Getting From Ideas to Products

In a time when innovation and new product development are vital to remain competitive, large organizations are looking for ways to generate and execute new product ideas while mitigating risk. Increasingly, these companies seek to create a startup culture as a means to generate innovation.

Developing an efficient mechanism for getting products from the idea phase to initial prototype (and then to market) has significant benefits:

  • Quicker idea validation.
  • Cheaper and lower risk idea evaluation versus a full blown product launch .
  • Management has the opportunity to be involved in product evaluation, rather than being removed from the product development and validation process.

Rapid prototyping

This involves instituting processes to quickly convert ideas, even if they are only 25-50% complete, into live products that can be placed the hands of potential users or testers.Rapid prototyping has several requirements and attributes, including:

  • Robust and flexible product development expertise, as the ideas may be broad in nature.
  • Expedited development capabilities, often executed without a complete set of user requirements.

Read more about Getting from Ideas to Products at Innovation Management. Also get updated with our various new programs of Online Learning Innovation Programs and Innovation Process.

 

4 Tricks to Building a Successful Open Innovation Program

One of the most critical professional challenges that employees face today is being able to successfully manage positive change within their organization. Innovation is has become a watch word, with so many divisions not being able to find enough valuable ideas and then successfully manage those ideas into a commercial offering that sometimes companies even respond to customer tickets and bugs and simply label those results as “innovation.”

However, many organizations are still in an experimental phase and need help reaching innovation maturity. For those folks that want to get started, but aren’t sure where to begin we offer these four tips:

Start small

Many departments and organizations are intimidated at the prospect of opening up brainstorming. They worry about the value of ideas and intellectual property .

Build in some room to fail

Not every new project can knock it out of the park. 70% of startups never get out of their first eighteen months, 68% of IT projects aren’t delivered.

Generate some early wins

Not every new idea is complex or disruptive. Some changes are easy to evaluate and easy to implement with big impacts.

Expand

Once an innovation team has proven even some measurable value, it is much easier to apply those same processes and goals to other projects.

For full article visit http://www.innovationmanagement.se/2015/05/20/4-tricks-to-building-a-successful-open-innovation-program/

The Value of Incremental Innovation

In this Blog I want to talk about the value of incremental innovation and why companies should

often focus on this, rather than driving as hard as they can to come up with the next

breakthrough product or service. Incremental improvements aren’t always cool, but over time

they can drive significant business results.

Before proceeding, I should once again outline the kind of companies that I often work with.

They are not the Apple’s, Google’s or Amazon’s of the world. I tend to work with organizations

that are well established, not at a point of imminent collapse, and often trying to be

innovative, but struggling to execute on their ideas. No company that I have ever worked with

has a shortage of ideas.

A focus on incremental innovations, and the activities that source and develop them, make

sense in the following context:

Pipeline Management: Too often I see organizations filling an innovation pipeline with

large-scale, broadly scoped, long-term innovations that leave their programs vulnerable. I say

the world “vulnerable” with purpose. Innovation programs are often politically sensitive and

need to be extremely conscious of the constant pressure to undermine their achievements and

goals (read this article for more details). By having a pipeline that is balanced, there is a

better chance that at least some activities will be implemented, balancing out some of the

failures which you are sure to encounter.

Starting a program: Often leaders of new innovation management programs are tempted to focus on big

thinking. And why not? It is sexy, cool and fun! The reality is that new programs will face

some healthy skepticism by their leadership, especially within established business units, so

it is important to get some runs on the board. By quickly demonstrating success, even with

smaller ideas, you are able to create an impression of momentum and a build towards bigger

ticket thinking.

Pressure on results: Innovation leaders are often told by leadership that they want “Big

I” ideas, but at the same time (or soon after) there is pressure to generate immediate

financial impact. In this case you just don’t have the time to develop the big ideas, so it

can be a better position to generate some incremental improvements. This can take the

immediate pressure off and allow you to demonstrate a rate of success in order to build some

political capital to focus on bigger ideas.

Generating Stakeholder buy-in: If you are struggling to secure and maintain stakeholder

buy-in, focusing on incremental improvements can demonstrate your ability to drive change,

without destroying their organization (often their concern) or needlessly redirecting

resources. By building success, aligned with their needs (an important point to understand),

you can secure their buy-in and support over time.

Launching innovation challenges: There is no shortage of innovation platform vendors in

the marketplace, and many of them will encourage you to run challenges or campaigns that focus

on big, bold visions of the future. This is especially true when they are launching their

product into your organization, as they want substantial engagement metrics to justify

investment in their platform. In my experience, and this may be controversial, launching with

these “Big I” crowdsourced challenges early will encourage a lot of employee excitement.

However if you don’t have an established model of idea execution, that excitement will

dissipate (at best) or turn negative when the participants realize that their ideas haven’t

been built. By focusing on smaller areas of improvement, especially when launching these

efforts, you can build community trust and demonstrate real traction with the winning ideas.

Cultural pushback: Many mature and regulated organizations often have cultures that

pushback on new thinking, in any form. Within this environment, it is important to assess how

much you can enhance the culture, in terms of new ideas development. Focusing on smaller

improvements can be a way to limit potential pushback, and give you a chance to demonstrate

that something can be built effectively within that culture. By the way, a goal should

absolutely be to change that culture over time.

In conclusion, I am not saying that innovation program leaders should focus on incremental

innovation at all times. What I am saying, is that just because an idea is small, or a program

is in place to generate responses to more modest issues, it shouldn’t be discarded. By

considering the broader context of the organization’s culture, and also the ecosystem of

innovative activity within an organization, incremental improvements should make some level of

sense. These smaller ideas aren’t going to get you on the cover of Time magazine, but they may

help your retain you job and drive real, cumulative business impact over time.

Innovation is not always nice to have. Unless you play-to-win!

Because of today’s business hype for innovation we encounter situations where there can be too much of a good thing going on and successful companies tend to be aware of this potential pitfall. As much as a complete lack of innovation will lead to failure in an organization, left unmanaged, too many innovative ideas can cloud the judgement on which ideas are truly great. Innovation management therefore is crucial in the success of any organisation.

Professor Everett Rogers, communications and journalism expert at the University of New Mexico, gives the classic definition of what characterizes an innovation in a book entitled ‘Diffusions of Innovations’. He argues that anything claiming to be innovative must first be relevant in its spread and impact on society. Put it another way, whom will benefit from it really? Take the example of the metric system: there has always been resistance to certain innovations like this one. As we already know not everybody around the world is using this system of measurement although for others it is the long ago accepted norm.

So what could make us choose a certain innovation? It could be that we choose the ideas that feel just about right for our needs. But that doesn’t necessarily mean that we can translate the same innovation to any group or market, or that implementing that idea will have the same positive effect everywhere. If you would have just invented the metric system how would you pitch it to a venture capitalist and would you even bother?

Just because it’s a great idea, it doesn’t mean that people will use it. The key is to pitch that idea to the right market at the right time. Context is everything if innovation is going to succeed. Once the key stakeholders have been identified it is then possible to elaborate a strategy by planning a process around the organization’s needs and culture and making sure that the right people are involved at the right stages to help the process flow in the right direction.

Play–to–win innovation strategy

The following case study of this innovation strategy at Procter & Gamble will reveal the imperative of a calculated, inclusive and flexible approach to solving a problem.

It was no secret that by the late 20th century, P&G had lost its originality. Previously a market-leading innovator across its flagship categories of detergents, dentifrices and diapers by the mid-1990s senior P&G management admitted that they had not had a breakthrough innovation since 1985, and the company’s continued market dominance in the years ahead was a question. Although P&G was still a formidable marketing machine, the organization had become slow moving and conservative. It was dominated by what competitors called the proctoids – bureaucrats in suits. In 1997, realizing these problems, there was a ‘think-in’ among a half-dozen senior executives.

The goal was to equip P&G to dominate the consumer goods industry in the 21st century as it had in the 20th. During that meeting, they developed a Play-to-Win strategy. They planned to create a more flexible organization and to increase the speed and quality of innovation. They also focused on increasing the speed of commercialization of new products. In addition they wanted to move the company’s focus to higher growth, higher margin business such as healthcare and personal care. Senior management was aware that they needed to overcome many obstacles to attain their goals. P&G’s new product commercialization process was painfully slow.

Disagreements between team members had frustrated previous attempts at significant collaboration and change. On top of that the working relationship between the brand managers and the technology development managers was often strained and painful. Despite the obstacles, senior management was determined to succeed. With the appointment of Durk Jager as CEO, a zealous pursuit of change followed. He changed the organization, the innovation processes, and the priority of innovation and almost every other facet of doing business at P&G.

The problem was that Jager tried to change too much too fast. As a result many staff at P&G became distracted by the changes and confused about the new way of doing business and had trouble performing. Growth slowed, leading to three profit warnings in three months. Several new product launches failed and the share price slumped along with morale. Within 18 months, Jager was forced out. With Jager’s departure, many felt that the drive for change would end and comfortable ‘business-as-usual’ status will return. They were wrong. P&G appointed A.G. Lafley as the new CEO, a well-respected employee of the company with 25 years of experience.

In contrast to Jager, Lafley paid a lot of attention to operational details, and used a collaborative approach to gain buy-in. He reduced the overly ambitious approach, scaling back aggressive goals from around 8% annual growth. But more importantly, he maintained the drive to change (innovation) but focused on priorities rather than inundating the organization. Lafley consolidated global business units from seven to four and fine-tuned the relationship between them and the market development organization.

He followed this by devolving decision-making power to the units. Restoring focus on leading brands he reminded everybody that the measure of success was not innovation per se, but the customers.

The lessons in innovation from Procter & Gamble

As we have seen in the P&G case study organizational structures can often be a barrier to innovation. The clear conclusion is that organizations need systems in place that provide the proper measurement, motivations, incentives and rewards to foster innovation that is aligned with the innovation strategy.

From our experience at Qmarkets, quality must come before quantity. A platform system allowing significant and meaningful stakeholder collaboration, evaluation and measurement of the best ideas could be the missing link to managing the strategy and delivering innovations that will actually benefit a large number of people.

Innovation consultants Davila, Epston and Shelton (2006) argue in their book “Making Innovation Work” that the primary unit of innovation is not the individual but the network that extends inside the company (R&D, marketing, manufacturing) and outside (including customers, suppliers, partners and others). Innovation requires developing and maintaining this network as an open and collaborative force, which is no easy task considering the complexity of relationships, motivations and objectives within these different groups of people.

The concept of innovation platforms, successfully used in various companies provides the required framework for the network. They can include networks of people inside and outside the company that have pertinent knowledge of the platform area, including customer insight, supply chain knowledge, and technical expertise. This enabling technology known by the name of idea management software, allows companies of all sizes to make innovation an integral part of their business without disrupting the overall organization.

The next important question is how to check the reliability of ideas at the different stages they go through within an innovation process, or workflow? Carl Franklin (2005) the author of Why Innovation Fails: Hard –won lessons for business mentioned the Delphi technique.

At Qmarkets we employ this technique along many others to improve the innovation process by making it easy for users of our innovation management platform to appoint the experts within the organization and within their particular field of expertise, and then involve them at key stages in the decision making process. The experts are required to give their opinion on a certain idea and encouraged to follow-up on discussions. The results of this process are then checked by managers who maintain a broad view of the strategy thus ensuring the viability of the ideas, which can be turned into innovations.

The results of applying the right innovation strategy re-inforced with the right toolkit at the right time, targeting the right audience and involving every stakeholder in the business can lead to an increased ROI, grateful customers and a good balance between the creative flow existent in the human potential of an organization and delivering market results.

A Process for Innovation Planning

All too often, hastily planned brainstorming sessions bring up a lot of good ideas that somehow never get used, while the boring kinds of ideas you are trying to get away from seem to be used again and again. One reason for this is the lack of an innovation plan, according to Jeffrey Baumgartner.

“We need fresh ideas for the Acme proposal. Let’s all sit down and brainstorm ideas some time this week.” How often have you heard something like that at your office? How often have the creative ideas of the brainstorming session been implemented? All too often, hastily planned brainstorming sessions bring up a lot of good ideas that somehow never get used, while the boring kinds of ideas you are trying to get away from seem to be used again and again.

One reason for this is the lack of an innovation plan. I am not talking about a grand plan for your entire corporate strategy. Rather, I am talking about developing an innovation plan for a single issue or project.

Your Goal/Problem

The first step of your innovation plan is to state the goal or problem. Imagine you are a product manager at a mobile telephony company and want to introduce new services to your clients.

Before putting stating a problem like “new services”, you need to think about your goal in a little more detail. Do you want to develop new revenue streams for your company or do you want to add additional free services? Are you targeting a specific group ­ such as business users or teenagers? Or should determining the target group be part of your goal? Bear in mind that I have used the term “goal” here. Think not just about what kind of ideas you want ­ but the goal of the ideas. Finally, be sure you express the goal in a way that is clear to everyone on your team.

You also need to establish how far you will take the innovation. Are you simply preparing a proposal for management or will you be responsible for the entire project life-cycle or does the limit of your responsibility fall somewhere in between?

Once the goal is stated, you should also consider several other issues:

Participants: Who will participate in your innovation plan? Can you solicit ideas from the entire organization or will you be restricted to a specific project team? Who can you call upon for evaluation and pre-implementation?

Budget: What is the budget for capturing and developing this idea?

Resources: What resources will be available for capturing and developing this idea? What tools do you need? Can you hire facilitators or an ideas campaign tool? Can you hire facilities for brainstorming? What internal resources will be available to you?

Timeframe: How much time do you have to capture and develop your ideas.

Reward(s): are you offering any rewards for ideas? You might want to offer a small reward for the best ideas. One well known company offers small cash rewards and dinner coupons to people who contribute exceptional ideas. Others offer gifts, points or recognition. If you are working with a relatively small team, you might consider rewarding the entire team at the completion of the product ­ or at major milestones if the project is long-term.

If you like to push the envelop and have fun, consider adopting a theme for this innovation plan. Themes are not necessary, but can be an effective means of focusing creativity in new ways and tying together various aspects of innovation management. Keeping to our example of a mobile telephony company, you could adopt the theme of “amusement parks”. In other words, you would use amusement parks as a metaphor when generating ideas, implementing ideas and even naming new services that you devise. This doesn’t mean that everything has to be about amusement parks. Rather, amusement parks are simply a focus of the team’s thinking.

Idea-generation methods

Now, you are ready to plan how you will generate ideas. Don’t limit yourself to brainstorming, there are several effective team ideation approaches worth considering:

Brainstorming: is best when time is limited or the team is relatively small and in one location. Brainstorming, in a nutshell, is getting a group of people together in a space and shouting out ideas for a limited time period. People build on each others’ ideas and the creative energy pushes people to think more creatively and propose more radical ideas.

Ideas campaigns: are best when there is more time or the team is large and dispersed across several locations. An ideas campaign is rather like a long, drawn out brainstorming session where people come in to the campaign from time to time, share an idea or two, build on other people’s ideas and then leave. An ideas campaign usually lasts from two to six weeks.

Experimentation: is best when ideas are technical in nature. Experimentation is basically a matter of putting together various configurations and seeing how they work. Experimenting would not be an effective approach for our mobile telephony company example of developing a new service. On the other hand, if the innovation plan was about improving the efficiency of sending multimedia data across a GSM network, experimenting would probably be an important part of your innovation plan.

Other approaches to ideation can include outsourcing creativity to another company, buying the rights to an established idea or buying a company that has innovative products you would like to be able to offer your customers.

Once you start generating ideas, bear in mind that there is a tendency in teams to embrace the first creative idea that you capture. This can be a mistake. Rather you should push that first creative idea further and see if you can make it even more creative. At the same time, you should push people to come up with more creative ideas. This pushing for further creativity is important and should be included in your innovation online learning plan.

Pushing ideas further could be a matter of doing brainstorming sessions on your best ideas, in order to develop them further. Alternatively, you could ask people to think about the best ideas overnight and give you more developed ideas in the morning. “Sleeping” on an idea is an excellent way to push it.

Pushing people’s creativity further is about positive feedback, explicitly encouraging more radical thinking and inspiration. Inspiration includes all kinds of things, such as: bringing in professional brainstorming facilitators; taking the team to an art museum or ballet performance; participating in activities that open the mind; and using alternative brainstorming approaches.

Finally, you need to allot a specific time frame for the idea generation phase.

Initial evaluation

Once you have captured some good ideas, you need to evaluate them to determine which are worth taking further. The 5×5 criteria matrix is probably the most efficient initial evaluation method. To do a 5×5 criteria matrix, you simply determine five criteria by which you can rank promising ideas. You then look at each idea, determine how well it meets each criterion and grant it 0-5 points for that criterion. Once you are finished, add up the points and you will have overall point scores for each idea. This is a very good basis for determining which ideas should go on to the next stage.

Other people prefer open discussion meetings for determining which ideas to take further. These can also be effective, although such meetings are usually less efficient and less objective than criteria based evaluation ­ at least for the initial evaluation. We recommend that you have an open discussion based meeting AFTER the criteria based evaluation in order to clarify any outstanding issues and discuss how promising ideas could be improved further based on the evaluation results.

You also need to allot some time to the evaluation phase.

Report

If you are not involved in implementing the idea, the chances are your responsibility will end with making a report to your superior or to a project development team. If so, you can readily prepare a report based on the top ideas and their evaluations.

If you are involved in the implementation, on the other hand, you will want to go directly to the next step.

Pre-implementation

Pre-implementation is a preliminary action, such as building a business case, doing market research, making a prototype or running a limited trial in order to test an idea.

You will doubtless already have standard pre-implementation methods in your company for developing ideas into products or services. Nevertheless, it is important to include the pre-implementation in your innovation plan. You also need to determine how much time to allot the pre-implementation.

Implementation

By now, you should have a small number of very good and well tested ideas. It is time to implement them.

By developing such a structured innovation plan for specific projects, you can look forward to more creative ideas and a higher level of implementation of those ideas.

Translating Unseen Needs into Innovations

The world is changing, yet people constantly assume, incorrectly, that tomorrow will be like yesterday. When business leaders make this mistake, the outcomes are generally bad because opportunities are lost. Competitive advantage is gained with the ability to transform insights into useful innovations by seeing the unseen. In this chapter excerpt of Agile Innovation, Langdon Morris explains how ethnography drives better innovation at a top-five U.S. financial services company.

Part of what is so fascinating about the transformation process is that, once successful examples are revealed, almost everyone immediately grasps the significance, and the world is changed. It’s a paradigm shift.

Even after the telephone was invented, quite a few people thought it had no value. Many companies, quite contented with the communication tools they already had, shortsightedly turned down the opportunity to own Alexander Graham Bell’s technology, and indeed a memo written at Western Union in 1876 said, “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” An enormous opportunity was missed.

This is but one example among a great many. A humorous list of similar comments is circulating on the Internet, in which very smart and famous people reveal their incapacity to imagine the usefulness or the possibility of new technology.¹

They said what?

On a Web page titled “They Really Ought to Have Known Better,” you can view a very long list of comments that are humorous in hindsight, such as²:

“Drill for oil? You mean drill into the ground to try and find oil? You’re crazy.”

—Drillers who Edwin L. Drake tried to enlist to his project to drill for oil in 1859

“Stocks have reached what looks like a permanently high plateau.”

—Irving Fisher, Professor of Economics, Yale University, 1929

“Louis Pasteur’s theory of germs is ridiculous fiction.”

—Pierre Pachet, Professor of Physiology at Toulouse, 1872

“The abdomen, the chest, and the brain will forever be shut from the intrusion of the wise and humane surgeon.”

—Sir John Eric Ericksen, British surgeon, appointed Surgeon- Extraordinary to Queen Victoria, 1873

“We are probably at the limit of what we can know about astronomy.”

—Simon Newcomb, 1888

Noted computer industry pioneer (in mainframes and minicomputers) Ken Olsen pronounced in 1977 that no one would ever want a computer in his or her home. (Today, not so many years later, my home has more computer chips in it than I can count.)

Lord Kelvin, quite a talented scientist, nevertheless revealed his own ignorance when he proclaimed the heavier-than-air flying machine to be impossible. He made this remark just a few years before the Wright brothers proved him wrong.

Speaking of airplanes, Sir Sam Hughes, while Canadian Minister of Defence, commented in 1914 that “The aeroplane is the invention of the devil and will never play any part in such a serious business as the defence of a nation.” Marechal Foch of the French War College said something quite similar around the same time, because it was a commonly held opinion.

These are examples of people making predictions based on their experiences of the past. This phenomenon is notable only because it’s so common—people constantly assume, incorrectly, that tomorrow will be like yesterday. When business leaders make this mistake, the outcomes are generally bad because opportunities are lost. Later on, when things do change, we wonder why we didn’t see something so obvious and simple, something that was staring us in the face all along.

Once you master the ability to see when things really are broken, countless innovation opportunities will unfold before you. You’ll then start asking questions such as, “How could this be improved through a different approach, a new process, or a new technology? How could this be radically improved?”

This way of thinking, of course, goes to the roots of the very process of learning, and developing skill in this way of seeing differently becomes a core competence that you can apply over and over in many contexts. The power of your new competitive advantage will be the ability to transform insights into useful innovations by seeing the unseen (understanding unarticulated needs), translating unseen needs into innovations (anticipating future or hidden requirements), and bringing them to market.

Furthermore, these competences must be developed at every level of the organization, not only in innovation or in research and development teams. In fact, the sales staff may be the most important group, because when they understand what hidden information is, then they can recognize it and use it to become better at selling, and when they know what good design is, they’re also better at selling. They have done this quite successfully at Wells Fargo Bank, a top-five U.S. financial services company.

Ethnography achieves $20 million in top-line growth at Wells Fargo

Wells Fargo embraces the power of ethnography and uses it extensively throughout its operations. For example, the bank conducts ethnography studies at client sites to uncover innovation opportunities both internally and for its clients, and to provide feedback to improve products and services.

Steve Ellis, EVP at Wells Fargo, along with EVP Pam Clifford and senior vice president Kim Pugh, had a brilliant idea to do a technology transfer project with coauthor Moses Ma and Michael Barry, a professor at Stanford’s legendary d.school. The objective was to teach the bank’s customer insight group how to do ethnographic research.

Ellis, an extreme snowboarder, explains:

When you go heliskiing, it’s about the feel of the mountain and reacting to the texture of the snow and the hill. It’s about intently listening to yourself, your body, and your emotions. In business, it’s about listening as closely as you can to the customer. So it made sense for us to learn ethnography, which is all about listening harder. We created a small team to literally camp out at a customer site for several days to observe how customers do their jobs and interact with financial services. I felt this would give us a fresh approach to look for ways to reshape our services.

Vice president Paul Kizirian was tapped as the first official Wells Fargo ethnographer because of his keen skills as an analyst, paired with a remarkable level of empathy. He manages client studies in the Southwest and special projects. Kizirian explains the correlation between listening harder and being innovative:

Listening more intently to our customers was both our objective and our greatest challenge. We needed to find a way to sit with the individuals who do the actual work in a customer’s back office. To do that we needed to align the interests of several key people: the bank’s relationship manager, the customer firm’s leadership, and the individuals with whom we’d be sitting.

At first the program was a hard sell because nobody had heard of ethnography. Relationship managers were hesitant: “Let me get this straight, you want me to introduce your ethnography service to the CFO [chief financial officer]?” And customers would say, “Okay, what is that . . . and does it hurt?” So we quickly realized that we needed to give something of value to our customers so that they would let us sit and observe their back-office operations. The service was free of charge, and we threw out the notion that they would only get what we paid for by wrapping up each study with a top-shelf consulting deliverable. The customer received insight into how they could improve business performance; relationship managers gained a much deeper understanding of their customers; the lives of customer employees were improved; and the ethnography team analyzed the data to identify opportunity areas for Wells Fargo.”

After a careful start, the group’s first few studies were so successful that news spread quickly through Wells Fargo’s grapevine. Before long, relationship managers were calling to put their top customers into the pipeline. Even though the group could manage only a handful of studies at a time, the service gave leadership something to talk about as not only a source of innovation but also an expression of the bank’s commitment to listening to its customers’ needs.

Customers and relationship managers started having deeper conversations, and although customers are, of course, never obligated to implement anything that is recommended, the team tracked results and found an unanticipated so-called side effect—every customer that participated in a study subsequently bought more solutions from Wells Fargo.

One customer, a global sugar manufacturer, invited its long- time relationship manager to its global banking roundup meeting for the first time, marking the first time that Wells Fargo had a seat at the proverbial table. Its CFO commented about Wells Fargo: “This is a bank that really cares about us and wants us to succeed—it’s not just a bank, but a partner.”

Listening harder has also led to many other successes. Here are two.

Ethnography Drives Better Innovation Management

Ethnography studies are powerful at accurately identifying previously undiscovered customer needs, and in one case, ethnographers identified an unmet need that kicked off a new service for the bank. Today, this service helps hundreds of large corporations manage billions of dollars in cash around the world.

It all started with cash managers, who log on to various portals to aggregate account information for their firms. Then they call, e-mail, and fax others within their company to ask about their cash needs and put all of that into an Excel spreadsheet to assess how much cash they will have and need in their accounts after all transactions settle at the end of the day. At one company, the CFO mentioned, “Every day we end up in both a borrowing and investing position.” One cash manager who works fast within a limited period refers to this deadline as a ticking time bomb, because daily she hunts down information from 15 people across 10 subsidiaries and three time zones.

This turned out to be a very consistent need across many customers, so Wells Fargo developed a next-generation treasury management workstation. Understanding the core needs accelerated product delivery by 12 months, saved millions by avoiding unnecessary features, and elicited customer responses, including “How did you know this is what I’d need?”

Creating a simplified solution that also solved customer needs meant that the service could be offered at a price one-tenth that of the nearest competitive offering.

Empathy drives $20 million in top-line revenue growth

The studies and final presentations were not a sales effort, yet customers bought services they had resisted for years, surprising the relationship management teams.

Ethnography studies also led to new ways for Wells Fargo to sell its services. After each study, customers described the shift in the relationship between customers and the bank as “being on our side.” The studies and final presentations were not a sales effort, yet customers bought services they had resisted for years, surprising the relationship management teams.

At one point the head of Wells Fargo’s Treasury Management sales asked a sales consultant, “What? They finally bought what we’ve been telling them for years?! I’ve been out to meet them for two to three years and they’ve never budged. What was it that did it for them?” to which the sales consultant replied, “It was an ethnography study.”

Because of these successes, Wells Fargo’s sales leadership asked the ethnography team to train the entire sales force of more than 800 to perform scaled-down versions of ethnography studies to give Wells Fargo an edge in the market.

The key learning is that sales professionals put aside their expertise so that they could listen, have empathy, be humble, and be curious about what it’s like in their customers’ shoes. By doing this, salespeople were able to transform their conversations, and Kizirian estimates that for Wells Fargo’s 1,000 relationship managers, empathy and ethnography drive a contribution of $20 million in new sales each year.

In summary, ethnography at Wells Fargo identifies the right problems to solve, and then innovation management helps find the right solutions. It helps increase customer satisfaction, customer loyalty, and ultimately new revenue, and it is as effective with new product development as it is in the sales process.

One of the keys to success is that listening and empathy aren’t just buzzwords or marketing gimmicks; they’re skills practiced throughout the Wells Fargo organization. At the top, Ellis practices what he preaches—he regularly studies what the ethnographers hear from customers, and he acts on it. From the front line to the back office, it is now a cultural norm for people within Wells Fargo to listen to their customers actively.

Starting an Innovation Program? A Strategic Approach to Create Success

Many innovation leaders tend to be tactically driven, but their corporate leadership is looking for more strategic planning and analysis. This tension often contributes to high turnover in innovation management roles, based on a misalignment around leadership’s expectations. In this article Anthony Ferrier suggests perspectives and actions that should be considered part of your innovation strategy plan.

In the past couple of weeks I have been asked by some significant organizations (one an Asian-based conglomerate and the other a U.S. Federal Agency) how they should start an innovation effort. Though on the surface different, they share similarities in terms of their large, complex structures, a need to create new ideas and a desire to engage their employees.

Too often I come across organizations that think their first step should be to launch a crowdsourced challenge or campaign. While this can make sense in the context of “testing the waters” and quickly generating some visible activity, more value can be driven by a well-developed strategic plan.

In my experience, many innovation leaders tend to be tactically driven, but their corporate leadership is looking for more strategic planning and analysis. This tension often contributes to high turnover in innovation management roles, based on a misalignment around leadership’s expectations.

What perspectives and actions should be considered as part of an innovation strategy plan?

  • Defining success: What is going to be considered great? On the surface it is a simple question, but by asking this of yourself and your stakeholders, you are generating thoughts and concrete goals around an often nebulous topic. In addition, you are demonstrating that you are driving towards a goal that your stakeholders should have a sense of ownership around. If they agree to the goals, there is more pressure on them to support your drive towards them. Agree the goal and work to exceed it at every point.
  • Leadership support: Considering who would be a great sponsor of your effort and the approaches to generating broader leadership support are essential to driving success. Effective leadership support directs resources towards new idea development, gives employees the permission to innovate and provides a communication platform. Keep in mind, you may not get your desired sponsor initially, but put the goal out there and work towards finding the right person over time. Beyond the single sponsor, it is often worth considering how to engage a broader group of leaders (possibly from specific business units) to guide efforts going forward. These committees or councils can be stand-alone efforts, or align with existing groups that are already in place.
  • Ecosystem mapping and integrating: Within large organizations it is rare that a single group or individual controls all innovative activity. As part of this planning process it is important to understand the various innovation activities and actions within the organization (read more on this here). More broadly, beyond that they should build processes and approaches to support continued communication and leverage, with a goal of partnership or integration of efforts.
  • Scale of ideas: Understand the size and scope of ideas that you are looking to generate and assess how you will be able to develop thrm. By first considering the back-end implementation of ideas, you will make more informed decisions about front-end activities. In addition, this perspective needs to include not just what individual ideas will look like, but what makes up an actively managed idea pipeline.
  • Scope of input: Decide which stakeholder groups should have input to innovative activities. Do you want to focus efforts on a small sub-segment of employees, or reach out to a broader range? Is a specific business unit or region important to your success, or not? Do you want to focus on internal resources, or seek input / support by partners externally? Deciding on appropriate stakeholders will help define the type of activities undertaken.
  • Activity planning: There is an infinite variety of activities that organizations can use to generate new ideas, and hopefully get them executed effectively. Including an outline of the various activities that an innovation program may look to launch is essential. It may also help to include an honest assessment of costs, expected impact, stakeholder involvement and plans to improve and scale over time.
  • Resourcing management: Most innovation efforts that I work with, whether in a large or small organizations, have limited resources to support their efforts. Including directions and thoughts around the sourcing and allocation of resources will help frame your planning. It is also worth considering unconventional approaches to securing resources, including supporting employee networks and broader crowdsourcing efforts.
  • Multi-year perspective: With these plans it is important to set out a multi-year approach to innovation development. Generally activities start smaller and build over time, assuming agreed performance targets are being achieved. Beyond year-1 the planning can be kept vague, but this kind of approach emphasizes that this is not a passing initiative or corporate fad.
  • Goals and metrics: I have talked about this in the past, but I can’t emphasize the importance of focusing on the development of specific metrics for any innovative activity.

This is clearly a lot of information, and the resulting document that outlines your plan could be as long as you want it to be. In a previous life as a corporate strategist I found that every time I put together a word document, it was essentially for my own reference (no one would ever read it, despite my best nagging efforts). I do have a great innovation program business plan template in PPT, so feel free to reach out to me directly if you want me to send you a copy (Anthony@culturevate.com).