as my previous post stated I’m a big believer in scientific method or “evidence based management” (EBM) where it is needed, but I really think that people need to understand where you can measure something, and where you need to make a logical jump that no matter how much market research you do, will never come up in a focus group.
Robert Sutton’s example is of the CEO of 7-Eleven, upon walking into one of his stores and receiving bad attitude from the clerk spending millions of dollars on an outstanding service program, including awarding one of the 7-Eleven franchisees who had perfect service ratings $1 Million dollars and another bunch of initiatives, but after the fact realising that customers of 7-Eleven didn’t really care about the interaction with the employees, rather they just wanted to shop as quickly as possible. In this case, a really simple bit of market research such as a COMB analysis would’ve pointed out the misdirection of effort towards something that, while important, wasn’t really the greatest concern of the organisation.
Although analytical approaches such EBM are completely the right way to go when performing analysis in domains that aren’t new to the world (like customer service), when you’re playing a completely new game, you need to take some leadership rather than following. Last night I was watching Mad Men season 3 where the inimitable Don Draper is faced by focus group market research which opposed his idea for an ad campaign for cold cream but he went with it anyway, stating that if someone was to hold another focus group after his campaign ran for a year, it would back him up. I really thought about the creative leadership that CEOs like Jobs with the iPad who created products, that on first view and market sentiment wouldn’t have passed traditional market research, but through focussed leadership were given the go, and found success (admittedly this paragraph is begging for a post on ethnography and its importance in new product development and research).
Breakout successes that construct or reinvent market segments like the iPad, or Netflix, or Zipcar will never come out of market research or focus groups. These products require creative leadership, someone who sees a market need before anyone else does, even consumers. Solely following market whims (for it is an incredibly useful skill) usually results in firms who won’t ever be outstanding innovators. For companies to get really successful they need to understand when to be research and market driven, and when to let creativity rule.
When I’m thinking about any subject I usually like to organise my thoughts around what the main parts of a subject are. My day job is consulting, mostly in strategy, and as a field strategy has some order as to what it include, if you take some financial analysis, economics, and marketing, add in organisational and system dynamics you’ve got a pretty good core toolkit for a strategist. Recently Tim Kastelle had a great post on what defines innovation, and Hutch Carpenter on blogging-innovation has developed 25 definitions of innovation, but what is the core toolkit for an innovator? I’ve studied technology and innovation management at uni, but didn’t quite feel that I learned the whole deal, and since then I’ve put a bit of brain power to what skills make an innovator and came up with the following:
- Design thinking and creative problem solving – Design thinking is becoming super cool at the moment, and although I don’t think an MFA is going to save your company any more than an MBA was 20 years ago, understanding the concepts of design and “design thinking” are a good start for making a company more innovative and creative.
- Social science/market research – Personally, I think that the quantitative and qualitative arts of social science, and the business focussed version – market research, provide the tools and techniques to understand important stakeholder groups and use this understanding as an important input into innovation.
- Business modelling – Business models have emerged as one of the most important aspects of capturing innovation within organisations. Learning the art of business modelling provides innovators with the skills to structure businesses around innovations and hopefully capture enough value (i.e. money) to keep the doors open.
- Research and development – Whether scientific, engineering, product, or software R&D, I think that all innovators have to understand some of the fundamentals of research and development. Although, I think that R&D management has a long way to go (i.e. “money != innovations”), there is some good ground to be made by learning the systems of research, including: peer review, knowledge management and collaboration, and the systems of new product development.
- Project and portfolio management – This might seem a bit operational, and it is, but as almost all innovations are project based, and as all innovations are risky, unless you can afford for a company to go down due to one misfire, you’ll need a portfolio of them. There is a huge literature on project and portfolio management out there (the PMI is a good place to start) and it’s worth looking at to provide some rigor to budgetting, resource planning, risk management and valuation of organisational innovation programs and innovation portfolios.
- Intellectual property protection – Innovations are usually built upon a core of valuable and unique knowledge. While you might not neccessarily need own that core to capture value, if you do, understanding the mechanisms for protecting intellectual property, both legal and non-legal (not illegal, through business models and the like) is important for ensuring the payoff on hard R&D work.
Finally, there are a few others, but I’m unsure about how “core” they are, including:
- Evolutionary economics – underpinning all innovation theory is Schumpeter’s evolutionary economics, although I wonder if the economist view of innovation vs the innovation studies view of innovation is developing into a similar schizm to the military and business strategy schizm we see today (although I’m sure you still see the occasional copy of Von Clauszwitz on a CEO bookshelf).
- Social network analysis – recently trendy, and surprisingly useful for understanding innovation networks and the like, though I wonder how useful it is for the innovation practitioner. I think the combination of SNA, system dynamics, and epidemiology would make a pretty potent innovation dynamics toolkit, although I don’t know if that’s out there at the moment.
- Community building – This is hard to define, and while there are a number of books out there on building web communities, I don’t really know how defined it is as a discipline in it’s own right and whether it’s truly core to innovation.
There you go, of course, any fully rounded business leader should be comfortable with both strategy and innovation, as well as the essential operational and hard to define leadership skills. But that’s my thoughts on what makes an innovator. Any feedback?
In a world of hypercompetition, (almost) everyone is used to the art/science of competitive intelligence, but I can’t help but thinking there’s one competitor that a lot of app developers forget. Let me explain:
I spend a lot of time looking at the massive stream of webapps being produced by today’s software entrepreneurs. Usually, I try and focus on apps that can help you or your business work better, smarter, faster etc (gDocs, basecamp, etc).
If you’re developing apps for business, there are a lot of packages that do contact managment, project management, email newsletters, invoicing, cashflow, diagramming, everything! So, when you decide what you’re going to build (scratch that itch!) you’re probably look at crunchbase or do some googling and come up with whatever 37signals are currently peddling or whatever. You imagine that you can compete on features, or price, or connectivity or style, and against those guys, who knows you might be able to, but there’s one competitor you’re (probably) not thinking about, Microsoft Excel.
The unfortunate reality of the situation, is that Excel, and similar spreadsheet metaphor programs like OpenOffice Calc, Numbers (which is attractive, but kind of useless), and Google Spreadsheets have some genuine advantages that your app doesn’t, namely:
- They are ubiquitous – I can’t remember ever being in a situation where I didn’t have access to excel, and if not, OpenOffice is just a download away, likewise Google Spreadsheets takes about 20 seconds to set up and has all the features 99% of the population use. What does this mean, spreadsheets (even excel at $300 a pop) is free.
- Everyone understands the spreadsheet metaphor – Training is expensive, and although I can pick up most applications in an hour or so you can bet that Bob down the hall who still uses Windows 95 on his home machine doesn’t give a hoot about folksonomies;
- Spreadsheets handle mess – your data doesn’t have to be perfect, you don’t even really have to understand what you are doing to get yourself out of trouble. As a geek, I’m terrified by that concept, but most people aren’t geeks, they just want to achieve outcomes as fast as possible. The other side of this is that requirements change all the time, and the infinitely customisable spreadsheet is always relevant (messiness is another reason twitter is so successful).
- When you know what you are doing, excel is scary powerful – there are things that I’ve done using excel that I couldn’t do with any other program short of Mathematica or another scientific program (language really), try building a gantt chart in basecamp (without an add on).
- Finally, businesses are heavily invested in spreadsheets – I would guess that globally there is more business rules, data, and intelligence embedded in excel files than every other technology (language and data) combined moving those items out to a webapp (if it’s possible at all) would be a massive task and IT support for cloud APIs is only just taking off (assuming the company is big enough for in-house IT, and 99% of companies aren’t);
So, basically, on top of all your webapp competitors you have the spreadsheet monster on your back. So what do you do? I usually thing a good thing to do is look at both what your competitors suck at, and beat it, and what your competitors are good at, mix it up with what your customers value, and go for it. There are a few things that spreadsheets aren’t so good at, that custom apps just can’t be beaten for:
- collaboration – gDocs is pushing back here with multiple editors and a pretty useful form editor, but for the most part spreadsheets are used by people one at a time, and are versioned (poorly).
- integrity – excel is really notorious for having one bad user screw up everyone elses hard work. Custom apps can have both complex security models, and data protection that excel can’t.
- interoperability – beyond mail merging, getting excel to talk to anything else takes a lot of VBA, or a lot of copy-pasting
As a first step, make sure that any webapp you develop can hit it out of the park in these three dimensions (or something else that’s awesome and remarkable). I’m rambling a little (still getting used to blogging), so I’ll try and summarize: businesses need to see a big (and risk adjusted) benefit before investing on new systems; people go with what they know; and finally, just because someone doesn’t run MS Project (or basecamp), don’t assume they don’t have project management software.
Scientists at the University of Texas (Austin) have shown that the more active your brain’s frontal lobe is (the decision center) the more accurate your view of your self is.
“In healthy people, the more you activate a portion of your frontal lobes, the more accurate your view of yourself is,” says Jennifer Beer, an assistant professor of psychology at the University of Texas at Austin. “And the more you view yourself as desirable or better than your peers, the less you use those lobes.”
Don’t know if I’m reading this wrong, but it looks to me like this shows that people who have an overly (or unhealthily) positive view of themselves may have limitations in their frontal lobe, which might show a lack disposition for good decision making in general (or might just show that they have some reptilian brain based love for themselves.
A lot of business writers like Peter Senge make statements that show people who know themselves accurately make better decisions and are better leaders (I would say this is at least anecdotal). Possibly there’s some neuroscience behind that as well…