Jeremy Gray – Practical Solutions to Difficult Problems S8 E9-12 The critical challenges growing businesses need to get right.
Jeremy Gray – Practical Solutions to Difficult Problems
IBGR. Network. The World of Business at Your Fingertips
Season 8 Show Notes: The critical challenges growing businesses need to get right.
Episode 9 Reid Hoffman on the New World of Work. – Innovating for an uncertain future.
At the start of 2022 Reid Hoffman a co-founder of LinkedIn and now a partner at venture capital firm Greylock Partners talked with HBR to share his thoughts about the opportunities for innovators in these times of uncertainty and turbulence, Hoffman believes these are this is new normal.
I enjoyed listening to Mr. Hoffman and today I will share with you the key points of his message,
Innovation = Risk. There is no innovation without risk. You can minimize the risk by minimizing the cost of innovation not being successful. You can try to develop a product or service in a way so that if it does not work as planned, it is still viable in another way. If you are trying to be innovative and do not see the risk in what you are doing you may not being innovative enough.
Identify Time Frames. There is much talk about the metaverse these days but be realistic. Are we all going to be walking around in body suits with a camera on our head? Not very likely. When you consider this, you realize that future is not near term. Instead look for patterns of innovation on what’s going to happen in the three, five or ten years. When are the platforms, AI, Cloud, Mobile technologies, going to change, when can you execute and where is the intersection of the two?
Be discerning. If you are not discarding some good ideas you are being discerning enough in selecting projects that move forward. I found a great use for this technology but it does not fit with our time frame so we need to do something else.
Conflict between legacy product and innovation. It takes leadership and courage to disrupt your own business. Your organization has been built around the legacy product. Your business may be focused on tuning efficiency, how can you put a dollar in and get two dollars out? Your legacy business can clearly deliver that. But innovative products raise questions such as: Are we abandoning our old product? Are we destroying ourselves? Will someone else do this if we do not? Better to ask: How would an innovator come after us? Can we own that challenge? Can we do it at a lower cost? You need to change your business model and that needs leadership from the top. Companies get into trouble when they do not take risks and make efforts to develop new products.
Never waste a good crisis. Covid has changed the way we work; this provides an opportunities for start ups to offer new services such as helping employers adapt to long term distributed working. Try to predict where the changes will lead and focus on that. Not business as it is today but where it will be.
Hoffman on the future of work. Historically we have gathered in cities, in company offices and there were good reasons for that. And many of those reasons still exist. Some people are more productive working from home. Some people, and probably the majority get energy from being in the same room and working together. Yes, we can work on Teams or Zoom but maybe not as effectively.
Allow people time to decide. Employees want to see that their leaders care about their health, workstyle, productivity, their happiness. Talk about the will return to the office. Maybe not every day as in the past but at least together sometime each week.
Use The Pull Factor. Consider events that are fun and attractive that you need to physically present to participate in. Pizza parties, team building activities. This create a pull that makes people want to be there. Help employees feel that they are part of a team, not a cog in the wheel.
The role of business in society. Employees, customers, even investors increasingly care about the impact your business has on society. This goes beyond, everyone is doing climate change, so we will do climate change, will be sustainable. Although this is important, the focus on what is my business really trying to do? How do I invest in that to make a big difference?
LinkedIn as an example. Mr. Hoffman discussed how this could apply to LinkedIn. Should LinkedIn focus on carbon capture? They do not have a platform to do that, On the other hand LinkedIn is very good and helping people reskill. This can support diversity and inclusion by teaching people new skills. How could LinkedIn help cities invest to help their citizens achieve these goals? They have the data and knowledge that can help.
Leadership in 2022 The conditions of crisis and volatility will outlast the Pandemic. We are seeing global tensions, US and China, the Ukraine situation. Competition can come from anywhere across the globe. Political disorder. In this environment a leader should be bringing a measure of stability. Identify the future you are trying to build, make the hard calls, others my disagree but stick to your ethics and values.
Recruiting for Innovation. Innovative talent wants to play in the future. To retain them show, you care about the world, care about where the talent is going, and their future careers. At LinkedIn Kevin Scott would ask during interviews “What is the next job you want after LinkedIn?” Because the organization is committed to you. We would love it if you worked at LinkedIn your entire life but whatever happens next, we want you to have a great career.
The Great Resignation is the Great Reshuffle. People are saying “Well now I can try this, or now I can take this risk, I have rethought my priorities”, Your company’s capabilities and organization are based on the talent you have. You may have a great position, a great product but the future is driven by talent. Focusing on talent strategy is key differentiator for you company.
Tags: How to grow a business, achieve business success, employee engagement, lean organization the successful entrepreneur, business common mistakes small business start-up; avoid these common mistakes; IBGR.network, Jeremy Gray, Practical Solutions to Difficult Problems
Episode 10 Innovation is different in Startups. Frameworks for finding business opportunities.
How can you find good, innovative ideas that lead to business opportunities? Three exploration frameworks— changing what doesn’t work, making things easier for customers, and making things more affordable—can reduce the risk and uncertainty associated with new projects.
Start-up is a temporary status—a term for an organization whose vital objective is to launch a new business model or open up a new market. For such companies, the model that identifies four primary sources of innovation—product, process, business, and customer—is inappropriate, an obstacle to the development of truly transformational ideas. Start-ups look at innovation from a different angle. After considering the needs of a particular industry or market, they deploy a new plan to improve the industry (incremental innovation) or create an entirely new market (disruptive innovation).
Innovative ideas, by themselves, are not enough; they are just one element of the journey towards market domination. Just as a drug can cure one disease but not another, start-ups have to apply innovation in an intelligent way that actually solves their customers’ problems. This is the main difference between how start-ups and traditional companies approach innovation.
The concept of innovation encompasses three fundamental characteristics:
For the consumer, innovation must always result in something new. If you compare what existed before with the new creations, you should see a positive advance.
Innovation doesn’t always involve the incorporation of new technologies. Value can be created for customers in various non-technical ways: designing a special customer experience, applying the low-cost concept to other consumer services, or introducing an unusual distribution model.
Innovation must have commercial value; if it yields no benefits, it’s just an idea.
Innovative ideas, by themselves, are not enough; they are just one element of the journey towards market domination. Start-ups have to apply innovation in an intelligent way that actually solves their customers’ problems.
Three exploration frameworks
For innovative entrepreneurs, the process of solving the customer’s problems begins with observing people and keeping abreast of technological changes. The next step is to ask whether there are any business opportunities that solve existing problems or address existing needs, taking into account that the proposal must be relevant and valuable to customers.
By combining this reflection with the three fundamental elements of innovation, we can define three exploration frameworks that allow start-ups to generate ideas that are both innovative and aligned with the elusive taste of the customer.
Framework 1: Change what doesn’t work
In this framework, the idea is to innovate incrementally. Borrow an existing idea or well-known service, assess its problems, and figure out how to do it better. Many kinds of attributes can be improved; adding new functions to the product is not the only way forward. The most interesting approaches often have to do with reducing or eliminating inefficiencies related to time, cost, risk, or effort. To be clear, “doing better” means more than just a simple product update.
Framework 2: Make things easier for customers
Being disruptive is clearly more difficult, since it involves disregarding known problems and preconceived notions in order to see things in a new light. This framework requires a certain degree of abstraction; rather than improving a defined product, you’re finding a new way of doing something.
The art of making things easier is explained by the well-known design theory of simplicity. The idea is not to eliminate the superfluous functions of a product or service but to tap the innovative entrepreneur’s in-depth knowledge of a particular subject in order to define the essence of the problem. It’s about starting from scratch and using your imagination to describe how things should be.
Products or services designed with simplicity also have another advantage: people use them more often and they are usually quite beautiful. However, a simple design only seems obvious once someone comes up with it.
Framework 3: Make things more affordable
The idea here is to take something viewed by certain consumer segments as a luxury item, imagine its ideal use, determine how much it should cost, and transform it into an affordable mass-consumption good.
This framework overlaps somewhat with the low-cost concept—here, too, the aim is to expand the consumer market—but in this case the quality of the solution offered to the customer is not sacrificed. This framework should not be confused with occasional markdowns used as a marketing tool.
The three-framework methodology can give established companies the same internal benefits as those enjoyed by start-ups in terms of agile uncertainty management.
What are the implications of this way of exploring innovative business ideas? What parts of this start up-appropriate strategy can be applied in mature organizations, and how?
For any company bringing an innovation to market, one of the biggest frustrations is the discovery that potential users do not behave as expected. One lesson we can learn from start-ups is that we should begin by considering the customers’ problems and let them guide the innovation process. Companies should not prescribe new products or innovative services without first understanding what’s going on with their customers. What, exactly, is their problem?
At this very moment, a hundred start-ups are probably working on the same idea—one that could transform the conception of new products or services in a particular market. It is quite difficult for any single company to compete with this degree of exploration and development of possibly revolutionary ideas. Given this innovation bottleneck, it is essential for business executives to explore interesting new ways of planning and investing in resources for innovation and to consider new factors in these decisions.
In innovation management, it is often said that no limits should be placed on the type, origin, or purpose of ideas. It may come as a surprise that the innovation journey requires the adoption of a framework to direct exploration towards the most innovative ideas. Reflecting on these three frameworks does not stifle innovation; in fact, it can help companies focus on analysing and developing ideas that better resemble what the target customer ultimately wants.
Start-ups operate in relatively unexplored territory. Compared with traditional companies, they are more willing to take risks on disruptive proposals. Nevertheless, the three-framework methodology can give established companies the same internal benefits as those enjoyed by start-ups in terms of agile uncertainty management. The key is to harness the essence of a start-up.
Episode 11 Bring your breakthrough ideas to life. Learn from successful innovators
In 2003 the Indian environmental researcher Narayana Peesapaty spotted an alarming trend: Groundwater levels in the region of Hyderabad were falling precipitously. He examined rainfall records but found nothing to explain the drop. Looking deeper, he discovered that the culprit was a change in agricultural practices. Many area farmers had abandoned millet—a traditional crop increasingly regarded as “the poor man’s food”—in favor of rice, a thirsty crop that requires 60 times as much water to grow. And because they had access to heavily subsidized electricity, the farmers were continuously pumping water into their fields.
Peesapaty tried to influence agricultural policies by documenting the problem in government reports, to no avail. So, he looked instead for ways to boost demand for millet. He hit on the idea of turning it into “edible cutlery”—a solution that could attack not just the groundwater deficit but also the scourge of plastic waste. Peesapaty quit his job to pursue the project. A decade later, after a video he posted about the cutlery went viral, orders began pouring in. Two crowdfunding campaigns exceeded their targets by more than twelvefold, and the first corporate orders shipped in 2016.
This great story demonstrates that there are two potential routes to a solution of a problem. The first is conformity, Peesapaty tried to influence government policy. The second, originality, in the case edible cutlery.
Unconventional thinkers have unprecedented access to knowledge, talents, capital and potential customers. Yet breakthrough products or services are hard to find, Gary Hamel, a recognized business thinker, notes that corporations are awash with ideas that full into one of two buckets. Incremental no brainers or flaky no hopers. I wonder into which bucker he would put Elon Musk’s SpaceX, Branson’s Virgin Galactic or Jeff Bezzo’s Blue Origin.
Why should this be? The authors in talking with both entrepreneurs identified three related criticisms of existing innovation frameworks. The often-used stage-gate process is too linear to facilitate radical innovation. It works fine for incremental innovation but fails when it comes to breakthrough innovation that moves forwards, then goes backwards and then forwards again during the development process.
Innovation frameworks are incomplete. They do not allow for the way people act when developing new ideas. They focus on lean methodology (action and fast iteration) whereas Adam Grant of Wharton talks about strategic procrastination – time for deep reflection.
Finally traditional frameworks are misleading. They gloss over pitfalls and biases that limit creative thinking.
Even when leaders recognize this pitfalls and know they must break the paradigm during the creation stage, they fail in execution. Take the Sony Reader, never heard of it you say, I am not surprised. Technically brilliant but Sony did not enlist the book publishing industry as an ally, Amazon did not make this mistake when it launched a technically inferior but incredibly successful Kindle just over a year later. Sony engineered an elegant device; Amazon offered a solution.
The authors have developed a five element framework that is more accepting of the messiness of breakthrough innovation.
Look through a fresh lens. Our experiences tend to interfere with our ability to look at things with a fresh set of eyes. This may blind us, unconsciously, to radical insights. To combat this bias question what perspectives drive your focus and what you might be missing as a result. Nivea conducted an online analysis of discussions about deodorants on social media sites. Their findings, contrary to what they expected, it was not the fragrance, effectiveness or the development of anti-stain deodorants and the company’s most successful product launch in their 130 year history. `
Step Back to expand your understanding. Its now time to step back before rushing into problem solving. Many of us of have a tendency to jump to the solution. Instead take a break, change activities, wait a day or two to allow alternative solutions to emerge.
Look for unexpected combinations. It is not uncommon for companies to lose their imagination after they have achieved a measure of success. Xerox was almost a monopoly in the world of photocopiers. Complacency set in, innovation was second place to sales, they lost out to competitors who had better products. Avoid this by asking yourself questions such as “Why not?” or “What if?” “What if we no longer did what we do now?” The McLaren group known for their Formula One racing team considered their skill sets such as aerodynamics, predictive analysis to turn their attention to other areas where this skill would be helpful. McLaren is now a consulting and technology group that owns a formula one team.
Test smarter to learn faster. You have turned your idea into a prototype solution to test it out. The challenge is that as you start testing confirmation biases and the sunken cost fallacy deaden your ability to react to feed (I talked about the sunken cost fallacy during show 4 of Season 6. Listen to assess your propensity to fall foul of the sunken cost bias) Go external with your prototype, expose it others so they can see it, touch it, and interact with it. Listen to what they say. Negative reactions are as helpful and positive reactions. Do not spend too much on your prototype, the idea is to test not build. Simple models are sometimes referred to a Frankenstein models.
Navigate to avoid being shot down. This can be internal, Steve Sasson, the Kodak engineer who invented the digital camera lost Kodak’s support in part because he called filmless photography. Or external Jonathon Ledgard saw drones as a solution to some of Africa’s transport problems. The word drone can sound menacing, so Mr. Ledgard called them “Flying Donkeys” a much friendlier description. Present your ideas that are consistent with your company’s goals and in a way that will resonate with your customers.
Tags: How to grow a business, achieve business success, problem employee engagement, self-assessment, motivation, the successful entrepreneur, business common mistakes small business start-up; avoid these common mistakes; IBGR.network, Jeremy Gray, Practical Solutions to Difficult Problems
Episode 12 Customers expect rapid answers. Brands who do this well will gain a competitive advantage.
We live and work in a time when people expect to ask questions and get rapid answers. Customers today expect more than just a transaction with suppliers, they want to be sure that the supplier’s values match their own. The range of questions customers ask is expanding, as are the channels available for asking them. Brands who develop an effective plan to provide information to consumers will earn trust and a competitive advantage.
Google was founded 24 years ago and now is the go-to website when folks have questions. We expect to be provided with answers to our questions instantly. As it gets easy to find answers people are asking more questions. The catch, as almost anyone can post almost anything on social media, their blog, their website people are beginning to increasingly doubt the answers they find.
Customers want to make informed purchasing decisions and that requires they trust what they are told. A recent survey found that 81% of shoppers say trust impacts their buying decisions, only a third trust the brand they buy from.
In the past consumers questions might have been limited to the product specification, the price and maybe payment options. Today’s customer’s emotional and moral perspectives make the process more complicated. Buyers want to focus on ethical and sustainability issues. Not sure that is true? Accenture reports that sustainably market products and services outperformed their conventional counterparts in many areas in 2020. Sustainable consumer packaged goods outgrew the total market. Add to this that we have seen the growth of organizations that calculate ethical consumption for people to access while shopping and you will begin to see that being seen to be an ethical company will bring advantages. Of course, this goes beyond sustainability, treatment of workers, animals, free trade and even disassociating your company from countries where human rights abuse is alleged.
Your brand is a bundle of promises to customers. Customers want more details about those promises. They expect you to deliver against each ethical commitment you make, it the right way at the right time.
Everlane, a fashion retailer, provides a lot of detail about each product on the product page. Information includes details and pictures of where the product was made, how much water it recycles, safe chemical information. It is right on the product page so interested customers can access the information without having to search for it elsewhere on site. Additional details can be found on a page detailing Everlane’s commitment to sustainable. Their promise? Radical Transparency.
We are all familiar with Chatbots that use AI to answer questions with mixed results. Voicebots are coming that will be capable of answering question and provide information in real time. A quick tip, if you are not yet tracking the questions your customers are asking – start now. Work with your product experts to develop answers that can later be incorporated into your voicebot when you are ready. Done properly you can develop a virtual personal assistant which knows nearly everything there is to know about your product and its uses.
Virtual consultations which have gained acceptance during the pandemic will develop further. Bobi Brown Cosmetics and Perfect Corp have partnered to provide personalized beauty consultations. It will not be long before consumers are demanding virtual fitting rooms where they can see how the article they are considering looks like on them. Buyers of furniture will want to be able to see how it fits in their homes. If you can enable your customers to virtually try before they buy and do this better than your competition you will have a significant advantage.
Providers can help folks meet their own personal sustainability goals. Mastercard has launched DO Black – a credit card that tracks the carbon footprint of the users purchases and cuts them off when they reached their personal carbon budget. Folks like these would appreciate a company that helps them identify the carbon impact of their purchases before they buy. Loyalty programs that reward more sustainable purchases would be worth considering.
Although B2C may lead the way B2B will not be far behind. Corporate Social Responsibility CSR is moving away from a tick the box exercise to being a real effort that adds value. Companies will require that their suppliers adhere to good practices. Millennials will soon be holding senior positions in your customers procurement functions. Their expectations will be very different from earlier generations.
Remember earlier I mentioned that only one third of consumers trust the brands they buy? The truth of your claims must be proven. Not all customers will question the accuracy of the information you offer. It is up to you to prove that the information you are making available to customers is accurate.
To prepare for this new buying environment.
Achieving this level of sophistication will take time and money, so be realistic about what your organization can achieve, but do consider starting the journey know. If you are just starting out in business build transparency into your business now. It is a lot easier to do this from day one rather than having to add it in once your business is in place.
If you are established this is your opportunity to get ahead of your competitors, it is better to disrupt your own business rather than have someone else do it for you
Do not underestimate the positive impact of having an ethical, sustainable and transparent business on your employees. We all want to be part of an organization that is doing good for the planet.
Tags: How to grow a business, achieve business success, employee individualism, self-assessment, motivation, the successful entrepreneur, business common mistakes small business start-up; avoid these common mistakes; IBGR.network, Jeremy Gray, Practical Solutions to Difficult Problems
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