Category Archives: Commercialization

Design Thinking Innovation Nugget: ENVIRONMENT

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After completing a fairly detailed overview & training session (including a visit to Stanford’s d. School), I came away with several new tools that will be added to the BMI toolkit. So, without further delay, let’s get into the first of two key categories of tools that most definitely add tremendous value to today’s innovation process.

Environment & Physical Space

Whether in the Idea Generation or Commercialization Analysis phase of the Innovation Lifecycle, participants are likely to find themselves in a group setting to discuss / debate / ideate. For the vast majority of us, that usually means some conference room or hotel conference facility somewhere. Until my visit to the d. School at Stanford, I had pretty much accepted this as one constant that really didn’t warrant much extra attention. Sure, we could improvise by using flip charts, post-it notes, and rearranging the tables a bit, but most creativity would be unlocked by other facilitation techniques – carefully planning breakout groups, six thinking hats role-play, pre-mortem, etc.

I now believe we have been selling ourselves short by not taking advantage of a truly innovation-friendly environment. Although you can hopefully gain some perspective of what that means by looking at the pictures below, I think it is hard to fully appreciate the true impact it has until someone explains it to you (or to me, as John and Erin did)… NOTE: what follows is more about group discussion and dynamics than a simple “set direction” or status meeting. Think about the last group meeting you had in the typical conference room – someone presented or someone was urging a group discussion usually aided by slides or a handout. How many people truly participated? How much original thought surfaced beyond what was already on the slides? Did anyone really step up and help the content evolve? Why is that?

The fact remains that most conference rooms are designed for presentation, or are just a slightly more group-friendly version of our desks. Often, attendees are automatically in one of several modes: friend or colleague (want to be supportive), subordinate (don’t want to comment as it might be seen as criticism), boss (concerned about steering conversation in one direction over another). To make matters more challenging, it is not easy to share “rough” or “unpolished” thoughts – imagine going to the whiteboard (often at the front of the room) and sketching some doodles trying to explain your thoughts right next to the projected presentation that someone has spent the last month making perfect? Even if a few participants do manage to overcome the typical barriers, do the majority of people contribute? Likely not, and that means we are nowhere near our innovation capacity.

NEW DEFINITION ALERT!

Innovation Capacity: the total number of creative minds in a given setting… addendum: EVERY person has a creative mind, but some have yet to be “unlocked”… addendum2: all human children start out with a completely unlocked creative mind, but are slowly taught to keep that dangerous thing under lock and key with only scant visitation rights

So what are some of these powerful environment considerations that you can (hopefully) see in the pictures?

Nothing too rigid

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Easily movable parts (chairs, tables, walls, whiteboards, etc.)

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Looks like a work in progress

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Whimsical additions that can be used as aids

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Lots of medium upon which to sketch (ideally, easy to erase as well)

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An area for building prototypes (both tech and physical)… more to come on this topic in the next blog post

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A “reset” guide for when done using the space – essentially how to clear the canvas

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Having seen all these elements in sum total, I can definitely see how they collectively add to the feeling of “creative confidence” (Google it) that Design Thinking encourages.

Does this mean our usual corporate working space needs to go the way of the dodo? No, but it certainly does open up some valuable lessons about what we can do different if we are actually trying to encourage innovative thinking. In fact, based on what I saw first-hand at Stanford, I would strongly endorse that EVERY company interested in thriving in the 21st century and beyond should dedicate some of its current facilities to the ideal innovation environment principles. It can serve as both a training facility and as an innovation-focused conference center. It can also serve as a model of what to strive for if those perfect circumstances cannot be replicated in total – we actually “morphed” a traditional conference room into something more conducive by applying some of these principles.

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Departmental Innovation – Big Change, Tiny Footprint

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One of the concerns we have heard time and time again when discussing innovation with established companies is the resistance to change from other areas of the business. Sure, the department or business unit would love to try something different, but they are convinced that doing anything too dramatic would inevitably be crushed by some other power in the same company.

This challenge is hardly anything new, and has been a major change management concern for decades. However, when it come to business model innovation, there is a clever way to contain the magnitude of outward-facing change, while at the same time allowing for substantial change “behind the curtain.”

Departmental innovation usually takes the following form:

  • Provide something new (the “what” – usually a new offering or service)
  • Deliver the offering or service in a new, innovative way (the “how” – ideally with an optimized business model)

It is critical to recognize that BOTH are equally important to ensure full value delivery to the customer / constituent group, and that both will likely need to evolve as validated learning happens. That said, of the two forms, the department has most control over its own business model, with limited external stakeholder interference. So how then can a department contain the amount of change associated with the offering itself?

Simply put, don’t try wide-scale rollout all at once. Instead, leverage the “wedge” principles – find a needy segment with truly underserved opportunity and one that would likely sing your praises should you succeed (see “The Wedge” post here for more details). Let a small success story be your momentum builder, while keeping the amount of stakeholder management very focused on just that initial segment… there is no need to convince everyone across the enterprise all at once that your new innovation is worthwhile. Then, let your first few successes be the mechanism through which you turn the tide of enterprise thinking.

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Bottom line, departments within a large structure DO actually have the ability to innovate, and innovate substantially. But, do it smartly, where the biggest change happens behind the scenes. The “external” footprint starts small and only expands with success as its driver.

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The Wedge

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Assume the following:

  • New innovation idea has been qualified, with clear value and growth hypotheses
  • Target customer segments have been identified
  • The business model has been designed to support the optimal delivery of the idea
  • Innovation accounting principles have been employed to determine the appropriate metrics to track

Now the challenge becomes how to validate the idea (WHAT) and the business model behind it (HOW). Enter the “Wedge” approach to experimentation and deployment…

Wedge

Much as the name implies, a wedge approach to experimentation starts small – you insert the tip of the wedge where it is most likely to have positive effect (e.g. the door jam, or parallel to the seams in a log). In business terms, pick a customer segment that has the most underserved opportunity, and ideally is one that could have ripple effects across other segments when these needs are met. Put another way, pick a high-profile segment where success is very likely to build momentum.

It is rare that an actual wedge reaches its ideal state without a few taps – the experimentation version of the wedge works the same way. Given that this is early stage experimentation, start by validating the fundamentals of the idea – the value and growth hypotheses – with direct segment interaction. Note that traditional metrics (e.g. profitability, growth, retention, etc.) are NOT relevant for this early stage. Assuming both can be validated, then progressively add more detailed idea validation with the target segment, making adjustments at every stage based on validated learning. The key principle to abide by is to front-load the biggest, most uncertain assumptions early in the experimentation process. Using Ries’ Minimum Viable Product (MVP) principles is an excellent way to put this theory into practice (see illustration below).

MVP Illustration

So assuming the commercial viability gets validated, and now the time comes to deploy… what do you do? You keep using the wedge approach! This method is just as relevant for deployment as it is for experimentation.

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