// TheBugByte

Don’t mind the buzz

Innovation – It’s a popular business buzz word these days. But who determines what it actually means to be innovative, anyway? This semester one of my MBA classes at the Ross School of Business was ES715 – Innovative New Business Design, taught by Dr. Tim Faley of the Zell Lurie Institute. The objective of the class is to teach how to create a framework for a business based on a new technology. The class is divided into teams, half from the business school, and the other half from science or engineering schools. Each team is tasked with exploring commercialization opportunities for one of the technologies being worked on in the science or engineering students’ lab. Throughout the semester, the teams go through a wide array of processes, such as brainstorming and mapping out the technology effects, as well as performing interviews and performing market research. The culmination of the semester of work is a presentation to the class and a local innovation consulting firm, where the team presents their innovative new business. Today I will talk about my experiences from this class, and how I became innovative through observation.

Unplugging the Monitor

The first kind of observation I’m going to talk about is observing the effects the technology offers. Richard Sheridan, President of Menlo Innovations in Ann Arbor, Michigan, tells a story during his monthly Taste of Success Seminar about how his daughter was working on the computer one day, and Richard, for one reason or another, had to move the monitor. His daughter was in the middle of doing some work, and when he flipped the power switch and unplugged it, she got very upset, thinking that he had just turned off the entire computer and lost all of her work. This is a great example of a technology effect. To the daughter, the monitor represented the entire computer. It didn’t matter to her that there was another box on the floor that actually had the brains of the computer – to her, the effect of the monitor displaying information and allowing her to interact was the real issue. I like to remind myself of this story when I think about effects of technology. What are the observable effects a technology offers? What differentiators would a customer consider when trying to choose between your product and a competitor? If your product didn’t exist, what words would a person use to describe the benefits of the product?

Waffling

Another way to think about observing the effects of a technology is to consider the job the user is hiring the technology to complete. Picture a father who is traveling with a teething infant. The child is screaming in pain from his new teeth coming in, and the father has a terrible headache from having listened to it for the past 5 hours. Desperate for something to sooth the child and himself, he pulls off the freeway into a grocery store. As he walks up and down the aisles, he can’t find teething rings anywhere. He starts to think, okay, what can he do now? He needs something soft, soothing, and non-toxic that he can give to his child to help with the teething pains. A light bulb turns on in his head, and he makes a mad dash to the frozen foods section, and gets a box of toaster waffles. They’re cold and soothing for the pain, they’re edible, they will absorb saliva, and they have little indentations which make them easy for a child to hold. This example demonstrates how thinking about the job you need to have done can lead you to innovative solutions.

Watch and Learn

This leads us to another way observation can help to make you more innovative, and that is through elicitations. An elicitation is a process in which you talk to someone about their work process, their technology, or their research, and ask questions to drill down to their core set of needs. The purpose of elicitations is to try to discover new problems for which you can deliver an innovative solution. On the surface, this just looks like some variation of the 5-whys, where you keep asking why until you get to the root of an issue. But if you approach elicitations with an observation mindset, you will be able to find issues or gain valuable insights you otherwise probably wouldn’t. For example, if you ask a doctor to describe a procedure, and you just focus on writing down all the words she is saying, you might miss observable signs of problems they aren’t volunteering to you. If, while describing a particular step of a procedure, the doctor shakes her head and sighs, you know there is probably more to the story. If you are actively observing her and not just focusing on what she says, you may be able to refocus your questions around that particular step in the process, and uncover something that all doctors in her field just take as a given because they’re used to it. This could lead to discovering a huge untapped market to explore, all because you observed instead of just listened.

Observe, Innovate, Rinse, Repeat

Today I’ve talked about observing the effects of a technology, observing the people who use it in order to understand the job they are hiring to fill, and observing through elicitations to uncover opportunities not yet addressed. While there is more to innovation than just looking around, without a focus on observation, you face a tough road. If you approach innovation as a business buzzword, but don’t change your approach, you probably won’t see any difference in results. Once you can switch your brain into observation mode, new and exciting possibilities for innovation will start to appear all over the place.

What are your experiences with observation and innovation? Leave a comment and lets start the discussion!

A story about brand loyalty and customer values.

Time

I enjoyed some fantastic weather today in Ann Arbor. Well, I sort of enjoyed it. Yesterday, the odometer in my car rolled past the 50,000 mile mark, which meant it was time for another oil change. I find changing oil to be fun and rewarding, and along with it comes a sense of accomplishment. Vehicle maintenance, between my Mustang and my Bandit (motorcycle), has always been a way to get away from things, and do something with my hands, which is strangely satisfying in today’s world of electronic mail and streaming videos. But somehow today was not a relaxing escape; today was different.

In my search for the right oil (Mobil1 5W20) and filter (Mobil1 M1-210), I experienced a lot of frustration. The first place I went to, O’Reilly Auto Parts, was out of stock of my filter. Okay. Not a big deal. They were also out of stock of the Mobil1 15W50 I use in my Bandit. As if the Commerce Gods were against me, the store only carried a few brands of oil filter, none of which were right for my Bandit. Fine, I said to myself, and I left without making a purchase. From my car, I called the Ace Hardware across the street.

Ace: Ace Hardware, how may I direct your call?
Me: Just a quick question. Do you guys sell motor oil?
Ace: Yes we do!
Me: What about oil filters?
Ace: Yep!
Me: Okay, great! See you in a few minutes!

So I get across the street, happily walk into the store, find my way to the motor oil aisle (actively avoiding sales personnel – it’s more fun to find it myself). They have an 8 foot section with one shelf of oils and one shelf of oil filters, none of which are the right brand or specification. I should have specified on the phone, really. It’s not their fault for leading me astray.

Dejected, I walk out of the store, and drive to the other side of town to go to Boyer’s Auto Parts off of Wagner Rd. They, too, had limited selection of filters, and fluids, but I at least came home w/ the filter I needed to complete my Mustang oil change. The Bandit will have to wait for another day.

Value

In the O’Reilly’s, I overheard a conversation between employees, in which one employee mocked a customer after completing a phone conversation with them. How disrespectful, I thought. You reply rudely on the phone, and then when you hang up, you make fun of them? Well, it saves me the hassle of ever having to go to an O’Reilly’s again. It’s sad, really… I grew up always going to Murray’s with dad. But Murray’s is no more, gone with it apparently a bit of common courtesy and customer service.

All of this got me thinking about brand loyalty. Why was I so loyal to Murray’s? Why was I willing to spend so much of my day driving around to hunt for the right brand of oil or oil filter? There are three kinds of customer loyalty; Hand Loyal, Head Loyal, and Heart Loyal.

Hand Loyal is when you grab the same product because it’s the one you always grab; you’re familiar with the packaging, and it’s just the one you buy out of habit. You probably don’t even think about it when walking through the store.
Head Loyal, what most of us like to *think* we are, is when we make our purchasing decisions based on attributes of the product, including performance, reputation, features, etc. These decisions are made on logical reasons (or so we tell ourselves).
Heart Loyal, the strongest of the three. This is when you really love a product or brand, and will go far out of your way just to support it. The obvious examples here are firms like Apple and Starbucks.

For the Mobil1 products, for both the oil and filter, I was Head Loyal. I participate in an online forum for Suzuki enthusiasts (the brand of my motorcycle) called Maximum Suzuki, and oil is a recurring topic on their forum. While there is definitely debate over which one is “best”, I feel confident in selecting Mobil1, because several others on the forum use it with great success. This is another example where Mobil doesn’t even have to advertise to get me to be a customer. I actively seek them out because I perceive them to be a smart choice.

With Murray’s, I was definitely Heart Loyal. I grew up going there… I always used to go there with my Dad. Murray’s didn’t even have to advertise and I’d go there. But they sold out, and with the new O’Reilly name, even though it’s the same physical location, one bad experience has turned me off of them for life.

Money

You can see, my purchasing decisions today (or the decision not to purchase) was not based on money. Fram had products in all 3 stores, priced significantly lower than what I was looking for, but money wasn’t a factor. This is, in many ways, the essence of marketing.

Do you have similar brand loyalty experiences? I’d love to hear them! Please leave your comments below.