Last week, this blog focused on the virtues of face-to-face customer interviews… particularly when that customer is a business (not an end-consumer), and the subject is “we’d like to know more about your needs so we can design a better product for you.”
I was giving a presentation to a large industrial supplier a few months ago, and someone raised their hand to say, “But our sales people are already talking with our customers today about their product needs. What’s different about what you are proposing?” In fact, the difference is often that of night and day.
Many sales calls are customer-reactive meetings, in which the customer states their need and the supplier records the information. The sales rep returns to the mother ship and then attempts to have a new product developed, often in a “one-off” fashion, i.e. just for this customer. Seldom does the supplier move down the value chain, trying to understand the needs of the customers’ customers. And too often, other customers in the same market segment are not adequately interviewed for their needs.
Compare that to a market-proactive interview program. First the supplier identifies an attractive market segment. (My definition of market segment is “cluster of customers with similar needs.) Then the supplier identifies the key customers in this segment and their downstream customers’ customers. A highly skilled 2-3 person interview team (which may include a sales rep) then interviews these businesses. If the team is really on the ball, they do a round of qualitative interviews, followed by a round of quantitative interviews. (More on that in later blogs.)
The quality of information gathered in these market-proactive interviews is altogether different that that culled from a sales call report. Needs are probed deeply to understand root issues. Not only are spoken needs identified, but unspoken—and even unimagined needs—are also uncovered. While the sales call tends to focus on today’s problems, the market-proactive also searches for future opportunities. (“Skate to where the puck will be,” as Wayne Gretsky once said.)
Perhaps the biggest problem with the sales-call-induced new-product project is that it puts you in direct competition with others. That friendly chap that told your sales rep his needs had the same conversation with most of your competitors. So now you’re in a foot-race with them. Far better to indentify an attractive market, go far deeper than your competitors in understanding its needs, and then launch a major next-generation or breakthrough product.
With the speed of a thunderstorm and the force of a glacier, the massive deleveraging of global markets is reshaping the face of Wall Street. The venerable system of Wall Street investment banks was carved from the map in a matter of weeks. The unwinding is not over of course. But a way forward must be found.
There will be a moment in the months and years to come, when our culture will look back and realize that it is over. That we survived a very black time and that better days are finally upon us. At that moment, without a doubt, we will have an entrepreneur to thank. An innovator. A free thinker. Teams of them in fact.
Some would argue that innovation got us into the mess in the first place. They cry out - It was the derivatives! The credit default swaps! It was those complicated and new fangled financial instruments that made all of this happen!! In a way they would be right. There is little doubt these financial innovations amplified risk to an astonishing degree rather than democratized risk as they claimed. But the answer is not so easy.
Deeper problems have been building for years. Our central bank was too cozy with our politicians and too archaic in its structure. Our affordable housing mandates were pushed too far and they injected poison into the financial bloodstream. Our energy policy was tumbling headlong into dangerous addictions. The price tag of our social aspirations outstripped the income of our tax system. Our national obsession with stuff eclipsed our cultural heritage of rugged individualism.
Not surprisingly, the creation of sophisticated financial instruments coincided with the maturation of computation. Financial wizards fed data and ran programs as fast as their processors could handle it. Currency arbitrage could be tracked and bet upon. Fluid commodity markets like oil and wheat could be understood in new and different ways. By the height of the credit bubble, Wall Street was selling a piece of a piece of a piece of a debt insured by someone who was insured by someone who owned a security. The math was unfathomable. Turns out the risk was unknowable and the damage unthinkable.
The innovations were not without benefit of course. The securitization of mortgages lowered borrowing costs for millions of people for decades. The explosion of building brought an explosion of jobs. Marketers had people to pay them. Brand builders had people to brand. Web designers had sites to build. There was money to fund the tech start ups. There were customers to buy computers and pay for internet access.
But the system was still the same. The innovations were just still the playthings of the old guard. Profits were maximized and risk was forgotten. But the bones of the system could not handle the new weight that was being created. Remember, the horse drawn buggy was improved with newer wheels, better axels, and better suspension right up until the automobile relegated it to history forever.
And so it comes to you. To us. The destructive force of unwinding is clearing out a new space upon which to build a new financial model. The task to us is to build nothing short of a new cultural identity. The architects of this new model have not yet revealed themselves. But make no mistake; the new model will be as different from the old as the car is from the buggy.
Eric Hoffer observed, ‘In times of change learners inherit the earth; while the learned find themselves beautifully equipped to deal with a world that no longer exists.’ The denizens of Wall Street and the tired politicians in Washington are beautifully equipped indeed. It is time for the learners to step forth.
There has been substantial debate recently whether DARPA - the Defense Advanced Research Projects Agency - still effectively spurs U.S. technological innovation.
On Tuesday, September 14, The Information Technology and Innovation Foundation will host Dr. Erica Fuchs of Carnegie Mellon University for a presentation on DARPA's role in U.S. technological innovation.
Dr. Fuchs will discuss the results of a new study examining the role of the Defense Advanced Research Projects Agency (DARPA) between 1992 and the present on innovation in the United States. In recent years, there has been rising concern over the ability of the United States to remain competitive in the global economy. In particular, the shift of the U.S. innovation system away from vertically integrated firms with large R&D labs, toward networked firms with interdependent technologies has created new challenges for cross-firm coordination and long-term innovation. These challenges raise important questions on the appropriate and most successful roles for federal programs within this framework.
To shed insights into these questions, Dr. Fuchs unpacks the processes by which DARPA traditionally had great success in influencing technology development, and assesses the implications of recent changes in DARPA for its effectiveness within the new innovation ecosystem. Dr. Fuchs’ study focuses on DARPA’s Microsystems Technology office, and its role in technology development in photonics, microelectronics, and other technologies supporting Moore’s Law. Drawing on in-depth field interviews of DARPA program managers, as well as additional interviews of technologists within the five established computing firms, start-ups, universities and government institutions, Dr. Fuchs provides fresh insights into the role of DARPA, how that role can be improved, and what the implications are for federal innovation policy.
All are invited to attend to this public Breakfast Forum at ITIF's offices at 1250 Eye Street NW, Suite #200, in Washington, D.C. from 9:00am to 10:30am on Tuesday, October 14. After the event, we'll share presentation slides and a link to video of the presentation through this blog.
- Rob Atkinson, ITIF
The Information Technology and Innovation Foundation has been tracking Barack Obama and John McCain's positions on innovation and technology policy for some months. In September, ITIF released a report Comparing the Candidates' Technology and Innovation Policies which examined the candidates' positions on a variety of issues, including taxes, education, trade, intellectual property, digital transformation, skilled workforce, and innovation and broadband policy issues.
The report found the overall orientation of John McCain’s innovation policy agenda focused on proposals for creating a favorable environment for private sector innovation through a clear and less burdensome tax code, limited government regulation, and a strong trade, immigration, and competitiveness agenda. By comparison, Obama’s policies recognize the private sector as the central source of economic growth and prosperity and appreciate the need to create a favorable regulatory, tax, and investment climate for it, but also affirm that government can play a proactive and constructive role in helping the private sector commercialize its innovations.
There was some conversation about technology and innovation-related issues in Tuesday night's Second Presidential Debate. Both candidates reiterated the importance of developing green technologies and alternative energy sources. McCain spoke of the need for hybrid, hydrogen, and battery-powered vehicles, which would contribute to cleaning up the environment and creating jobs.
Obama argued that there should be a national approach to creating a new energy economy, likening the approach to, "the same way the computer was originally invented by a group of government scientists."
Obama argued that, "We're going to have to come up with alternative [energy technologies], and that means that the United States government is working with the private sector to fund the kind of innovation that we can then export to countries like China that need energy and are setting up one coal power plant a week."
For his part, when a debate participant asked John McCain whether the United States, "should fund a Manhattan Plan-like project for alternative energy or fund 100,000 [startup-like] garages across America - the kind that drove innovation in Silicon Valley," McCain responded that he supported, "pure [basic] research and development investment on the part of the U.S. government [but that] once it gets into the productive stages, we ought to turn it over to the private sector."
Later in the debate, Obama strongly advocated the need to "use information technology so that medical records are actually on computers instead of you filling out forms in triplicate when you go to the hospital." On the campaign trail, Obama has aggressively supported health IT, and has pledged to allocate $50B over ten years to move the U.S. healthcare system toward broad adoption of standards-based electronic health information systems, including electronic health records. In the debate, McCain also noted he supports putting health records online, and expected doing so would help prevent medical errors.
For a comprehensive comparison of the candidates' technology and innovation policies, click here.
Guest blogged by Stephen Ezell, ITIF
Hello and welcome to Washington Watch. I'm Rob Atkinson, President of the Information Technology and Innovation Foundation in Washington, DC. We're excited to come aboard as Fast Company expert bloggers on the topic of innovation and information technology policy. ITIF is a non-partisan think tank that has been working for two and a half years to formulate and promote public policies that advance technological innovation and productivity internationally, in Washington, and in the states.
At least once a week on this blog we’ll bring you the latest news from Washington, the states, and around the globe on public policies and institutions that are driving innovation-led economic growth. We'll look at the candidates’ policies on innovation and technology policy, monitor and report as the next President begins to implement his innovation and technology agenda, and bring you the latest from the world of innovation economics - a new movement in the field of economics that seeks to succeed neo-classical and neo-Keynesian economics by developing economic growth models that intentionally account for the effects of technology, innovation, and entrepreneurship and argues that countries should implement innovation-led economic policies.
We'll also look at how digital transformation is transforming our quality of life in virtually all aspects of society, from education to health care to personal and public safety. And we'll report how information technology is transforming and driving innovations in government, commerce, and transportation.
We're pleased for you to join this conversation with us. We welcome your feedback and suggestions for topics to cover on the blog – and look forward to the dialogue.
Sincerely,
Rob Atkinson
Going to a funeral is never fun; however, this past weekend, as I celebrated the life of a man who lived 95 good years, I received a welcome, but unexpected surprise. With the ever-worsening economic news as a backdrop, the triumphs and challenges of my aunt’s father’s extraordinary life reminded me of what really matters in difficult times.
Resilience and perseverance in the face of hardship were consistent themes in the life of David Popper, or “Mr. Popper,” as I knew him growing up. The contrast between how overwhelming his challenges were, and the level of personal and professional success he achieved as a highly-respected U.S. ambassador and diplomat made the lessons in his story even more powerful.
At key points, he could have given up, and no one would have blamed him. But he chose to move forward, regroup and fight on with peaceful, generous determination. Two lessons from his life struck me as particularly relevant for the uncertainty many people face today:
Lesson #1: In hard times, it’s imperative to keep moving forward no matter how difficult the circumstances because they will turn around. Persistence and resilience were the keys to his success:
• In his early twenties, newly-married and getting ready to attend graduate school, his father was killed in a car accident. As the oldest, he felt he needed to put his plans on hold indefinitely to care for his mother and three younger siblings. He wouldn’t get the chance to begin his diplomatic training and career until well after World War II.
• When he was at the State Department, Joseph McCarthy accused him of being a communist. Even though all of his colleagues knew this was a completely unfounded charge, the Secretary of State felt enough pressure from McCarthy that he put Mr. Popper on an unpaid leave of absence for three-months while they prepared for his hearing. Things did not look good.
With three children, no income and the real possibility of having his reputation and career ruined by the false allegations, he didn’t sit back and wait helplessly for the verdict to be delivered. Instead he worked everyday for three months preparing a detailed defense. When he presented his case to the Secretary of State and the panel reviewing the charges, they were so impressed that McCarthy backed down, the formal hearing canceled, and the charges dropped. But that wasn’t the end of it. Although the allegations were dismissed, they would continue to haunt him and risk derailing his career at other points, but each time he fought back and won.
• When he was the Ambassador to Chile during the Pinochet regime, he continued to press the importance of human rights even as Henry Kissinger told him to back off, because the U.S. was secretly supporting the regime for other political purposes in the region (for more details, see his obituary in The Washington Post). While he was always diplomatic and did the job he was asked to do, he was unwilling to compromise his integrity. Many believe he was instrumental is saving countless lives in the process.
Lesson #2: In good times, no matter how successful you are, all that really matters is your integrity, your family and friends, and helping others. One benefit of tough times is that they can reacquaint you to what really matters. And it’s instructive that when asked at the end of his extraordinary life what mattered most, Mr. Popper downplayed most if not all of his academic and professional successes. Instead he focused on his family and how glad he was that he had the opportunity to serve others and make people’s lives better.
David Popper was a man who achieved levels of professional success most of us will never achieve, but he also resolutely endured challenges beyond which most of us will experience. And he did it with dignity and grace. I walked away from the celebration of his life much lighter than when I arrived because his story made me believe that we can not only survive these uncertain times, but we can thrive. The key is perseverance and resilience, no matter how steep the odds. Thank you, Mr. Popper, for the important reminder.
Need some help persevering and cultivating resilience in your own life? Here are some helpful resources I like:
2) PRACTICAL CHAOS™: Reflections on Resilience CD, by Judy Martin
Do you have examples of resilience and perseverance in the face of overwhelming challenges that can remind us all to keep moving forward in uncertain times?
Why are so many large companies branding imposters?
On the hand, they spend zillions trying to brand themselves through advertising? On the other hand, they provide far too little oversight or dollars to customer service. They fail to realize that most active customers interact with a brand through customer service rather than advertising. And somehow, few seem to have taken to heart that in today’s interconnected world, consumers finally have a voice.
Meanwhile, too many big companies remain faceless impenetrable bureaucracies with no personality as Rohit Bhargava points out in his brilliant book, Personality not included.
In the spirit of exercising my consumer rights and I hope piercing a tiny crack on the corporate “keep consumers out” shield, here is an open letter to the CEO of Hewlett Packard. I will publish one to the CEO of 1and1.com in Part Two of this post, to be published separately.
Mr. Mark Hurd
Chairman of the Board
Chief Executive Officer and President
Hewlett-Packard Company
Dear Mr. Hurd:
I was once a big fan of Hewlett-Packard’s customer service when you truly stood behind your products and customers. But that seems to have gone by the boards as you have relentlessly outsourced your customer service to people who don’t care about your brand.
I have now spent 16 hours, count that 16 hours, with three different HP technical support people, not to mention one technical support supervisor, one case manager, one would be case manager and one executive customer service person. What do I have to show for my efforts? A printer that only works manually, not from the computer, and a broken Windows Installer? Both were working prior to my calling HP. I also have two Service Ticket Numbers, 801-599-4173, 801-667-5327 and a Transaction Number, 7500-631-029.
How has HP let me down and tarnished its brand in my eyes? I was promised callbacks by two different tech support people who after each to their credit spent hours trying to get my printer to work promised to call me back to finish the job. Neither ever called me back.
I asked to speak to a boss in your case manager’s office and was told: “My boss doesn’t talk on the phone.”
I asked a person in your executive customer service to schedule a tech support call for me and was told, “I can’t do anything because they are in another country.”
Pardon me, but is HP a 21st century technology company?
I complained to a case manager at your corporate headquarters about my problems and she assured me that a technical support person would call me back the next evening and that she would call me back that very same evening to insure everything had been taken care of.
At that point, I was about to give HP the Customer Service Merit Award.
But not only did the tech support person not call me back but the case manager didn’t call that night either. The case manager did mean well but she just seemed to get her tasks wrong. She eventually got back to me (48 hours later) but seemed to be oblivious to the fact that a tech person was to have called me the day before as was she and that I couldn’t solve the problem myself. She too told me she couldn’t schedule a tech call.
I am hoping that this letter forces you to take a good look at your company’s customer service – or rather non-service – and how it is hurting your brand.
Sincerely yours,
Wendy Marx
Wendy Marx, PR and Personal Branding Specialist, Marx Communications
With the news full of failing banks, dried-up credit and falling stock markets, it’s no shock that people are afraid about what’s ahead, entrepreneurs included. And yet even in the midst of all this, the opportunities ahead are bright for green businesses providing renewable energy.
Along with the bailout bill passed last week, known in government circles as the “Emergency Economic Stabilization Act of 2008”, Congress attached an extension and expansion of tax credits for renewable energy. The impact of the $700 billion bailout remains uncertain as this point, but the impact of these incentives for renewable energy is likely to be huge, helping to solve our financial problems, our climate problem, and our energy problems at the same time.
The bill provides for an eight year extension of renewable energy investment tax credits covering up to 30% of the cost of solar power projects for homes or commercial sites. The short time frame of these tax credits in the past, and their frequent expiration from year to year have created enough uncertainty to dampen long-term growth. Eight years is long enough to allow for long-term planning, and encourage long term growth.
Along with the extension of the credits, the $2000 cap on the tax credit for residential systems has been removed. With a residential system of $30000, the tax credit will be $9000 in 2009 rather than being limited to $2000 as before. While a large percentage of the solar market has been limited to states like California that have provided the most generous state-level subsidies, removing the cap will greatly expand the market for solar power across the country.
Distributors and installers will see opportunities expand nationwide. A study by Navigant Consulting found that extending these credits will create 440,000 jobs, contributing to the growth of green collar jobs, and these numbers did not include the removal of the cap. When I spoke recently with Gary Gerber, CEO of Sun Light & Power in the San Francisco area, he confirmed that business has remained strong despite economic events, and he expected the passage of this measure to bring still greater growth. Large producers of solar panels like Sharp Solar are also predicting a rosy future, and VC funded new solar companies like Solyndra are continuing to plow forward full-steam ahead, downturn or not.
Other renewable energy technologies will also benefit from the measures in the bill, including small wind, geothermal, fuel cells, and ocean energy from waves and the tides. The measure allows utilities to take advantage of the investment tax credit as well, removing another restriction, and allows clean energy bonds to be created to support the creation of renewable energy production.
As renewable energy continues to grow and its costs fall, it’s becoming increasingly competitive with power from other sources like coal. As Google says the goal is to make renewable energy cost less than coal. These tax credits will help to get us there. We're not out of the woods yet by a long shot, but it's time for some good news and the move to a green economy may help us dig our way out.
Brilliant. In a matter of seconds, even without sound, the new HSBC lumberjack TV ad tells us that communities – even families - are comprised of people with very different points of view. The ad is visceral; it conveys both the intensity of the differences, as well as the closeness of the bonds. The point is that in spite of the differences, the individuals are part of one family, and one community.
This ad reminds me of the value of diversity of perspectives on nonprofit boards, while working together towards a common mission. Standing in front of boardrooms facilitating retreats, I hear a distinct qualitative difference in the discussion among boards comprised of people with a variety of perspectives and backgrounds, where different points of view are encouraged, appreciated, and respected. Such boards engage in the most thoughtful conversations of community needs and interests; create a vision for the organization to distinguish itself in adding value; and build support through the broadest networks.
The big question now is which nonprofits will survive new financial threats. Given that nonprofit funding sources are government, philanthropy, and fees, there is no question that the organizations that are best positioned to thrive are the ones with boards that are comprised of people with diverse backgrounds, perspectives, expertise, and networks, as well as a deep commitment to the mission and the community.
While meandering around the Murray Hill district of Manhattan, I was stopped dead by an intriguing sign: "Sal Anthony, famous Italian chef, has gone raw!"
An Italian Chef going raw? Is that like a Chanel shopper going Goth?
Delightful oxymorons scotch-taped in windows always sucker me in to find out the backstory. On stepping inside the pristine café, which reeked of fresh picked iceberg lettuce, I spotted the man himself. He was dressed in full chef's regalia, crouched over a Magi-Mix instructing an intern about the correct way to process the unprocessed.
His food was good. Clever, in that offered more than the usual crudités and hummus variants and expensive dehydrator wafers, the usual standbys of raw foodism. But I'm not here to talk about the food.
A bit of Googling reveals a backstory - a community-minded restaurateur offering patrons a good deal ($14.95 prix fixe) falls victim to hard capitalism – the only kind of capitalism our self-serving society seems to understand. His rent octuples, he's forced out. Concurrently, or perhaps karmically, he becomes interested in health and fitness. Not an automatic progression for an ossobuco maestro. So he develops his own brand of yoga and opens a fitness studio, or in his words, a movement studio.
"They Inc." will tell you that when you get in touch with your body – and I don't mean slathering it with $200-a-gloop body lotion and dressing it in Prada - you ever so magically start to think of others.
His self-styled movement salon tries to offer a good deal as well. 1.5 hour classes packaged come in at around $12. I am reliably told this is a bargain in Manhattan, even when it's no-initiation season at the skankiest gyms.
All this is what Anthony calls "soft capitalism".
Google "soft capitalism" and you land on some vaguely unsatisfying and nebulous definitions involving the words socialism and communism. Anthony's definition:
"Soft capitalism says 6 people sit down, I get up, I make all the money, you five make nothing. Soft capitalism is: six of us sit down, we all make a couple of bucks and get on with our lives. It works, I've proven it."
So it seems. In his "Vanishing New York" clip, he candidly states he's "very close to bankruptcy every day", but "I'm not starving, I'm living, I'm raising children, and I do it through soft capitalism." That includes running a raw food cafe, a yoga studio, a florist and two other restaurants, and - perhaps the real test - he seems to be having fun.
I can tell when people are having fun. They're busy but they have time for you. Anthony didn't know me from a bar of soap, yet put down his large chef's knife, wiped his hands and came out from behind his blender to explain to me what his cause was about. He encouraged me to try his modestly priced carob, date and nut balls, but sensibly, didn't give out any free samples - remember, this is soft capitalism, not a charity. A little bit of money makes the world go round.
"Make no mistake, I need money, I have to pay rent, I have to feed my family, I like money," says Anthony, speaking for everyone on the planet except Carthusian monks. "I like capitalism, I don't like communism, I don't like socialism. Capitalism could work. But soft capitalism. Not raw capitalism."
Raw capitalism?
"Get the most, give the least, give the least, get the most. Where the hell are we going to go with that? We're going to hell with that. We’re all on the same rowboat and it's going to sink."
When I rode my bike through Cuba, someone watching the government propaganda channel (the other channel screens nonstop Mexican soap operas) told me that Fidel Castro was heard to say, in essence, "Capitalism isn't the answer because it destroys community. But Communism isn't the answer because it destroys individuality. What we seek is a way to achieve both." Whether that someone was just passing off his own private ideal as that of Castro I don't know, but I now feel there is a label for that ideal, and it's called, soft capitalism.
Anthony's message goes beyond yoga and uncooked food. His Vanishing New York film project joins the chorus against the cancer of greed that is destroying the whatever community is still left in the streets.
He's talking of luxury condomania, the rents that wipe out beloved, 40 year old institutions in a single hike, increasingly long commutes to work and even longer hours at work, and questioning what will happen to us if we don't start tossing some tenderizer on hard capitalism.
As a newcomer to New York I wander around the city, concur with Curbed, and wonder if anyone has ever thought of developing even semi-luxury condos. That is, making a tropospheric rather than stratospheric profit, thus providing a service to their fellow man and really, helping to keep our street corners interesting. I will grudgingly concur that Banana Republic, Starbucks et al have a right to exercise their hard capitalism – but does it have to be on every street corner?
A few short years ago I was fortunate to visit a unique little development called Pen Park Commons in Portland, where two guys got together and re-developed an old duplex into 6 ,1-2 bedroom condos and priced them from a very affordable $92, 000.
What makes this a seminal achievement in modern co-housing is honoring appropriateness in every respect. Here is a renovation which left most of the modest but characterful fixtures, fittings and finishes intact – repairs were made where they mattered. The entire complex was spruced up in the most delightful and livable way with paint and that magic ingredient – good taste. 5 single people who did not own a car, and 1 couple with a baby, were able to move in. We're not talking the usual restrictive co-housing scenario where you're required to sit through endless meetings leading to unimaginative decisions, suffer forced weekly dinners, and where the childless have to endure freewheeling screaming kids. We're not talking a bunch of weed whacking hippies in and out of each other's bean chairs and ice boxes, either. The residents are professionals who simply live a simpler, Design (Actually) Within Reach lifestyle, and they get together as a community when they want, and when it matters. It's one of the few places I felt I would want to – and more importantly, could afford to – live.
Back to Anthony's $12.50 classes, which I am preparing for as I type this post.
So he can make money offering that kind of deal?
"I'd rather charge $60 and hour rather than $100 an hour, $12 a class rather than $30 a class. I try and keep things in keeping with what's going on, so we can sort of afford to stay healthy. I always say, what can we do, what can we afford to do, for ourselves and others?"
Even more affordable is the excellent free soup, bread and cake served daily to his yoga customers - soft capitalism owes its flavor to generosity.
If you can make it in New York, you can make it anywhere. If, like Sal Anthony, you can do it using soft capitalism, we'll get out of this mess yet.
Social multimediaclast Galfromdownunder also interviewed soft capitalist and live foodist Peter Melov in Sydney. His message is similar – what can we afford to do, for ourselves and for others?
View the Gal UNCUT on Peter Melov and Sal Anthony
Watch the Gal's videos of Peter Melov's cooking class