Phil Hauck's TEC Blog

Sunday, March 21, 2010

A Great Innovation Process ...

Paul Lemens, Director
UWGB Institute for Entrepreneurship & Innovation
Business Assistance Center Presentation Mar. 16, 2010

The Innovation Process

Paul’s presentation went extensively into what innovation is all about, which we will cover below. However, these are his critical insights:

• Innovation is increasing the utility of the product/service so as to create higher value for the user and economic rewards for the provider.
• Innovation can change the marketplace, creating new winners ... and losers.
• All Value Starts with the End User. So, start there. If you lose there, nothing else matters ... so improve there, and protect there. If the End User is solid, innovation at other places in the Value Chain (from raw material to installation) is positive.
• It can be Incremental/Sustaining or Disruptive.
Incremental/Sustaining is Improvement of the existing offering, or Evolution of the existing offering to a new level.
Disruptive is an Invention (something new), or a Game Changer, transforming how the consumer or company does things.

• To be Disruptive requires ...
New Knowledge and Categories, and a Broader Context and Understanding. Think Broadly!
Worse product performance ... KEY. Most innovations create new opportunities at the lower end of the marketplace where there are lots of users and little technology. If you’re the market leader, proactively protect the bottom end.
Less expensive, smaller, simpler.
Almost always EASIER TO USE.
Appeals to a niche customer base.
Technology used is not an immediate threat (but will be!).

• The Process:
I. Get Smart ... Know the market thoroughly.
II. Understand the End User, those who will be the final buyer/user.
-- In addition, know thoroughly your customer (e.g., Walmart).
-- Know where the problems are.
III. Identify Opportunities. Needs. Are they big enough?
-- How to Uncover User Needs. Look at length at each of the Four elements of the Human Experience around use of the offering: Activities (Do?); Artifacts (With What?); Actors (Who?); Atmosphere (Where?).
IV. Brainstorm Solutions.
-- Identify problems/needs, and opportunities.
-- Stay away from product features; stay at the Benefit level.
V. Create Concepts ... continuing with the solutions/ideas from IV.
-- Draw pictures. -- Create a “war room.”
VI. Create Solutions and Refine.
-- Quick and dirty. -- 3-D Models. -- Involve users/customers.
VII. TELL THE STORY. “A day in the life ....” How will lives change, get easier?
-- Develop the Model.
VIII. Prototype.

Other Insights:
• Innovation is about People ... fulfilling user needs.
• Major innovations result in new Business Models.
• We are all born creative, but we “unlearn” as school teaches us science and math and logic.
• Think about the World. (What did you see: Globe? Map? Diverse Cultures? Environment?)

• Who invented the ubiquitous Fridge Packs for soda and beer we buy these days? (Alcoa!)
-- They did an ethnographic study of the life cycle of the product from beginning of creation thru delivery thru use and disposal. They looked for “Where are the inconveniences?” Where does usage slow down?
-- Coke increased sales 10%(!) by adjusting the packaging to usage, not from any change in the product itself.

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