Adding/Creating Value

Reading “Rational Optimism”, Great book if you have not, do. one theme is that individuals engaged in tech will solve problems not outside regulators.

A great section speaks of how Innovation in products as well as technology that helps those products become accessible to more through lower costs or percentage of earnings. This is the result of not investing in monetary assets but investing monetary assets in products that save people time.

Then that time is invested back into the system and the multipliers kick in! It seems though that a larger percentage of that value created is in entertainment not products, Hamburgers and Haircuts! value to see a concert adds more value than time used to do a marathon Television day!

In my humble opinion our culture is less one of learning or building than it has become about the third screen passive engagement. No I have not become that “GET OFF MY LAWN” old man. And no things were not better in the old days, but I do see a trend toward having learned and being an expert than learning and being a student.

We talk so much of experiments in product development but what is an experiment? Many times the exercise seems more to prove than to explore at and after the MVP stage. Bias is taking that third screen approach to your testing. Ask yourself what is the value you are creating and how downstream will it create time or lower costs. If we truly want to do something create for the world then we should think about quantifying that downstream value as well as what we do with the value we extract for the value we have created.  

Risk & Innovation in Dynamic Stage-Gate

CB on bridge

Innovation in any company regardless of size is about guiding and stewarding not managing a process. That said even the best start-up has an advisory team or board of investors that keep them accountable for decisions. Being lean or agile is great when the path is clear but in the fuzzy days of pivot or perish, sanity checks are critical as is being held to good decisions based on good data.

The needs of the large enterprise are structural for many reasons: revenue management, accountability, public performance metrics all adds up to managing RISK! Stage-Gate processes work at assessing and managing the risks very well in developing new products. 

Great new product processes require that the product portfolio leader can balance focus on agility, action, and other functional needs regardless of process or framework. Keeping the concept moving forward is incredibly important, but just as important and often overlooked is making sure the destination is clear.

The traditional process is often set up with strict phases of work or gate criteria that fail the disruptive ideas. How to balance risk and ensure that leanness is not lost to painstaking planning and frugality requires evolution in thinking. Phases and Gates define patterns of inclusiveness and review for the enterprise that prevent bad choices and help leverage the value of multiple domain inputs.

Stage-Gate holds up innovation only if you don’t evolve! The dynamic version shepherded by an experienced leader who understands multiple needs internally drills into concerns so that they become value adds to the product effort. We have all seen New Product Development that moves through a Gate based on executive sponsorship without critical thinking. This is as wrong-headed as any product development that does not test in the market repeatedly.

Stage-Gate manages risk in a dynamic process while promoting innovation with  accountability! Keep your Innovation Sprints accountable, do what you say, no task sliding, no rollover, just good professional behavior. Innovation or lack there off is being driven by your company culture not anything else. The Stage-Gate process is the road to delivery, test and successful launch not the problem.

Each concept is tested and along that path finds its proper place in the portfolio. Early on if concerns and ideas are added to the effort a product can be moved into a feature or extension, not all concepts belong int eh third horizon. Evaluating market integration or company integration issues can drive a pivot, uncover new go to market opportunities. Internally the phase process also alerts cross functional teams when it is critical to interject,

Many times I have seen new product concepts move right up to the end before having “small issues“ pop up, that were lost in the big gate meeting issues. Other times big projects get momentum without broader review and miss a critical market data point. Shorter issue based gates get reviewed closely and folks are more apt to interject a concern, we all have personal bandwidth constraints. Agile development teaches us that small chunks drive effective production.

Artifacts: Key to Dynamic Stage-Gate Success

It is said in the start-up world that you receive funding based on two things: First is promise that includes team and idea, Second is performance, success gaining traction in a market with your solution. This explains the labeling of Start-up early investors as friends, family and fools. In the enterprise world the early stages use executive sponsorship and sales leaders, could we use the same labels!

The need to present and sell on performance starts early in the innovation stages or as I call it Stage Zero as you interview customers about the problem and solution set you are proposing to deliver. Traction that is demonstrated in this early stage fails if it is overly qualitative rather than quantitative. Entrepreneurs make the mistake of falling in love with their solution then bending the data which only serves to create skeptics of investors. Founders bias has killed many potentially great solutions.

How to fight this? Data, quantities of process, result and decision data. Trustworthy data like this is created in real-time allowing the reviewer to walk through each day in the life of your progress. So the question is how to create artifacts that do this without hindering cadence, while delivering value to all for time invested.

I have successfully managed a few Dynamic Stage-Gate teams now and am honing in on a base set of artifacts for the process. Here are some of the ideas that are essential.

Undeniable Truths
Every great process needs a map any time line from which you can all documents off.
Framework style documents work, Frame the ideas, Frame the Hypothesis, Frame the findings
Ends statements – You can’t get there from here is you don’t know where you are and where you are going!
Decisions are derived from data not pulled out of the air so show that, If… Then… next step is….
Documents tell your story better than you then allow a reviewer to embrace it over and over again
Data works when you keep metrics that are important and constant, Sample is critical
Accountability comes from commitment! SIGN HERE!

So what I am working on
1. A time based map to hang other documents and show volume of activity that is easy to see work done
2. An overall canvas of idea, expected action and traction. The Lean canvas Rocks here. Keep every iteration!
3. Interview sheet that after 20 becomes a report from a survey tool capturing all Quantitative and Qualitative data
4. Test concept form, Hypothesis, test methodology and expected results – this does not evolve
5. Test concept Report, What happened? From that do you continue, pivot or kill
6. Overall Traction report against metrics and plan – this is the Board/Advisers one pager
7. The ask, From here based on activity we ask ____ to do ___ by (Date)
8. Commitment statement from Board and Advisers

Good luck and let me know what you would add, remember that the best story is the shortest!

Drills not holes; buying tools over results, means over ends.

I challenge the marketing adage by Harvard marketing professor Theodore Levitt: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” We buy so much more and if you drill down, pun intended, you can expand to buying a shelf or desk or place to study………You may argue latter that in all these examples consumers are buying the end product, I counter and say more today in our fast moving world we are buying the means to that ends.

So we can finally put that to rest in the grave yard of old advertising adages that no longer have merit. Besides in today’s world if I really just wanted a hole I would borrow a drill from the UBER drill lending site. I suggest what you really want to do is build!

First case is how often do you hear investors say it is all about the team. When you build a great team they can pivot and change with the market. What investors are really buying is a team that will find a way to return 10x on their money in short time. If their needs were less than they would buy other more secure investments. Investors are buying a risk return profile they can embrace or work with. Some buy friends or people, but in the end results count on that investors return.

Second case is in B2B sales where you buy tools for process and that process changes. If you buy SharePoint what are you buying? A process tool or a process? The application by its’ self is mostly useless out of the box. If you are selling collaboration software it is useless without people sharing ideas and content. Your team already collaborates and may document tat collaboration but what you are really buying is a tool that sustains that process for a given time. Tools are what you buy, what you do with those tools is amazing and hopefully always changing.

Third is consulting, you buy an end vision, an issue solved. That consulting approach of experience to teach. Here the feature function of the drill is the most important. I get hired to get Product Mangers and Innovation culture working. I know full well that the minute I leave entropy takes over and it is rare that the pending system dysfunction is not blamed on me. But at time I do get that second call to prop up the culture and those are great days. Great not for the repeat business but great in that they understand the solution is morphing as the company situation and staff evolve.

Lastly is building innovation, culture is amorphous and will add value to your offering over and over. Tools, people and advisers are drills to the companies that understand adding value over a long period of time in as many ways as possible is the core expertise required in today’s market. And customers will pay a premium for that commitment to the market and them.

Innovation process 101 – Sculpting and Smashing!

1smashedIn martial arts you use your strengths, then allow your opponent to over extend their attacks grabbing that energy for your advantage. Corporations have unique skills in building processes and analyzing markets to produce accurate probabilities. This is also the root of the “paralysis by analysis” trap. Innovation is about understanding probabilities. The key for larger companies is grabbing agility and high risk courage from the start-up while increasing your chance of success with your broad assets.

 

Corporate incubators can rapidly build and understand the processes of others, build in market factors and understand the best opportunities for innovation. There is strength in large operations organizations that is often undervalued by product groups and R&D. The challenge is how to use the strong analytical power while not burdening innovation.

 

We all enjoy creating and process teams are no different. We enforce process as a way of validating the process, good process covers all situations right. What if the creation of process is not for use but for change? What if you can build a culture in your analytical teams that is about documentation with the intent to break the existing process? I have a term for this, Sculpting and Smashing!

 

                                          Sculpting – Design and document the activity of the target segment or persona.

 

 

 

                                          Smashing – Break that process through automation and innovation to eliminate wasted                                                                                                             activity or entire steps. Basically add ease or productivity that create value.

 

Sculpting and Smashing is fun, it leads to a very full idea funnel that leads to solid innovative features and products. What is amazing is experiencing business analyst get energized. Teams often do retrospectives or plus/delta sessions without optimizing a process immediately. What if that learning can become positive immediately, what if you change the culture to one where learnings are quickly institutionalized in a positive manner then celebrated.

 

For example:

 

Culture of innovation requires, breaking down the Moonshots.

Successful work fails, great innovative companies always fail forward! Experimentation and failure is the result of taking predictive risk or as I like to say, “Thinking outside the box working inside

 

Break down the flow or your product into each area and innovate within each before bringing them together. What helps is to have first the Crazy moonshot vision like say driverless cars. Now you can break down every step of driving and automate it!

 

A recent capital equipment company I worked with was passionate about staying ahead of a market where they already lead. As the company expanded internationally the CEO and I spoke of how to build innovation proactively when the history of the company was winning through rapid response to any RFP. The moonshot thinking was complete automation, the steps were: First automated with operator, then automated with operator outside as observer, followed by automated from a distance, and lastly only to give the equipment a task then read a report of the results.

 

OK so the last two steps are still quite a bit in the future but the process accomplishes three things.

  1. Build trust in market that this moonshot is achievable in steps. Building trust is important for the partnership with the market.
  2. Take steps that you can achieve that build confidence in your own capabilities, learn, and fail forward at a reasonable pace.
  3. Be agile to changes in the market, in technology and the Moonshot goal itself.

 

We followed a hybrid IDEO/Blue Ocean footprint by breaking down the core product into the various systems, Mechanical, Fluid, Control, Power Systems, Usability and finally company support services. Taking a look at all the systems they begin to optimize, (Sculpting and smashing). The customers were excited about each idea however they had expected incremental innovation from the company.

 

Where the market sat up and applauded first was on the company services improvements. Not to say they were insufficient but the market just shocked to see them step in and listen to their customers business issues and be willing to be a true partner. The back story on this innovation is that a customer service agent speaking with a customer captured a comment about the equipment being like his new car and send him an e-mail on how it is.

 

In a market where the pain of downtime is great and a product already outfitted with sensors only connected to the operators’ panel it was a simple task to have a capture of sensor output and use data sent. Customer reaction was overwhelming. Users would pre-order warn parts and be confident planning big projects, now the company was building a trusted relationship based on data sharing. The camel’s nose was under the tent, the first step to the moonshot.

 

The opportunity would not be identified without understanding how the market consumes the product, understanding the wear cycle of parts and pain of the customer. All this through the data and experience of an established producer with a focus on innovation and optimizing patterns.1smashed

The Value of Competition

I have shared before my belief that if you have no competition you have no market. Competition makes us smarter in everything we do. We get better as we are challenged and if we are willing, as we watch others react to ideas or influences in the environment.

Environmental impacts are happening everyday with every new thought, work around or impact. Everything impacts the market from ideas to investigations to innovations in parallel markets.

Just looking at a market affects the status actually, your focus group has started water cooler conversations, your test documents or interface gets others thinking.

Competition is not always another company but an idea. A recent product I built impacted my other consulting work as the teams moved from a concept and framework to online tool that captured everything their collaboration changed.

Now ideas were captured, some slowed down on sharing, others stuffed the idea box to get noticed. Open sharing became a liability and political tool. The effects are just now beginning to soften however the cultural impact has a legacy. Introducing new ideas changes the market if only for a moment.

Your competitor could show the market a new prototype that sucks or rocks, that will affect you if you are also picking or if you are the current vendor. How are you built to respond? Are you snapping your head to change? Are you ready to fast follow?

New competitors are an opportunity to respond and deepen your conversations with your current customers. To many time I see the sales knee jerk to “they saw this and we need that!” Wrong it is time to sit again with your customer and in context uncover what they found interesting or valuable. Large companies think they can lead a market and often leave room for an agile sharp firm to innovate and create new intimacy with your market. Do not be afraid of that intimacy, embrace it! Few Do!

Your Sample Value and “Bar Talk”

Professional focus group facilitators call it various terms like group think. When I was tending bar in NY putting myself through school I listened to folks in the bar pass around ideas or observations that spontaneously became facts.

How are you evaluating your UX or features? How big or diverse is you sample? Is your success with you MVP based on two very loyal early adopter friendlies?

There is a very trusted UX application vendor who I like but often tests in coffee shops based in a very technical town with an average age of 28. Not very diverse and a sample that thinks they are smarter than whomever developed the app. The result is predictable, ever first evaluation shows significant would needs to be done and guess who helps them out.

This is not planned fraud but also not a faithful review. We all have done it, just last year I had a board application I did used by three boards that already were using the governance school that I based it on. My MVP test was great but the market for the application was limited to Boards that already were faithful to a school of governance, the mass market potential was very limited.

Coffee shop or bar talk is limiting, like minded talk like minded. Courage is to stretch outside and broaden the scope of your sample. Broaden it in ways that define new personas both by demographics and technical perspective. Technically there are users of a competitive product, non-users you need to convert and technical phobic or friendly minds.

This is stuff that makes sense and we all trip up on. Testing needs to be robust, samples need to me deep and diverse. Testing both market and pressure is always the first thing deleted from the project plan when time lines compress. Just don’t do it!

Your Data? Really? How are you using it?

The challenge of protecting your data is real, who are we protecting it from? Where is it actually? Can I see it or review it? What good is all this behavioral data about me in the hands of only those trying to sell me?

I have worked on many financial industry mobile and data applications for a number of reasons. Data on these services is gathered and in the hands of the user. Perhaps that is one of the reasons that outside of media, banking/trading apps are the most heavily used and valued by their users.

While I am grateful to the upsell/cross-sell suggestions from companies mostly on books that profile data on me is not anything I see. Could they market better if they allowed me to adjust that data?

For the last few years I have worked with a number to start-ups in the medical IT space, Mostly records and devices that collect data on my health and physical activity. The number of web services for weight management alone is impressive but not surprising considering the spend in the US in that segment.

But here there is a disconnect between Data that I put into a service and my healthcare data due to fears and regulation. HIPAA protects us from those who would use our confidential data to market to fears and emotions or those who would expose details we would rather keep confidential. Part of me asks what is the difference between healthcare data and my banking of trading data?

Payment info seems to be hacked regularly these days and yes if your HIPAA data was out there or in your control it would be hacked also. As the old saying goes there are two types of data, that that is hacked and that which will be hacked.

To draw a parallel to banking data where studies show that younger professionals with little savings or banking relationships have low concern about data breaches while older market segments that have savings/investments or are seeking loans have high concern. Those with ongoing health issues or preexisting conditions will have more at risk from data breaches but I can only imagine have more to benefit from control and awareness of all their medical records.

From my perspective as a health engaged person with no real health issues I want my data and I want all changes or questions about my health data reported to me. I want to be able to show directly my record to a care provider the same way I show financial data to a new advisor. And yes it is all about my needs, I am the customer!

My health and body is not unlike a machine or production line, MRP data from the factory floor does no good if I can’t monitor trends, look at production data, review sensors. Perhaps a little over stated but not for long. Sensors and the data they return on your body functions are evolving at amazing speeds. People are interested in knowledge they have had held back for years.

Doctors and care providers in days past were thought brighter than others, not so much now. Yes the percent of the population that is interested at this level is small until you reach the segment that has ongoing critical care needs. Today user friendly applications on your data can help you track your health issues or share your healthcare data directly at your discretion.

Your data should be yours to share, review, monitor or discuss with whomever you wish in a manner of your choosing.

Connecting Goals, Team, Individual, Company, Customer

When is a road map more than a list of features? When it is connected to people! Yes all features come from problems in the market that our customers have, it is also connected to a persona that an indiidual customer may represent.

The afterburners of excellence comes when Product leaders connect those features to team goals and individual excellence that all roll up to the company vision, mission and goals. Vision and mission statements are living documents. Not in terms of change which should happen in a considered process only but in terms of being owned by everyone and held in their role or tasks every day.

It is common for the team to produce goals or missions then leave them on the wall never to be thought of again until review cycles. Forbidden is to extend them to your customers but that is also a great place for them to be shared, a great test by the way of how internal or market focused those goals are.

Today we talk about team in a politically correct manner over the individual accomplishments. High performing teams understand that “Teams” don’t accomplish people do. People are supported in their teams not able to do much without others but when the rubber hits the road there is a person that picked up that task and delivered it through whatever means.

I have built many high performing teams that in a few cases delivered just unbelievable solutions. All these great teams celebrated the individual who “Pulled it through” not selfish about the parts they help with, understanding that their turn will come.

Celebrating the individual attachment to goals is powerful to make the accomplishments and vision statements real! Do the roll up with your team at the start and close of each effort. It is in the human nature to need a tactile real world connection of their work with the greater vision. Leaders make this connection and strengthen their teams to connect the dots.

Compliance and Regulation, the scary words

Random thought

For a few years I have been working with more regulated markets from Medical to Data. There are two powers that drive compliance: first is from the government that is either protecting others or engaged in behavioral modification efforts of some sort, the second is from lawyers in civil actions.

Not sure which of these carries more emotion or risk. Traditionally unless the error was so grievous the government would slap wrists and bank accounts then move on, there are more social downsides now and they are reacting to minor errors. The legal penalties from tort and civil law suits can carry judgments that end companies.

So what is compliance? Simply put you are showing that you are doing what you have agreed to do or the government has asked you to do business. Following processes and keeping records. Regulations are the way a government asks participants in certain markets or activities to act that protects others.

We use compliance in areas as a label or our processes and procedures. Ways to teach many how to handle an event. Processes are essential to maturing on the business lifecycle and compliance to policy or process allows an entity to scale. Great policy or process has exception clauses built in that enable action so the process can keep running while addressing new information that did not fit. Think Six Sigma!

Great compliance tools are flexible like great processes but keep records of history and why they may have changed. It is so difficult to review change when no one documented the drivers of that change, Ugh! Tools are just now coming to market that meet these requirements, software that supports business rather than requesting business support it!

While I am many other would like freer markets less encumbered by regulation that is simply unrealistic. Regulation like taxes do not get rolled back! They may morph and expand, even consolidate but rarely eliminated and that in some cases is ok. The way forward to eliminate regulation is innovate around it, change the base line, obsolete old methods.

Recently the “Sharing Economy” has begun threatening regulations in the Taxi, B&B and other industries. It is the regulators time to evolve or become irrelevant. Great innovators don’t fight they change the game. Technology is the key to moving forward, in any industry there is a bell curve of players, some great, some problems.

An old science adage is “the solution to pollution is dilution”, so wash your eye out if something splashes in it. The concentration is lowered the risk or damage with it. More innovation will destroy the regulatory contamination of the past and social media will enable the world to choice the better players.

Yes we have so much information now about bad actors in society from the local criminals to the psychotics beheading others in the Middle East. This information though can be used by the local communities to regulate or eliminate the bad actors.

Consumers have this same power with bad actors in the Sharing Economy. The risk is silence, the risk is no history or documentation. Use the community to change the world but understand expected behavior then what went wrong so other learn. Not the work here of governments but the wok of communities. Communities rightfully do not trust governments, critical thinking is on the raise. We are a data based culture and our memory is long when we consult data not spin.

s!