2009 Trends Map
People keep asking me for a roadmap for next year so here it is!
http://nowandnext.com/PDF/trend_blend_2009_map.pdf
People keep asking me for a roadmap for next year so here it is!
http://nowandnext.com/PDF/trend_blend_2009_map.pdf
I’ve just been reading some nifty new stuff by Tom Peters. One of the big trends that I keep telling people about - but to almost no effect - is ageing. Fortunately Tom gets it. Here are a handful of statistics from his book on trends.
“In the US between 2002-2010 the number of people aged 18-44 will decline by 1% while the number of people aged 55-64 will increase by 47%”
“Americans aged 50+ hold 70% of global wealth and the average net worth of a household headed by someone aged 55-64 was $120,000 compared to $7,200 for people aged under 35.”
So why is only 5% of ad spend in the US aimed at people aged 50+? Answer: Because ad agencies and marketing departments are almost exclusively staffed by people in their twenties and thirties and forties.
This isn't quite so true with innovation but it's not far off...
Given that most of the mess we’re currently in was primarily caused by certain financial innovations, perhaps now is a good time to consider whether some innovations really are a good idea.
In my experience a great many so-called innovations are actually nothing of the sort. I’ve even seen products being sold as ‘innovative’ simply because the product now comes with new packaging. If the pack is an oil can that comes with a no-spill pouring spout then this might be true, but most of the time the ‘innovation’ is meaningless and does not satisfy any real need.
Other 'sub-prime' innovations in my Innovation Hall of Shame include endless flavor extensions (that usually last less than six months) and pointless new model changes to otherwise perfectly designed products (thanks Detroit).This is a shame because if the word innovation is over-used or wrongly attributed it makes innovation meaningless.Given that we are already suffering from over-choice in most markets perhaps a better idea would be for someone to say no every so often. Heck, I think a great innovation would be for companies that have a VP of Innovation to appoint a VP of No that can veto some of more silly ideas.
Sometimes the best thing that you can do is nothing atall.Actually I rather like the idea of an innovation Hall of Shame. Any ideas about what (or who) should be in it?
Eight years ago I did some work with a chemicals company. One of their divisions made paint and wanted to invent a framework for innovation. One of the things we did was get into bed (not literally) with the customer complaints manager. We figured that what people complained most bitterly and most frequently about was probably an area where innovation should be pointed. A few years later one of the products that came out of R&D was a white paint that told you about which bits of a (white) wall you’d forgotten to paint.
I still think that this idea holds water. What many companies don’t realize is that their most disillusioned employees and their most angry customers are probably their single most useful resource in terms of progress and development.
Build yourself a problem factory and watch the solutions invent themselves.
Some more thoughts from my mate Andrew at GIN...
At times of financial turmoil the temptation is to metaphorically batten down the hatches and wait for the storm to pass. Cut costs, cut jobs – if it moves (and even if it doesn’t), cut it. The problem is that everyone else is doing the same and you run out of things to cut – unless it is your own throat.Lord Leverhume (Unilever) famously said, “We have no money, we will have to think”. But thinking without action is just hallucination, so we need to get used to the idea of doing something positively different.
When Mazda was in trouble in Japan, it came up with a radical solution. Instead of laying off workers on the production line, they sent them out literally selling cars door to door. In the 1960’s the slogan for Packard was “Ask a man who bought one”; well how about asking a man who built one?So here’s a plan for success as the crunch continues – innovate your way out of trouble.Anatomise the business; don’t just ask how could we make it cheaper, but how could we make it better?Have a multi-disciplinary internal innovation team. People often look at their own areas and see no new solutions, where someone new to it will say – “Why don’t we try x?” Think about what’s going on in people’s heads. Read every newspaper and magazine you can lay your hands on and ask yourself what trends are developing that could positively impact on your business and how could they be harnessed to your benefit.
For example, while most people are tightening their belts, existing trends will be intensifying – affordable luxuries and little treats, are just two. How could you capitalise on things like this?Find “buddy companies” and suggest collaboration – just as two heads are better than one, so two organisations can work together for mutual advantage. Most companies are risk averse in their thinking and decision making. Without betting the farm, follow instincts and hunches, but do it sooner rather than later.Plan ahead.
If the current economic situation continues we’ve all had it. So assume it won’t. When the upturn begins have your innovation strategy and new ideas in place.Above all, be placed to get out of the blocks faster than the competition.
Somthing my friend Andrew Crosthwaite at Global Innovation Network just sent me. It reminds me of something about the '7 levels of why' that I had in my head for at least five years - but never managed to write down. See if it strikes a chord with you too.
“Because I say so”. What parent has not at some stage made this statement and then felt shame-faced afterwards? Children are always asking “Why?” – and do so with a number of motivations. At the core is the desire for discovery and knowledge, the wish to make sense of a baffling world, full of complexity. Alternatively there is the suspicion that their parents are not as omniscient as they appear.
I remember the first detention I received at secondary school. My maths master had explained (or so he thought) a particular problem or theorem. He paused and my voice rang out – “why?” I was probably punished for my insolent tone, rather than my intellectual curiosity, but I was kept in for 2 hours after school and my parents probably thought I had been abducted by aliens.
As we enter the work environment, our ability to ask “why” diminishes. We assume that the corporation knows best, that our senior colleagues occupy that role and salary scale precisely because they have the answers. So we get on with things. My proposal is that the time is right for the “Why Revolution”. It’s not about needlessly challenging the status quo, but ensuring that all of our (often lazy) assumptions have been tested. This should not be seen as a destructive process – a venerated London adman, Robin Wight, based his approach on “Interrogating a brand until it confesses to its strengths”.
The person who keeps chanting “Why?” in a meeting is more likely to end up being fired, than receive a 2 hour detention, but perhaps the spirit behind it should be part of any brand or project evaluation. Think of it as a decision tree process. Look at what you are doing or thinking – either collectively or individually and throw down the “Why?” gauntlet. If you don’t do it now, someone – probably that venerated sage, the consumer, will do so in future.
Some answers may be linear; others may split into strands of multiple reasons, so don’t just pursue the obvious. For each “Why”, ask an additional “What if we...” question. You may be surprised at the insights that it leads to, and as the guilty parent, find out that what you don’t know far outweighs what you do.
It’s incredible what you can find on the Internet these days. I was cruising around cyberspace the other day without any specific sense of where I was going when I stumbled upon a paper on innovation models by Professor Joe Tidd at the Science and Technology Policy Research Unit at the University of Sussex (UK). Reading the report sparked off a number of ideas. Using the paper as a foundation here are some thoughts about innovation processes, tools and trends.
1. Innovation process and theory all too often focus on improvements to the scientific base or are otherwise concerned with novel technological innovation at the expense of later research and development. There are considerable barriers to adoption, especially with truly radical ideas, and attention should always be paid to how an innovation is introduced and diffused within a market. Timing is also critical. Launching too soon can kill an innovation just as fast as launching too late. As John Naisbitt once said: “If you get too far ahead of the marching band people don’t realise you’re part of the parade” (at least I think that’s what he said, it was in a bar late at night in Copenhagen and my memory is a bit hazy).
2. Innovation (as opposed to creativity) is a logical process and there are considerable gains to be made from managing it properly. Early theorists saw innovation in terms of linear (push) models involving specialist individuals or departments and it was largely the province of large well-funded firms. These days it’s more open, more networked and more fluid. Moreover, many of the traditional barriers to entry have been reduced or removed altogether allowing smaller forms to innovate alongside their larger brethren.
3. The big shift in recent years is towards open innovation and the use of networks and partnering. This has resulted in pull models whereby customers and stakeholders become active co-creators of value. However, whilst the general public can be very useful in refining ideas or suggesting incremental improvements they are less good at imagining things that do not exist. As Henry Ford once remarked: “If I had asked people what they wanted they would have said a faster horse”.
4. The idea that successful innovation comes about by matching technological skills and market experience to known (articulated) customer needs is too limited. Many of the most successful innovations in history have not initially addressed a known need or matched historical skills or competencies to future possibilities. Sometimes if you build it the market will come. However, it’s generally best not to try this unless you have the patience of a saint and very deep pockets.
5. Continuous incremental innovation often results in long-term business advantage. Toyota and Wal-Mart are both masters at this type of process innovation. Toyota, for example, has an employee idea suggestion system that results in over one million ideas being put forward every single year (see 40 Years, 20 Million Ideas by Yuzo Yasudain). Nevertheless, all too often incremental innovation is seen by firms (and employees) as dull and unworthy.
6. Innovations exist within a commercial and cultural context and this should not be ignored. Moreover, as ethical and social concerns become more important to customers and employees alike the social and environmental impacts of specific innovations, or innovation policies, should be thought through.
Seeing that my last post was about bath bubbles I thought I’d better get a bit more serious, so here’s a quick review of innovation models. First though I think it’s worth looking at definitions because in my experience a great number of people still regard innovation as scientific R&D or continue to confuse creativity with innovation.
The best definition of innovation that I’ve come across is from William Coyne, Senior VP for R&D at 3M. He defines innovation as follows: “Creativity is thinking of new and appropriate ideas whereas innovation is the successful implementation of those ideas within an organization. In other words creativity is the concept and innovation is the process”. Spot on. Creativity is about ideas. It is about new ways of seeing things. Innovation is about doing things. It is about commercial implementation. Thus an idea is only truly innovative if it is introduced into a market and stays there. The test is time in market or, more precisely, the repeat loyalty of a customer.
Another thing to think about when thinking about innovation is what type of innovation suits a particular circumstance. Companies and products can be looked at in terms of life cycles and the type of innovation activity that is required will vary considerably according to the maturity of the market or the sector. Moreover, the culture of an organization and the level of risk that an organization feels comfortable with will also impact on the type of innovation activity that is most appropriate.
Some established organizations would focus on protecting existing business whereas others will focus more on improvements or growth. Ideally, of course, organizations should do all three. In terms of resource allocation a ratio of 70:20:10 to protection, improvement and growth is generally regarded as ideal and this ratio is also very applicable to Horizon 1, 2 & 3 models of innovation.
But don’t forget that the types people and processes that are best suited to protection, improvement and growth also vary. Generally speaking incremental innovation requires processes and people that are very logical and buttoned down whereas radical growth thrives on highly original thinking and this, in turn, requires highly unconventional thinkers who can be somewhat challenging to work with, partly due to personality types but also because this type of thinking is the most difficult to test.
A final thing to think about is whether you are an integrator, an orchestrator or a licensor of innovation. This model of thinking was developed by Boston Consulting Group and essentially splits innovation activity into three quite distinct areas. Integrators manage all stages of the innovation process themselves and this requires high levels of investment. This can suit incremental innovation in mature markets but this approach can also slow development down to a snails pace and increase risk quite considerably due to the level of investment and time to market.
Innovation orchestrators, in contrast, focus on core skills and experience and outsource all other areas. This is a faster and lower cost model and suits high-risk markets but success is largely dependent on the strength of the partnerships.
The final innovation model is licensing. This route is especially applicable to companies operating outside their core competencies. Investment and risk is minimalized but so too, generally speaking, is the return.
There’s been a lot of talk about housing bubbles recently – allegedly caused by various low-cost financial innovations - but I’d like to start a discussion about another kind of bubble that is currently rather boring. Bath bubbles have been around for years but where is the innovation? There isn’t any. Generally speaking they come in one size and one color (clear thru opaque) and frankly I’m rather bored of them. So here’s an idea for the boffins in R&D department at places like Procter & Gamble. Why can’t we have some fun at bath time? Why do toiletries have to be so functional all of the time? Why can’t we have bath bubbles that change color or something? Indeed, why can’t I buy a bottle of bubble bath that creates really enormous blue bubbles or tiny bubbles that come in different colours? We could have caffeinated bubbles to wake you up in the morning or sleepy time bubbles to send you to sleep at night. Come on all you bubble scientists out there how about some new thought bubbles? BTW, this post was inspired a five-year-old who is really serious about bubbles.
You’d have to have been living on another planet not to notice that saving our planet is a pretty big trend these days and the trend for all things ‘green’ and sustainable is naturally making its impact on innovation too. In some parts of the world you now can’t move for carbon neutral holidays, low carbon cappuccinos and packaging that’s been reduced reused and recycled.However, I see a problem on the horizon and it’s called Eco-Exhaustion and it has a distant cousin called CSR Cynicism.
What am I talking about here? Simply the fact that companies (and marketing departments in particular) is falling over themselves to introduce green and environmentally friendly versions of products. Sometimes this can be really good.The Bamboo bike project (bamboobike.org) is collaboration between engineers and science types at Columbia University and the Earth Institute and the result makes me green with envy. Their idea is to make bike frames entirely out of bamboo and isn’t just sustainable it’s potentially a whole new industry in parts of Asia or Africa.Other times innovation in this area is bad. Do we, for instance, really need a bamboo laptop from Asus? Asus chose bamboo because it was “the most sustainable raw material there is” but just how green is this? Maybe Asus is doing the right thing but there are plenty of other people that aren’t.
There is an arms company in the UK that is producing ‘green’ lead-free ammunition because it’s better for the environment. What’s next, tanks made from recycled plastic and bamboo? Equally there is a fur company in Canada that’s repositioned itself as producing an ethical eco-fabric Slogan: “Protecting nature while pampering yourself”. Umm. Not sure about that.No wonder then that a survey by ICM of 2000 British adults discovered that 23% were "bored with eco news". The poll also found that 18% of people had exaggerated their commitment to the environment because it was "fashionable". This is a problem because if companies keep developing simplistic, tokenistic and opportunistic innovations in this area customer will, quite rightly, become cynical and this could damage the companies that are doing the right thing.
Some people are doing it right and hats off to companies like Wal-Mart for at least attempting to turn itself (and, by default, its suppliers, staff and customers) green.Their aim includes increasing the fuel and emissions efficiency of its vehicle fleet by 25% by 2009 and doubling this by 2016. The company also plans to reduce energy use in-store by 30% and lower solid waste (for example, packaging) in its American stores by 25% by 2009. Wal-Mart is still accused of ‘green washing’ by eco-activists but what I do like about what Wal-Mart is doing is that they are not simply messing around with planting trees (a certain large soft drink company plants trees every time you buy a plastic bottle filled with water) or fiddling around with carbon neutral versions of products or packaging. All this helps but where innovation is really needed are areas like the supply chain and manufacturing. That’s somewhere where really innovative ideas could literally save the planet.
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