innovation playground Idris Mootee

Now everyone can do web mashup - Thanks to Microsoft Popfly

Microsoft just announched a new web mashup tool for people who cannot write a line of code. Interesting strategy...  going after non-consumer..much like Nintendo Wii going after non-gamer. The hosted service Popfly is now in alpha testing, it gives everyone a visual way to add features such as mashups to blogs or websites. Popfly includes a builder tool that allows people to create an application by drag and drop. These "blocks" represent tasks or services, such as a widget that adds a video clip to your blog etc. It is as easy as ABC (The service itself is written using Silverlight, Microsoft's browser plug-in).  The idean behind Microsoft's decision to create Popfly was that it wanted a software development tool for nonprofessionals. This is a key innovation coming from Microsoft and will be part of a  movement of a new Microsoft stratgy to go after general consumers. This is a new game.

MSN Master Degree in Social Networks (Major in MySpace)

Social networks such as MySpace, Facebook or Youtube are part of many everyday's life. Web 2.0 is so overhyped and one may not be so sure to as what it means. There's evidence to prove that it's going mainstream is that now universities are starting to offer for-credit academic classes on subjects related to social networking and social computing. At the University of Michigan, there's now a new graduate program in social computing:

"After years of worrying about how much time freshmen spend on Facebook, schools are incorporating the study of social networking, online communities and user-contributed content into new curricula on social computing. The moves, like other academic expansions into fields like videogame design, are part of an effort to keep technology studies relevant to students' lives – and to tap subjects with entrepreneurial momentum. Yahoo! and Microsoft are among the tech companies that have invested in schools' social computing programs."

The Wall Street Journal points out, it's not just students who are demanding new courses covering topics such as Facebook, You Tube, MySpace and Second Life -- a growing number of researchers are trying to build their academic careers on their ideas and knowledge of this subject."

In an interview for CIO.com, even Harvard Business School CIO Stephen Laster talks about the future of Web 2.0 and he's very bullish about the collaboration opportunities created the growth of virtual communities online:

"I'm excited about the evolution of virtual communities and the technologies that support them. We've moved from the idea of a community as a discussion board to a suite of synchronous and asynchronous technologies woven together that gives you social presence and allows you to find trusted people and content. At HBS, we're trying to figure out how to bring together a Skype, a LinkedIn, some SharePoint sites, and get really good at integrating incomplete solutions in order to arrive at a very powerful notion of community..."

Expect to see someone with a MSN (Master of Social Networks) degree in their resume. I assume the thesis will be written on Facebook and oral citation will be posted on YouTube.

(Diagram: Interactive Story Map, Semantic Studios)

Ethnography practioner's insights

Here is an interesting post on ethnography (This Blog Sits at the Intersection of Anthropology and Economics). Grant McCracken identifies some of the key success factors for an ethnographer:

- humility, empathy and patience

- the ability to draw a respondent in to the interview

- the ability to identify the best approach at any given moment (aka working well on the fly)

- the ability to "shift frame" to see the significance of what the respondent is saying; this reminds me of the point I am always making about how context can inspire customer insights

- the ability to follow up and drive the intellectual inquiry without losing your place or failing to be in the moment and listen

These are good insights that every designer, usability strategist and creative director can use.

(Image: Social Technologies)

Here is an interesting post on ethnography (This Blog Sits at the Intersection of Anthropology and Economics). Grant McCracken identifies some of the key success factors for an ethnographer:

- humility, empathy and patience

- the ability to draw a respondent in to the interview

- the ability to identify the best approach at any given moment (aka working well on the fly)

- the ability to "shift frame" to see the significance of what the respondent is saying; this reminds me of the point I am always making about how context can inspire customer insights

- the ability to follow up and drive the intellectual inquiry without losing your place or failing to be in the moment and listen

These are good insights that every designer, usability strategist and creative director can use.

(Image: Social Technologies)

Here is an interesting post on ethnography (This Blog Sits at the Intersection of Anthropology and Economics). Grant McCracken identifies some of the key success factors for an ethnographer:

- humility, empathy and patience

- the ability to draw a respondent in to the interview

- the ability to identify the best approach at any given moment (aka working well on the fly)

- the ability to "shift frame" to see the significance of what the respondent is saying; this reminds me of the point I am always making about how context can inspire customer insights

- the ability to follow up and drive the intellectual inquiry without losing your place or failing to be in the moment and listen

These are good insights that every designer, usability strategist and creative director can use.

(Image: Social Technologies)

Is iPhone a killer strategy for AT&T or for Apple?

So far surveys show that AT&T stands a pretty good chance of stealing customers away with the rights to sell the highly desirable iPhone. Two-thirds of mobile-phone users who are interested in purchasing the iPhone aren't AT&T customers but willing to switch carriers to get this, according to a survey in May of about 11,000 cellphone users by M:Metrics Inc., a research firm that tracks wireless industry trends.

Now who is seeing trouble? The carrier with the most to lose is T-Mobile, according to the survey, with 12.5% of its customers expressing a high interest in the phone; followed by 8.1% for Sprint Nextel.; and 6.7% for Verizon. T-Mobile is seen as especially vulnerable because it has a high share of users in the 18-to-24 age group, and many of them are core targets of iMac and iPod.

The market is big and attractive. About 19 million people in the U.S., or roughly 9% of cellphone users, are highly interested in purchasing the iPhone, even they know it will cost them $499 or $599 to get one and need to be an AT&T customer. The current defined price points are definitely a barrier for many and a hurdle for Apple if they want to move 10M units, but Apple has some flexibility to lower the price once they scale up production. The 10M goal is in 2008, and by the end of that year, I assume there will be new devices being introduced (may be iPhone Junior or Nano, say at a $249 level) and price points for the two original models may eventually be lowered to $399 and $499. Some analysts are saying that by 2009 Apple will be shipping 45,000,000 iPhones. 45 Million!! That's 10 Billion dollars of revenue. Just making a quick calculation of share price. That's a test of faith.

Don't expect the competition to just sit there and watch. Samsung and LG, among others, are very aggressive and will launched dozen models of touchscreen phones. Sure they won't have the cool design and the features of the iPhone, but they will compete with other new features and aggressive price points which will force Apple to lower prices. Not a bad thing for us. So the question is will iPhone become a game-changing success story that can sustain its premium price and volume demand or it will become another Newton. Speaking of Newtons I still have mine sitting on my desk and I now use it as a paper weight.

Are you jumping on the ethnographic bandwagon?

Marketers need to accept the fact that we live in a world of product and channel proliferation where we already have served nearly every need several times over, where there are over 100 varieties of bottled water, over 50 different features available in celll phones and 10 ways to purchase a pair of Nikes. We need to abandon the simplistic notion of the simple need-fulfillment paradigm. The complexities of today’s consumers can no longer be measured in terms of a set of attributes, product or brand attributes, features or performances that need to be fulfilled or exceeded and that ensures product success. This is the path to commodization. Market research and focus groups aren't telling us anything we don't know. We must drop the notion that consumers can tell you what they want.

The answer to this is ethnography. A recent Business Week article has brought Ethnography out of the shadows. We see many marketing companies will join the "ethnography bandwagon" and dilute the method the way they’ve diluted focus groups and other research methods.  What is ethnography? Ethnography is a form of research focusing on the sociology of meaning through close observation of sociocultural phenomena. Typically, the ethnographer focuses on a community (not necessarily geographic, considering also work, leisure, and other communities), selecting informants who are known to have an overview of the activities of the community. This process is intended to reveal common cultural understandings related to the phenomena under study. These subjective but collective understandings on a subject are often interpreted to be more significant than objective data.  Ethnography-based innovation opportunity discoveries are often very powerful. These observations can then be used as a basis of brainstorming sessions to allow the marketers to arrive at a solution that uses the habits existing on one hand to resolve the problems persisting on the other. We have yet to see how digital technolgies can allow ethographic research to be performed in a more effective manner.

Five things a company can do to unlock creativity

I received an email from a friend and she asked me what iare the top five things that a company must do to unlock their collective creativity and boost their team innovation productivity. This is my response:

(1) Set up dedicated workspaces for idea storming ( it needs to be colorful, spacious, with modular furnitures that are movable and with plenty of drawing space;

(2) Get rid or boring formal titles. They don't mean much these days. Go for creative titles that help people to become more who they want to be. Creativity over authority.  ( Thanks to Doug Green as I left this one out in the orginal post )

(3) Develop several informal creative communities (hot teams that are formed around special interest) that blurr boundaries between business minds and creative minds;

(4) Develop a language (visual and verbal) for innovation (needs to be invented by the creative class);

(5) Train the larger team about the art of story-telling (prototype drama);

Apple and the Art of Innovation

The current issue of The Economist features a story on Apple and the Art of Innovation which is a very interesting read . It talks about Apple's four important lessons to teach other companies about innovation. First and most importantly, companies need to dispose of the "not invented here" mentality:

"The first [lesson] is that innovation can come from without as well as within. Apple is widely assumed to be an innovator in the tradition of Thomas Edison or Bell Laboratories, locking its engineers away to cook up new ideas and basing products on their moments of inspiration. In fact, its real skill lies in stitching together its own ideas with technologies from outside and then wrapping the results in elegant software and stylish design. The idea for the iPod, for example, was originally dreamt up by a consultant whom Apple hired to run the project. It was assembled by combining off-the-shelf parts with in-house ingredients such as its distinctive, easily used system of controls. And it was designed to work closely with Apple's iTunes jukebox software, which was also bought in and then overhauled and improved. Apple is, in short, an orchestrator and integrator of technologies, unafraid to bring in ideas from outside but always adding its own twists.

This approach, known as “network innovation”, is not limited to electronics. It has also been embraced by companies such as Procter & Gamble, BT and several drugs giants, all of which have realised the power of admitting that not all good ideas start at home. Making network innovation work involves cultivating contacts with start-ups and academic researchers, constantly scouting for new ideas and ensuring that engineers do not fall prey to “not invented here” syndrome, which always values in-house ideas over those from outside."

Innovation Summit Presentation - Miami 2007

Innovation is a hot topic and there’s no question about it. It's now on the agenda of every senior executive. I was speaking in Miami this week in a summit to demystify this subject. People often equate innovation with creativity or novelties, but not seeing it from a business strategy perspective. Innovation strategy models often follow an uninspired formula - let's encourage employees to come up with some creative ideas, conduct a few focus groups and voila! We have an innovation strategy.

It is extremely common for organizations and consultants who believe in innovation starts from a product. The question is 'what is a product anyway'? There are those who believe that there is no formula to make innovations happen, it is all about creativity, but that’s not true. “While it is true that innovation is not the product of logical thought” as Einstein put it, “the result is tied to logical structure."

So what is an innovation strategy? At the very minimal your innovation strategy model must allow you to do the following:

1.      - It allows you to explore the changing landscapes (convergence, market shirts, discontinuities and technology disruptions)

2.      - It allows you to identify customer unmet needs or explore non-consumption (through journet mapping, obervational research and other ethnographic exercises)

3.      - It allows you to open up your opportunity horizons

4.      -  It allows you to link ideas to economic value.

5.      - It helps to create multiple scenarios for the future.

Inn Innovative leadership means navigating and opening undefined pathways through the boundaries you operate within or prepare to expand into. First you must decide on your innovation posture (see my presentation below). It also requires innovative leadership to use one of these models to fully leverage the many strengths of their available human capital assets - intellectual and physical assets, production and social assets, capital and developmental assets. As Drucker puts it "Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth”.

Large companies will continue to struggle to innovate and end up writing big checks. Economist Joseph Schumpeter foresaw that organizations cannot easily forgo the products and processes that brought them great success and eventually get stuck. As I told the audience in all my innovation keynotes ”The biggest enemy of innovation is size.” Large companies with their vested interests and huge market investments (to achieve scale) will simply not be as agile as smaller maybe even “open source” companies in delivering new ideas to the market in a speedy manner.

Microsoft, Yahoo and Sony are all good examples. They are all standing on weak legs. Take Microsoft Vista for example. Avalon/Windows Presentation Foundation is really a mix of MacOS GUI features, Mozilla XUL, and lots of Xerox Parc. .NET is Sun’s Java and Jini plus Bell Labs substantial language framework innovations. Expression Suite is an acquisition. Yukon/ WinFS bares amazing resemblance to SQL Anywhere. Hotmail was an acquisition. Finally, most of the key clustering technology - its Open Source. Despite all the resources and amazing teams of top tatents, innovation for Microsoft is a serious challenge. I'm trying to think of a few innovations that come from Microsoft that achieved moderate success.  Can you?

Marketing 2.0 and Five Key Trends

The proliferation of brands and channels and fragmented media is forcing companies to rethink their marketing strategies. Proliferation is happening all around us everyday and I am watching the growing fragmentation of customer micro-segments. Social media has allowed the mushrooming of micro-communities everywhere. Intensifying competition and corporate desperation for growth together with the supply and demand chain innovations have encouraged today’s companies to target ever more demanding customers within ever smaller segments. The product, pricing and service options available to customers of consumer industries have grown significantly, from packaged goods to financial services, with the exception of a few (home furnishings is one of the few exceptions). All of these factors have dramatically driven up the complexity and cost of marketing while boards and CEOs are pushing their CMOs to improve the return on marketing expenditures. No wonder many CMOs I talked to said that a major restructuring of marketing models is imminent.

In this crazy business environment, marketing is ready to be reinvented. No one is sure to who is taking the lead to drive this change. Collectively ad agencies, media owners and clients have no clues about what's next (Meida players are the worst). The revolutionary and disruptive impact of emerging technologies is creating new behaviors that drive marketers crazy. From TV prime time to YouTube and from advertising to advocates.  Where is marketing going next?

The internet, cognitronics (building an interface between the brain and the computer) genotyping  (classifying population segments based on genetics) and biointeractive materials (high technology sensors for living systems) are just some of the developments, which will be next to create a profound impact on marketing. They demand our long-held assumptions be challenged and re-examined as the quiet revolution turning into a tsunami.

The sad thing is that many marketers and their ad agencies still consider their discipline as just a series of tools, processes and techniques and the output is some striking visuals and a set of messages. They are so behind-the-curve. They need to know that we now live in a Google-Youtube-iPod-iPhone-MySpace-eBay-Flickers-Twitter-Walmart world.

Here’s what I think will be the key trends that further pushes marketing to the edge (not in any particular order):

Virtual Corporate Personality - For years, large corporations have been trying to act as big corporations and becoming more and more “faceless”. The need for organization to have a “humanized” face (or interface) and touch is becoming important. This is not just about executives’ blogging, it is about putting a face and brings this face into the virtual world. I have been thinking a lot of about this and I have some interesting ideas.

Private Search Network - The personal media revolution results in exponential increase in the amount of consumer generated content.  This leads users to search beyond the algorithm for new ways of searching what they need beyond just text and images. A method for this is collaborated social search, where people are sorting content on the web, creating their own groupings and sharing that with others. As a result of that you get Private Search Network which you need to be a member or be invited to get access. Marketers may have to pay to get access to these groups.

Widget Everywher Marketing - Widgets will becoming a new marketing tool as it is an effective way to add value and be able to link it to some marketing messages or simply create a service. As more and more new technologies will allow open participation for anyone who wants to create a widget. (Facebook is taking that approach and many will do the same)

Automated Tagging – One day almost everything will be tagged and tagging will become more sophisticated. It will extend into products and services and even customer testimonials. Or even product origins or usage etc. The task of tagging will be automated and that will create a new level of challenge and opportunities for any search engine. I have seen a few interesting business plans from VCs of this idea last few weeks.

Social Media Optimization - SMO is slowly evolving into a movement in the online world.  Primarily being driven initially by those search marketing folks, I think SMO will continue to get broader use from marketers interested in building traffic as well as buzz. Optimzation and follow by measurement will be next.

I might add a few more next week.

Where is the Super CMO?

Continuing on my last posting on the “Marketing and the CMO” topic. The short tenure of the average CMO is causing many to wonder whether this is a role that is set up for success or simply many CMOs just don't live up to expectations. So what is the job of the CMO? Is that a glorified title for a senior marketer? Or is it a new role designed to bring marketing to strategic level and into the boardroom? Generally speaking, a CMO should be the middleware between the company and its customers. Their responsibilities go way beyond marketing communications and include shaping the customer value propositions and adding high value differentiations or intangibles (such as customer experience innovation or service design) to a tangible product. In that case it is a very big job that deserves to be in the C-suite. This is the job of a super CMO.

Let me try to define the role and responsibilities of the super CMO:

- Ensuring the company's products and services are in tune with consumer demand as the market shifts. It should bring the voice of the customer into the boardroom and advocate for a balance between customer value and company’s bottom line.

- Looking out into the future to identify disruptive opportunities that offer new customer value at a low cost.  Directing consumer insight mining to ensure their offering is constantly matching customer unmet needs.

- Drop the traditional marketing communications mindset and drive a cultural change within the marketing dept. to adapt to the new marketing realities that the customer is in control and advertising’s effectiveness to build the brand is limited.

- Accept that they need to be held accountable for achieving top-line growth objectives as well as customer experience innovation and other brand metrics.

The long and short of it: If a company chooses to create a position of a CMO, then the position must be invested with responsibilities, authority and accountability that befits that job title. Otherwise, is he or she is a VP MarCom?

Mich Matthews, CMO of Microsoft, recently spoke at the AAAA media conference and then was questioned by ANA CEO, Bob Liodice.  It was fascinating to hear Mich admit that even Microsoft, admittedly a prime catalyst for the digital revolution, was struggling with media innovation, trying to find appropriate marketing talent, developing a marketing process and dealing with innovation and consumer control. And how to make her CFO comfortable that the marketing spending is driving business results.

Some of Mich's key points:

-Technology requires that we innovate or die.

- We constantly have to be part of the revolution by testing, investing and experimenting.

- As far as marketing talent -- at Microsoft, the marketers have to be able to speak the language of engineers and have the "bandwidth" to deal with all of the emerging media.

- Caution to marketers who are using social networks and the like, not to use them to "market" but rather to engage the communities and enter into a dialogue with them about your products or services.

Those are really good points. She also noted that often the "small guys" are redefining industries so marketers have to pay attention to them. So you’d better watch out for the “small guys”!

Marketing and the CMO

Over the last two decades, marketers liked to believe that they have significant progress in making marketing results more scientific. Furthermore, they have tended to believe that with the advent of Customer Relationship Management (CRM) technologies, that they are building relationships with customers. This belief couldn’t be farther from the truth and the reality may be a little disappointing. The term “Relationships" has been used in marketing lexicon since the 1980s. However, there is little consensus on what that term is and what is means within marketing circles. There is an over simplistic notion that if we treat our customers well they will return, again and again, and that’s what customer “relationships” are all about. Well, marketers couldn’t be more wrong about this. Many of my CMO friends expressed their full agreement privately.

Moreover there is little common ground in marketing circles on how marketing is defined and the process involved in deploying the marketing function. What is marketing? Is it a common set of goals put into action through a process of marketing analysis, strategic decision making, formulation of tactical marketing mix programs and operational feedback and controls? So what exactly is marketing?

The practice of marketing should not be confined to any one discipline; it actually lies at the intersection of five disciplinary areas: corporate strategy, economics, consumer behavior, design and technology. In strategic terms, the practice of marketing, is focused on the firm’s strategic intent, its growth requirements and appetite.

In economic terms, the practice focused on the demand side of strategy. In consumer behavioral terms, it is focused on the customer side of strategy. Because of this focus on the demand side and the concern with the customer environment, “marketing strategy” has a more specific meaning than” business strategy” or even the broader concept of “corporate strategy”. Similarly, it has a somewhat different meaning from “competitive strategy”, which focuses mainly on the industry structure and competitive dynamics. In design terms, marketing is incorporating design as part of strategy and thus far in the industry, there is little in terms of framework or tools available to facilitate the interdisciplinary bridge building that successfully combines the economic logic and customer behavioral logic. This is drastically different from the logic of industrial economics, which the competitive strategy literature of the past decade is built upon.

Some even ask whether marketing is dead? Moreover, there is a general disillusionment with the inability of even of senior marketers to deal with the business realities of the day. They are often accused of not understanding the economics of the business or different channels of distribution or of emerging disruptive technologies. Many marketers are not equipped to take on new challenges that include creating experience-based differentiation and branding in a cross-medium network environment. There is no leadership in the industry anymore; in ad agency, media and marketer worlds, few dare to stick their necks out, stand up and be counted.

The consumer has far more control than ever before. Successful marketers will have to learn to listen and participate in the conversation that surrounds that control and put the bullhorn in mothballs. Emerging technology will provide us with an infinite number of new opportunities to be innovative and creative from an experiential marketing perspective. We cannot even begin to comprehend the extent of change in the industry, as Google and Microsoft completely alter the advertising value chain.

John Hagel, an independent consultant and author, while addressing a CMO Summit in New York pulled together a number of themes from his speaking notes on where marketing is going. Here’s from his notes:

Redefine marketing strategy

These shifts have broad implications in terms of marketing strategy, branding and marketing performance metrics. To start with marketing strategy and again at the risk of over-simplification, conventional marketing is built upon the three “I’s”:

Intercept – target and expose customers to your message wherever you can find them.

Inhibit – make it as difficult as possible for the customer to compare your product or service with any other options.

Isolate – enter into a direct relationship with the customer and, wherever possible, remove all third parties from the relationship.

Actions to take: to navigate through this fundamental shift in marketing, CMOs will need to recognize that this is an organizational change challenge, something that most CMOs are not very comfortable in confronting. They would much rather design and deploy a clever marketing program than figure out how to change the hearts and minds of people throughout the organization.

John’s observation is excellent. I have often heard people throwing statistics saying that the average tenure of a CMO is 16 months. Whether it’s 16 or 24 months – it isn’t as important as what it shows us - organizations are more impatient these days. The shortness of the typical CMO’s tenure is a tangible manifestation of corporate management's frustration with the inability of marketing to provide measures that correlate to the creation of economic value let alone the inability to drive change through customer experience innovation.

The reason is that many of these CMOs are traditional marketers who are usually great tacticians. Trained for years in traditional brand management system, their primarily focus was in marketing communications activities to build brands. Many lack the strategic thinking to bring their case to executive management and even if they do, their focus is entirely on market share and not market creation. What is needed is a new type of CMO, one whose job is to be the one in charge of customer experience innovation. This CMO can then engage all functions of the organization, and not just marketing communications and advertising agencies. The CMO’s responsibility is to integrate “customer experience” into every part of an organization's process. He or she should ensure that an organization comes up with the right value proposition and delivers the appropriate experience on the enterprise level. And a big part of that is through digital interfaces and technology-enabled human interactions.

Design Thinking and Business Innovation

One of the hottest topics right now is bringing design concepts and thinking approach to business strategy. The basic idea of the design approach to business innovation is to
(i) understand the client and the "design problem" - to thoroughly understand the context and explore opportunity horizons

(ii) use a variety of creative design and user observation techniques (everything from ethnography through to visualization through to exploring scenarios) to develop ideas for newly uncovered customer unmet needs
(iii) develop, build and refine prototypes with a series of multiple iterations, to test the ideas against the customer in a real world context
(iv) leverage those ideas to change the competitive dynamics and the economics of the business

Emerging technology has changed the way we interact with everything from social interactions to productivity tools we use. Designers of interactions no longer regard their job as designing a usable interface—but as architecting and designing customer experiences. I can see a new breed of designers emerging blending a number of disciplines from interactive designs to spatial and product designs. At Blast Radius, I can see a group home grown experience designers broadening their scope of influence and thinking of “experience” from service design to customer community development.

In a new book Designing Interactions, Bill Moggridge, designer of the first laptop computer (the GRiD Compass, 1981) and a founder of IDEO, share stories from an insider’s viewpoint, tracing the evolution of ideas from inspiration to final outcome. Bill and his interviewees talked about why personal computers have windows in desktops, what made Palm’s handheld organizers so successful, what turns a game into a hobby, why Google is the search engine of choice, and why 30 million people in Japan choose the i-mode service for their cell phones. In the book he tells the story of his own design process and explains the focus on people and prototypes that have been successful at IDEO—how the needs and desires of people can inspire innovative designs and how prototyping methods are evolving for the design. This is an interesting read and you can download a free chapter from here. http://www.designinginteractions.com/download