Thursday, October 12, 2017

"Tread the third path to innovation"/ Connor Gottfried

Jul. 17, 2017 "Tread the third path to innovation": Today I found this article by Harvey Schachter in the Globe and Mail:

We have been trained to see innovation in two ways. The first is incremental improvement, when small tweaks are made to a product in the hopes of expanding its appeal. The other, drawing most of the attention, is disruptive innovation, revolutionary improvements that change markets and industries, as when Nucor introduced the mini-mill to make steel significantly cheaper, Amazon pioneered an online bookstore or Steve Jobs unveiled the iPhone.

David Robertson, a professor of practice at the University of Pennsylvania’s Wharton School, says there’s a third, important approach that executives need to consider. It has been successfully applied at various companies but has drawn little attention.

It consists of multiple, diverse innovations around a central product or service that makes the product more appealing and competitive. An example is Gatorade, which had tried incremental change through different flavours and redesigning its logo to become simply G, but was losing traction to other types of drinks in a shaky economy.

The company instead focused on its core customers – serious athletes – and started offering an array of what it called “sports fuel,” such as gels and bars for before a race, and protein smoothies for post-exercise recovery. None of that was revolutionary. But it wasn’t just product tweaks, either. It was a new direction that supplemented the original product.

The complementary innovations operate together and with the key product as a system to carry out a single strategy or purpose – the promise to users. They are not random or opportunistic, based on what is convenient, but carefully brought together to satisfy a compelling user need.

Prof. Robertson points to Novo Nordisk, which introduced a human growth hormone to the U.S. market in 1997, 10 years after Genentech. But it offered convenient prefilled injection pens that contained multiple doses, eliminating problems about dosage, and was supplemented by NordiCare, a support program that went far beyond anything else in supporting the user. These elements added up to a better system for users.

The third distinguishing characteristic of the approach is the complementary innovations – even when delivered by outside partners – are closely and centrally managed by the company. Prof. Robertson contrasts that in an interview with IBM PCs, where the company failed to control crucial elements such as the operating system and power chips, losing out on critical financial opportunities. Instead, CarMax has introduced a host of changes to make buying a used car stress-free, including controlling ancillary elements of the deal lsuch as the trade-in, warranty and financing.

“The binary view of innovation – that the only alternative to incremental improvement is radical disruption – is dangerously simplistic,” he writes in The Power of Little Ideas.

“The Third Way is not a replacement for incremental improvements or disruptive innovations; rather, it’s another option that every business leader should understand and consider when faced with an innovation challenge.”

In his research, Prof. Robertson developed a different view of Mr. Jobs, who is celebrated for his disruptive innovations. Yes, the iPhone fits that description. But not iTunes and the iPod. Prof. Robertson found that, originally, Mr. Jobs did not want these innovations to be available to non-Mac users and had to be pushed into reversing himself.

They were intended to bolster the appeal of his computer, a third-way constellation of offerings around Apple’s main product. “This may seem like academic hairsplitting, but it’s important for managers to realize he was trying to complement the Mac rather than disrupt the music industry,” Prof. Robertson says in the interview.

In heading down this road, he warns you to expect to grapple with four decisions:
  • What is your key product?
  • What is your business promise?
  • How will you innovate?
  • How will you deliver your innovations to consumers?
The key product should be what Prof. Robertson calls one of your “crown jewels.” For Lego, that was the bricks. But when the company moved into diverse new products that weren’t brick-based, such as theme parks and after-school education, it suffered.

When it introduced Bionicle, which used plastic pieces to create action figures, and surrounded it with a video game, direct-to-video movies, and licensed merchandise such as Nike shoes, the company had a winner.

For Guinness, the crown jewel is its beer. But its Irish Pub Concept helps people outside Ireland to establish pubs with authentic Irish items bought from estate sales in that country and, of course, a chance to enjoy the dry stout.

“Sometimes the best way to innovate is not outside the box, but around the box,” he says.

23 hours ago

And don't forget the most popular path, "We stumbled upon it."

The Ladder: Connor Gottfried: Today I found this article in the Globe and Mail

Connor Gottfried, 40, earned a mechanical-engineering degree from the University of Calgary and gained 13 years of experience in the field before launching the eLearning development company, Leara, in 2012. Since then, Leara has amassed a clientele that includes NASA, ATCO and Marriott Hotels. Mr. Gottfried is chief executive officer.

When I was 19, my high-school vice-principal (Cam Mateika, in Swan River, Manitoba) got funding from the government to bring Internet to small towns and hired students. I was super lucky to get that job. I was working at Dairy Queen.

We built the Swan Valley Community Network. I also worked on a regional video-conferencing network to allow an economic development group to give financial and business advice. It’s not like the city where someone can come into your office. I started doing eLearning in a rudimentary sense.

I was studying mechanical engineering (at the University of Calgary) and trying to decide if I should continue. When I saw what was happening with the Internet, I thought ‘Wow, this is where I want to be for the rest of my life.’

I'm into mountain biking, and even to make a mountain bike, it's very difficult; you need a lot of materials and processes. With the Internet, you can build some software, and you can release it on the web and it will be instantly available all over the world. That really appealed to me.

I started working for an eLearning web developer and realized that regular web development was dependent on these business cycles.

The thing with eLearning is that it was very clearly cutting costs for businesses. A lot of companies were flying people in, sitting them in classrooms, putting them in hotels. They were spending a lot of money on training and eLearning was allowing them to deliver that same training while cutting all those costs. I realized right away that this was going to ride out any sort of economic cycle.

After 13 years, I left to start Leara and a lot of things changed. … primarily, you have to get clients.

We relied on SEO (search engine optimization), word of mouth. That type of thing. We did that through being innovative in the field. NASA found us because of our Respond5 software.

What I’m most proud of in business is Respond5. So many times, I've felt like it's not going to work, then something will happen. It almost seems like it wanted to come into the world. You would never think that when you start writing a piece of software, that it would define your career. The ideas for it keep coming and keeps me inspired.

The future? It will go two ways: mobile devices will continue to explode. There will be performance support and on-the-job aids. The barista who can’t remember how to use the coffee machine will be able to get help on demand. There will be a shift training in courses to training right when you need it.

Virtual reality training will change everything. Twenty years from now all training will be virtual reality. We will see an explosion of tools to create virtual reality training but also artificial intelligence in terms of how to interpret what employees have done and how did they address their weaknesses?

What I’ve found is there are experiences that create passion and experiences that take it away. When you put your time into things that don’t inspire you, you dull your passion. What I’m passionate about is software innovation, so I put my time into that.

When not working, I play in a band called Tetrix with my brother and childhood friend. We made our Tetrix 14 album covers out of felt. It brings us together as a group. We laugh, we drink beer and we do the work. We cut out all the felt by hand and we glued them all by hand. When I started Tetrix 14, I said to my wife: “I don't want to do something easy. I want to do something hard, and I want to spend extra long on it.” That's what we did.

Hard work is fun. That might sound nerdy, but that’s what I love.

Advice for that small-town Manitoba kid? Focus on knowledge first. Always give yourself a project. Try to learn. If you want to be in a technology industry, you have to be constantly adapting to technological changes.

2 days ago

Challenges means getting out of your comfort zone; and that is always a good thing.
1 Reaction

Rich Mole
2 days ago

Wow, G&M. Good one.
Need more like this, if it inspires one or two kids out there to be "nerdy." Mind you, Conner's comments are likely a turn-off for a whole lot more readers, but that's OK. The way people are.

The guy is 40 but still talks and thinks like a kid...because his enthusiasm seems undiminished by time and all the challenges he's overcome. He's both blessed and cursed. Take it from his wife, who hears this: "I want to do something hard..I want to spend extra long on it." So much for enriching the husband-wife relationship...maybe not quite as much "passion" found there. Just can't measure up. Hope she's understanding.
See, that's what I mean by "talks and thinks like a kid." No mature adult husband would EVER admit those thoughts to his wife.
Sobering to think that the world in which we live is changed by people Gottfried.

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