Tag Archives: innovation

More examples of Transformation Design

In an earlier posting, I had written about Transformation Design from a business to consumer perspective.  Today, I will discuss business to business examples.  Again, these companies are engaging in designing a system of activity that drives the positive change that the consumer desires to see in his/herself and his/hers community.

Intuit a software company that is well-known for their accounting and tax software, has developed an online forum that is dedicated to help small business owners.  This forum has become a community of users with a common purpose to share, collaborate and discuss ideas.

I had written in earlier posts about the commonality of crowdsourcing and the development of user contribution systems in many businesses.  On Intuit’s website,  there are online guides that facilitate small businesses with the learning and the implementing these tools to their business needs.

A success story for the implementation of a user contribution system is Starbucks as it has been active with crowdsourcing from users for new ideas and innovation to improve their customer experience.  They have an online forum where users can voice their concerns and suggestions.  Some innovations today such as the Starbucks Card, which is a loyalty incentive that enables customers to have a free refill and free two hours of daily Wi-Fi use were ideas from this online forum.

American Express has opened up an online resource for small businesses complete with articles and videos from experts to help and improve small business practices.  For examples, there are articles about the benefits of blogging, methods to improve presentation skills and a number of other self-help and business improvement tips.

American Express and Intuit are engaged in Transformation Design in the context of business to business marketing.  Both approaches (design) are different, but the intent (system) is similar in bringing about positive change in small businesses and its personnel.  For reasons similar to Transformation Design from a business to consumer context, the business to business context also provides goodwill, positive branding, and the positive change to the user and their community as benefits for companies that use and embrace Transformation Design.


Designing Innovation

There is an alarming number of preventable deaths in US hospitals each year according to this article from McKinsey Quarterly, and thus, there was an initiative by a non-profit organization called the Institute of Healthcare Improvement (IHI) that set a mandate to reduce the number of preventable deaths by 100,000 in one year.  It succeeded after one year, and it was able to enroll 75% of all US hospitals.   

As a non-profit, it neither wielded authority nor influence on hospital board of governors, it also faced the unyielding attitudes towards change, differing stakeholder goals, shortness of resources and time  and as such it already faced an uphill battle for this initiative to be implemented.  

How was IHI able to reach its target despite these enormous setbacks? It had to make its initiatives easy to understand and to remember for all stakeholders (nurses, doctors, etc.).   In peer-reviewed medical journals, there is a plethora of information that aids in the amelioration of hospital operations.  IHI took the time consuming part of disseminating this information and presenting and selecting six key criteria that can help with its mission.  

This program was flexible in that not all six criteria needed to be followed and adhered to.  Still, it was crucial some of it required stakeholders to be aware of and adhere to.  Goals were clearly defined with a set timeline and set metrics.  The long term goals (lofty) and short term goals (concrete) were in sync.  Accountability was taken into account by having weekly conference calls and mass emails.

Hospitals that were pioneers of this program, could support and help other hospitals that are starting to implement this initiative.  To encourage additional hospitals to participate, a national network of IHI participants was formed.   Actually, an additional benefit of this alliance, included the motivating the current network of hospitals towards excellence.

I think that both individuals and businesses can learn from this IHI case study.  By defining a clear problem, and defining a clear long-term and smaller and reachable short term goals, using a network of like-minded participants, and thinking in the shoes of the party that one wants to influence.  Anticipating the client’s needs and making their lives/jobs easier by completing the tasks that maybe resource and time intensive and be flexible and understand that not all implementation steps maybe followed.  By combining all of the above should yield solid and sustainable results.

Design is in the details

Yesterday, I had posted about a video from Charles Leadbetter about how users through crowdsourcing and open-innovation are contributing innovation of products/services through collaborative and interactive channels.  Today’s discussion is about design, and how the users are able to design products/services that do not necessarily need to solve big issues but may solve smaller ones, which are very important.

This talk was from Paul Bennett, creative director of IDEO.  He has given multiple examples throughout this talk about solving tiny solutions that delivered impact from hospitals to Ikea’s children storage unit to water pumps in Kenya. 

In the case of the hospital in Minnesota, solving tiny solutions was able to deliver a big impact.  The hospital was interested in the ameliorating the patients’ experience.  When IDEO investigated the users’ experiences, the changes that needed to be made were not big systemic ones, but smaller ones. Some ideas included attaching mirrors to the gurneys, to enable the patients’ to see the nurse or doctor when they were being transported around.  They involved hospital staff in their input to make the patient’s experience more enriching. A nurse suggested installing a whiteboard in the patient’s room so that notes, drawings, messages from the doctor/nurses/family/friends can be showcased and brighten an otherwise mundane room.  

Other examples of design innovations that incorporated thinking small and delivered a big impact came from the inventor of velcro.  He was walking through a field and was covered with burrs and that became his inspiration for velcro.

View objects peripherally to find opportunity. For example, notice on the street when there is a yellow line, people inadvertently follow it without any instructions.  Another example is if people put their empty cups (garbage) in one place, everyone else puts there cups there too.  Companies should pay attention to how people come up with their own design experiences and adapt their designs to improve this experience.

Start from scratch, the mind should be fresh. Throw out any pre-conceived notions.  When Ikea had to design a children’s bookcase, the designer understood that the idea of storage to children was quite different than grown-ups, children play on top and below big objects.  The designer was able to design a storage unit underneath tables, where children can place their toys. 

Pick battles big enough to matter, but small enough to win. For example, in Kenya, IDEO was sought to design a water pump that can be used by villagers.  It had to be compact enough to fit on a bicycle.  This pump had to be cost effective.  It incorporated both effective form and function mechanisms to enhance the lives of the villagers.

I believe that being able to think and feel from the user’s perspective is paramount to designing user-friendly products/services.  This certainly extends to so many different facets in life including communicating with people.  Much too often, the message and body language can be disparaging and derisive to the intended audience, and by empathizing with the intended audience, communication becomes much easier.

Innovation from users/consumers

Who invented the mountain bike?  A big bike company? No, it was invented by a group of bicycle users (consumers) that were frustrated with the existing road bikes.  Charles Leadbetter speaks about how ordinary people, rather than large companies can innovate in this video.   

Mr. Leadbetter mentioned that often consumers are ahead of the producers in developing innovations because: 1) There is much uncertainty that exists when radical innovations affect many people.  There is a greater need for innovation for this uncertainty, and consumers/users are quicker and more adept to identify and find methods to deal with this uncertainty. 2) Users are the source of big disruptive innovations.  Large companies rely too much on past success. I had posted earlier, this will create the downfall for many big companies.  His example of rap music clearly illustrates that form of music would have been difficult as an invention by large companies.  3) Many of the users are passionate about their product/service and are willing to work on developing new innovative product/service during their leisure time and completing this to a high standard.  These people possibly feel bored at work, and focus their energy on their passion.  

As I had posted earlier here and here, there is a battle between open-source innovation (usually crowd-sourced, grassroots) versus closed-source innovation (traditionally large companies). Many of the large companies have tried to stifle the open-source innovators that engage in interactive and collaborative activities.  Mr. Leadbetter thinks that an emerging trend will dissolve the differences between closed-source and open-source innovation, as it will no longer be clearly defined. For example, as I had posted earlier about the use of developer tools on existing websites such as Amazon, Facebook, LinkedIn and Twitter, where the users are able to develop their own tools and widgets with resources and platforms such as a developers’ kits (API) that are provided from these sites.

This video corroborates the findings in my posting about the eight emerging trends for businesses.  Crowdsourcing and collaboration are all future trends in innovation.  It turns users into producers, and consumers into designers. Being able to have a mix between the traditional and emerging sources of innovation enables a structure to be in place, but also dynamic in identifying and designing products/services to improve the lives of the consumer.

Emerging technological trends for businesses






What are some emerging technology trends that will change and reform businesses and the economy?



This article from McKinsey Quarterly discusses eight trends can be categorized into three subcategories: Managing Business Relationships; Managing Capital and Assets; and Leveraging information in new ways. 



The next four trends are categorized under the “Managing Business Relationships” heading.



The first is Distributing Cocreation – This is when suppliers, customers and contractors can aid in product/service development.  By shifting more power and ultimately more autonomy to outsiders that work together, costs and lead times can be reduced by getting different insights during the development process and forgoing some of the bottlenecks associated with having total control of the innovation process.  The notion of a open-source innovation was discussed in this earlier post. 



Companies will need to compete with each other in order to attract the best and most innovative contributors.



The second trend is “Using Consumers as Innovators,” and is facilitated by the growth of the web 2.0.  Customers are looking to be engaged with one another or with an organization.  Customers are increasingly being engaged by the their involvement in the development, testing and marketing (viral marketing) of products or services.  An example of is Wikipedia.  The accuracy of this online encyclopedia is almost as accurate as Britannica’s. 



With this trend, development cycles and costs can be reduced, while understanding the customer’s behavior and wants can be easier.  The cost to attract customers is lower, and retaining customer loyalty becomes easier. Companies also need to be aware that the customers that would be involved in the development of their product or service is a small segment of the overall market, therefore, the developers’ needs and wants maybe different than the overall market.  Often customers’ needs and wants are immediate and not long term. 



The third trend is “Tapping into a world of talent”, as the internet is becoming more interactive with new communication and collaborative tools, outsourcing some functions of a business to specialists, talent networks, and freelancers is increasingly more viable from a cost and functional aspect.  As I had alluded to in yesterday’s post, some advertising agencies have outsourced their creative, account management and media buying departments.  Many companies would focus on their core competencies and not have the burden of being tied down to those other functions. 



The main task is being able to harness the global talent pool, managing the existing workforce and being able to integrate the work in a cohesive manner. 



The fourth trend is “Extracting more value from interactions”, that is interactions between different types of work and enabling the workforce to function more effectively and efficiently. 



The first type of work is Transformational, usually work that is involved in the production of goods or in the extraction of raw materials; the second type of work is Transactional, usually work that is clerical or simple-rule based such as a call center operations or someone involved with data entry; finally, the last type of work is Tacit, which primarily deals with knowledge, judgment and collaboration with multiple interactions with multiple stakeholders.  For example, a sales person would engage in tacit work, by interacting with the marketing, product development, H/R, logistics and after sales departments to maximize sales, while engaging and interacting with multiple parties through collaboration. 



There are systems that can maximize the efficiency of both transformational and transactional work such as assembly line work.  However, with tacit work, there is no such a rule or process.  Maximizing the effectiveness of this work is accomplished by focusing them on interactions that create value.  Companies must enable these workers with greater decision making ability, bring down barriers, increase the availability of resources/information and facilitate collaboration.  New and current technology is facilitating this trend and enabling tacit workers to become more effective by having wikis, blogs, emails, text messages, and feeds to make communication and collaboration easier.



The next two trends are categorized under the “Managing Capital and Assets” heading.



The fifth trend is “Expanding the Frontiers of Automation,” companies will continue and expand their automation ability for tasks and processes that are repetitive.  For example, Fed-Ex and UPS have enabled users to track their packages online.  A major benefit would be to lower costs and help users get the information they need effortlessly in a timely manner.



The sixth trend is “Unbundling Production from Delivery,” uses existing business structures of large businesses (e.g. supply chain management, computing power, etc.) and rents this to other businesses.  From a supply side, this technology would attract asset-intensive businesses (e.g. factories, office buildings, etc.) to raise their utilization rates and therefore, their return on invested capital.  From a demand side, this technology would attract businesses that do not possess the economies of scale and scope to achieve competitive marginal costs. 



Unbundling also offers businesses quick and easy access to assets; that minimizes impact on their balance sheets; and makes their income statements more favorable.  For the businesses that offer unbundling, it decreases their marginal operational costs because of greater utilization of resources, and greater economies of scale and scope.  Companies need to manage possible supply and demand conflicts.  Examples have included the mobile phone networks and Amazon.com. 



Here is another example in this article that discusses the growth of APIs across many existing web platforms using existing computing power of large companies. (e.g. eBay, Amazon, etc.)



The last two trends are categorized under the “Leveraging information in new ways” heading. 



The seventh trend is “Putting more science into management,” companies are using statistics and other data to use internally and externally.  For an internal example, automotive companies will typically spend more on sales incentives and on advertising campaigns based on seasonality of sales and possible product lifecycle changes. For an external example, Listen.fm and Amazon.com both use customer segmentation systems that utilize recommendation engines that suggest certain items based on the user’s past history, and on other users’ preferences.



As mentioned in an earlier post, the costs for computing power and storage capacity will continue to fall; and the quality and quantity of information that will become available will rise. The increase in information will empower organizations, as it becomes becomes transparent to employees and suppliers, and the access to it becomes broadened. 



The eighth and final trend is “Making Business from information,” as now increasingly more data is captured by businesses and from varieties of sources; this could be beneficial for an information-based business opportunity.  Intermediary businesses that have access to greater quality and quantity of information can charge a premium for the aggregation and analysis of this data.  An example of this could be a security firm selling its video footage of a retail store to a market research firm studying retail consumer buying behavior. 



These aggregators need to be cautious, because they could be aggregated themselves. Their business model can continue to flourish in business to consumer shopping sites and business to business directories.



Companies need to be cognizant of these eight emerging trends.  Rather than reacting to it, companies can now use these trends to catalyze change and create opportunities as a result of this.


Capitalism in China

What is the future of capitalism in China? Unexpectedly, there is quite bit of decentralization in decision making in China, grassroots democracy is quite apparent, where municipal and provincial decision making powers are quite strong.  This is quite evident with increasing power for individuals to defend their rights (e.g. labor laws, property laws).  In fact, among all OECD countries, China is the most decentralized country.  For most matters that affect infrastructure and investment, the local and  governments have the decision making power.  They even compete with each other to attract Foreign Direct Investment.  At the same time, the central government has metrics to measure the successes of each municipality and province.  The article discusses how if China were to become a capitalist society, its system would mirror closest to South Korea’s system of the chaebol, which are conglomerates that are family controlled.  This is because of its Confucian influence and importance of family in business.  However, It won’t be the same system as South Korea for the following three reasons: 1) China’s size; 2) South Korea is a full democracy; 3) China’s lack of scientific innovation. 

One of the challenges China faces is being able to transform from a society that places great emphasis to personalized trust (a trust between people that know each other) to institutionalized trust (a trust in existing systems that ensures transactions among businesses, NGOs, governments and other parties will function).  In China, much business is done between people that know each other, rather than between strangers.  It does not have an existing system where information and laws are readily available and implemented, and therefore institutional trust is difficult to earn.  Companies that handle complex issues may experience difficulties resulting from a lack of institutional trust because without this, delegation is often difficult.

Another barrier would be China’s lack of scientific innovation resulting from its lack of commercialization of science, and lack of sharing this knowledge across business stakeholders (e.g. venture capitalists, capitalists, scientists, etc.).  In other economies such as Germany’s and Japan’s, there is a high level of societal coordination among various parties (business associations, labor unions, etc.) 

Despite all those barriers, will China’s economy hit a wall?  China’s economy is interdependent on a multitude of nations around the world and vice-versa.  As a low cost manufacturing and assembly center, China has a high dependence on external innovation.  To grow, China needs to be involved with a larger chunk of the value chain by utilizing its comparative advantage in low cost manufacturing and labor in medium to high tech sector. (e.g. building tools for high tech sector)  China could be in danger of being trapped in a low-cost commoditized manufacturer.

However, moving higher up the value chain would require more capital investments and more cooperation amongst firms.  China is addressing these deficiencies is by fostering FDI, as well as involving the ethnic Chinese people in the innovation process.   There is also a movement towards Chinese firms acquiring foreign firms to gain knowledge and innovation.  An example, was Lenovo acquiring IBM.  These trends need to continue in the near future, as well as addressing the deficiencies of innovation, cooperation and trust in order for the Chinese economy to thrive.

What if Apple and Google teamed up?



Wouldn’t be great if you could use any computer anywhere in the world, and still have access to all your files and software applications?  The author, Nicholas Carr, believes that this is inevitable.  A strategic partnership between Apple and Google can make this into a reality.  Both Apple and Google are well-known for user-centric design.  Apple is masterful at front-end applications – graphic user interface and external design.  Google is a perfect partner for the back-end with its vast data centers, contextually-relevant ads and web-based applications. 



Apple could design PCs that merely consists of the CPU, LCD screen and a flash drive.  These PCs would be inexpensive and highly energy efficient because of its simplicity in design.  The hard drive and software applications would be available on the internet with Google providing the space and web applications.





In addition to its simplicity of design, which results in less moving parts, this would make this PC more reliable. It would be immune to viruses because the software and its storage centers are located on data centers on the internet.  Apple would generate revenue from these units through economies of scale.  Google would have contextually-relevant ads embedded with its applications.