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Where to Look for Insight
Technology Briefing |
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TranscriptInnovation is a mindset that should permeate your entire enterprise. No matter the venue, the feedstock for innovation is insight. Insights can be about stakeholder needs, market dynamics, or even how your company works. Several Fortune 500 companies have been founded on a single insight about what customers want. Inside your company, insights can lead to more-efficient operations, simplified processes, or leaner structures. Insights can be powerful, but how do you find them? Northwestern University's Mohanbir Sawhney and Kellogg's Sanjay Khosla addressed this question in "Where to Look for Insight," published in the November 2014 issue of Harvard Business Review. According to Sawhney and Khosla, the best insights tend to come from sources that can be categorized, and it's possible for individuals to approach innovation in a systematic way. On the basis of their experience with and research into entrepreneurial ventures and product-development groups in varied industries around the world, Sawhney and Khosla outlined seven "insight channels" that can be used by would-be innovators in any function or role. By periodically tuning in to these channels and methodically running through them, you can focus your imagination, organize thinking, spur creativity, and find valuable ideas for growth. The first channel involves examining anomalies. Businesses today are awash in data. Sometimes the real opportunities lie in the results that deviate from business as usual. Consider an anomaly in global e-commerce. One might think that Russia, with more than 100 million middle-class consumers and 75 million Internet subscribers, would be an attractive market for online retail. However, e-commerce accounts for a paltry 1.5 percent of total retail sales in the country. The entrepreneur Niels Tonsen recognized why: The Russian postal system is very unreliable, and few consumers have credit cards. This insight led Tonsen to create an online clothing store, Lamoda, which employs an army of couriers to deliver customers' purchases to their homes, pick up cash on delivery, and even offer fashion advice. By providing an innovative experience that effectively brings the store, the style consultant, and the cash register to the customer's front door, Lamoda built a very successful e-commerce business, uniquely suited to the Russian market. The smart innovator knows to notice and then follow up on surprising data. To look for anomalies, ask questions such as:
The second channel involves confluence. When several trends come together, their intersection can be fertile ground for insights. For instance, the confluence of mobile telephony growth, social networking, and increasingly short attention spans has spurred the creation of social media applications, including:
New social habits, technologies, and areas of interest are forming all the time across all facets of life. The smart innovator looks at how they fit together. Ask yourself:
Similarly, if you combine the rising costs and difficulty of sourcing talent with the widespread availability of mobile video, you can see an opportunity to create a video-based recruitment application to screen a large number of candidates at a low cost. The third channel for insights involves frustrations. Life's irritations are often a terrific source of ideas. Put yourself in the shoes of customers, colleagues, or suppliers, and ask:
The fourth channel for insights involves examining orthodoxies. When something has always been done the same way on your team, or in your organization or industry, it's worth asking if there's an alternative. Traditions often block potential innovations because people are reluctant to abandon the tried-and-true. But when conditions change, so must traditions. Orthodoxies hide in every organization, industry, and market. To uncover them, ask yourself:
Businesses, appropriately, spend most of their time concerned with their mainstream stakeholders. But sometimes it is the "positive deviants," as Oxford University's Richard Pascale calls them, who are a rich source of ideas or insights, teaching us innovative ways to overcome incredible odds or solve seemingly intractable problems. Positive deviants may be visionary customers who can help you see trends before they become mainstream. They may be manic co-workers who are passionate and don't take no for an answer. They may be enlightened shareholders who can help shape your company's strategy. Innovators must look at the fringes of stakeholder groups and ask: What can we learn from those who are most intense in their complaints or enthusiasm that we could apply to our company or our role? The sixth channel for insights involves voyages. When business turns stale, innovators get out of their own offices to visit "customers," who may include employees they manage, colleagues who rely on their work product, or the people who buy their goods and services. These "voyages" into different worlds are necessary because all behavior takes place within a rich socio-cultural context; it's impossible to understand what others are thinking when you're sitting alone at your desk. Designers and product developers have long understood how important it is to take this anthropological approach. A few years ago, Jennifer Hargreaves, a manager at the financial software company Intuit, was tasked with creating a new version of the company's popular QuickBooks product for nonprofit organizations. Her first step was to volunteer at a local charity. After immersing herself in the new context - helping to manage the organization's accounts for a few months - she noticed sharp differences between for-profit and nonprofit financial management processes. The focus was fundraising, not sales, and donors, not customers. This on-the-ground research helped her brainstorm extra features - such as the ability to track donations, pledges, and grants separately, and to allocate expenses to particular initiatives or programs - for the new QuickBooks Premier Nonprofit, which she later launched to positive reviews and sales. Anyone can make similar voyages. Learn how your stakeholders live, work, and behave. Ask yourself:
Sometimes other teams, business units, companies, or industries have adopted useful ideas or systems that haven't crossed the border, so to speak. Can you import innovation - even from a place that seems far removed or exotic? Greg Lambrecht came up with his Coravin Wine Access System by co-opting ideas from the world of surgery. An MIT-trained engineer and an oenophile, he grew tired of uncorking bottles that he didn't want to finish in one night, only to have the fine wine start to oxidize and deteriorate. Wouldn't it be wonderful to be able to drink just one glass, while leaving the rest perfectly preserved? He knew that surgeons had started using extra-fine needles to perform minimally invasive surgery and wondered if the same type of needles could be used to draw wine from a bottle. He tested and developed the idea over more than a decade, and despite a few setbacks, Coravin has been well reviewed and is now widely available. Innovators should study a wide range of unrelated functional groups and industries to look for analogies that they can adapt to their domains. Sahwney and Khosla have found that these seven insight channels are consistently powerful drivers of innovation. Although they're most commonly used by entrepreneurs, developers, and designers, they can help anyone in any role and in any context where new thinking is required. Few people find great ideas on a blank canvas. Most of us need our imaginations channeled, and these seven channels can help us to do that. |
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