Aug 18, 2014 | Customers, Innovation, Marketing, Sales
www.strategyaudit.com.au
18 years ago running an ingredient supplier to the food industry as a contractor, I sponsored a project of quantifying a range of ingredient specifications against a matrix of organoleptic, and cost outcomes given a range of processing parameters.
Our objective was to be able to demonstrate on the spot to a customer the impact of apparently minor specification changes of the ingredient and/or processing conditions on the operational, taste and viscosity outcomes, and costs of the product. We did many hundreds of bench trials in the lab, carefully documenting progressive changes of all the parameters, their impact on the product outcomes, and recording them in a database that enabled us to call up the information at any time. This turned an ad hoc, iterative, time consuming, and inexact process requiring expensive lab time that had often taken months to complete, into one that could be done in front of the customer with a few mouse-clicks. Real time outcomes that we were confident could be replicated in a factory trial.
The impact on customers the first time they saw this capability was profound.
I was reminded of this project again recently talking to the manufacturer of extruded plastic components. His sales process involves extensive iteration on a 3-D cad/cam package following usually extensive design and problem definition discussions, and then still pretty expensive models that need to be validated before “cutting steel” for extrusion dies.
It seems to me that in the next very short time, all these processes would be able to be done in real time, in front of the customer with 3-D printed prototypes.
The intersection of sales and technology is ignored by many, for a host of reasons, but pretty clear when you think about it for just a moment. The scary part is that you no longer have to have the resources of a multinational at your fingertips, this stuff is available off the shelf at your local tech vendor, and if you are not doing it, the competitors you may not even know about probably can.
Writing this post, I also realised that we missed a really important parameter in the exercise 18 years ago, one that is the focus of my esteemed “e-mate” Howard Moscowitz‘s work. That missed parameter is what the consumer really thinks, rather than what the marketer with whom we were working thought they were thinking. This discrepancy has been made famous by Malcolm Gladwell’s celebrated TED presentation reflecting on Howards work in the development of Spaghetti sauce.
This is a whole other area where sales, marketing and technology are increasingly intersecting
Aug 3, 2014 | Customers, Innovation
http://steveblank.com/2014/07/30/driving-corporate-innovation-design-thinking-customer-development/
Steve Blank is one of the real thinkers in the innovation space who gets out there into the weeds and gets stuff done.
The illustration at the top of this post is one from a recent post on his blog that makes the very real point that everything should start with the customer, not the product, inventors vision, financial potential, or any of the other usual drivers of activity.
So often we forget this simple truth.
The Lean startup and business model canvas methodology are fantastic ways to articulate your business, but without a customer you do not have one.
Design thinking is all about starting with the customer in mind, using the tools that are there to discover ways to add value to them in some way, and as a result, make a return on the way through.
It matters little if you are a micro business on the corner or a massive multinational, the principals are the same:
Be agile
Focus on the customer
Solve problems
Iterate
Encourage the dissenters
Leverage the wisdom of the crowd
Encourage chaos, and build the processes to distil and manage it
Differentiate
Design thinking is really hard, challenging work, but nowhere near as hard as design doing.
Jul 7, 2014 | Change, Innovation, Marketing, Small business
www.thefarmery.com
How we deliver good quality food and water to an urbanised and growing population around the world is the challenge of the 21st century.
We have gone from a largely subsistence existence to a highly urbanised one in 200 years, a “blink” in the context of human evolution, and some would argue that in the process we have lost some of the “connection” to the food we eat, to our collective detriment.
The last few years have seen the beginnings of a movement back to food basics, and a greater interest in the sourcing, preparation and presentation of food. The “Masterchef effect” if you like.
Some consumers are starting to look for the source and provenance of the food they eat, as a way to ensure they are getting both quality and value. It is far from mass market, but not so far from the mainstream.
However, all change starts at the fringes, as a challenge to orthodoxy, and can rapidly become mainstream as the merits of the argument become known. Technology is changing our lives on a daily basis, but to date the manner in which we grow and distribute our fresh produce has been relatively untouched, but the change is now coming at us at warp speed with urban hydroponics and retail being combined in fascinating ways, like The Farmery, and almost all driven by innovative SME’s
Jun 3, 2014 | Change, Governance, Innovation
Solar tower. http://en.wikipedia.org/wiki/List_of_solar_thermal_power_stations
It seems to me that the most important emerging driver of success in the economy that must drive innovation and value delivery, is the intersection of technical capability and power generation.
Oil has driven the geo politics of the C 19 & C20. The US became a manufacturing giant by finding oil, and was a net exporter until the 70’s, then became an importer. Now thanks to the technology commonly called “Fracking” enabling (for better or worse) the extraction of gas reserves the US is again an exporter, and cheaper energy is in the early stages of revitalising US manufacturing.
Early C20 imperialism was driven by energy, the French and British in The Middle East, British and Dutch in SE Asia, The Japanese bombed Pearl Harbour because of the oil embargo, Hitler went after the Caucuses for the oil, it is a long story.
Now we have another revolution on our hands.
We are no longer looking to conserve energy, which has been the mantra since the 70’s oil shock, now we are seeking to harness it from other sources.
The tops of our buildings with rooftop PV, which has dropped 80% in cost over a real short time, wind, tide. Solar however is the most obvious, and potentially sensational advances are being made that will transform economies.
In this state (NSW, Australia) we are arguing about the sale of the “poles and wires” of the power distribution companies to fund public works, schools, and so on. Vital projects, but at the same time we are cutting the R&D that will deliver us the world of tomorrow.
Any idiot who has thought about this stuff (even I could figure it out in a number of posts over the years) would come to the conclusion that just like computing, power generation will become distributed, so, rather than argue about the disposition of yesterdays assets, we should be considering how we build a leverage those of today, let alone tomorrow. Moore’s Law in reverse, combined with the explosion of adjacent technologies.
Companies like IBM with their Deep Thunder and Smarter cities initiatives are driving the research agenda, Germany outdoes the US in spreading the impact of innovation from the lab to the manufacturing operations, and in Australia with the abundant easily accessible sunlight in a politically stable country we are ignoring all this in favour of short term political tit-bits, trivia, and populist bullshit, mixed in with the occasional poorly sold but sensible objective.
Will we ever wake up????
May 1, 2014 | Change, Innovation, Strategy
There is plenty in the press about the role agriculture will play in the post mining boom era. “Asia’s foodbowl” and other such optimistic clichés get front page coverage.
I have been sitting in Armidale (NSW) for a few days, I have a bit of long term business up here, and I like the people, so come up fairly regularly, but the sense of optimism I normally find despite the difficulties is being squeezed by the realities:
- Communication. Armidale benefited from the presence of independent member Tony Windsor holding the balance of power in the last Parliament, it became one of the poster children of the NBN. It will eventually be a huge boon, but the implementation has a “pink batts” aura about it. A client lives 13 kilometres out of town, running a small property as an adjunct to other activities. She is unable to download a video from youtube, the NBN does not come out to her, she is on the end of the copper “pipe” and this will not change for many years. 13k, this is not the middle of the Simpson desert, it is almost an urban outskirt of a major regional centre. By contrast, a building in the CBD with a number of SME tenants of various types has been wired for the NBN, and the copper is about to he turned off. Problem is there is something wrong in the wiring, and the new stuff does not work for parts of the building, and fixing it seems to be a bit hard. Somebody wake me!
- Transport. We have vast distances in this country. To compete internationally and service those hungry mouths in Asia, we need to be able to cover the distances efficiently, and get our stuff onto boats and planes reliably, quickly and cost effectively. Road transport is dying, literally. The average age of truckies increasing, as young blokes find more financially rewarding and less physically challenging ways of earning a living. Those retiring are not being replaced even as the demand for freight providers increases. Rail is a joke. What is left of the regional rail network is unreliable, and deteriorating.
- Climate change. Nobody in Canberra, or any other cosy clime can do anything about the weather, but for heavens sake why can’t we recognise that there is change happening that will impact on our lifestyles and livelihoods over the next 200 years and recognise that politics and ideology have nothing to do with dealing with the problems in a logical and economically sustainable manner. The people in rural communities like Armidale are like the canaries in the mine, they see and feel the subtle changes as they occur way before the boffins in laboratories and caucus rooms are even aware of them. Listen.
- Immigration and human capital. This is a university town, as well as a centre of rural innovation. The diversity emerging is evident as you walk around the town, and particularly around the university. However, lets be fair dunkum about the capabilities we need for the long term and be sensible about scoring these items as components of the immigration intake. This bit is personal. My brother in law lives in Armidale, obviously with my sister. He is a globally experienced IT guru, and Pommie. His skills are in great demand, but we do not let him work, while we go through an extensive, detailed bureaucratic process projected to take another 6 months on top of the year to date, assuming all the crap necessitated by the form fillers turns up without delay from all the places in the world he has worked at advanced, leading edge IT applications. He is sitting on his hands as my sister tries to make ends meet, because they decided to settle here after 25 years of globetrotting. How many degree qualified hairdressers and chefs do we need on 457 visas? Armidale is a town that desperately needs his skills if the NBN (assuming it is rolled out successfully) is to deliver he economic benefits projected.
If we are to have the post mining agricultural boom, we need to work for it, not just hope if arrives by some osmotic process.
Apr 28, 2014 | Change, Innovation, Social Media
A/B testing
As a marketer, I am fairly left brain oriented, some may say flakey and opinionated, and I have done well with that for many years.
Here is the paradox.
You can now test just about everything if you try hard enough. All sorts of ads, headlines, copy size, placement, colour, the best mix of paid and organic media, channel A Vs channel B, and so on. There is no longer any excuse not to test, to quantitatively know what works best, to be able to calculate with a pretty good level of confidence the outcomes of some marketing activity.
There are also some great resources to help think about the topic, Avinash Kaushiks blog being gold, as well as books like “A/B testing: The most powerful way to turn clicks into customers”.
There is a trap here however.
Reliance on data to inform decision making can become a crutch that stifles the left brain driven capacity to connect logically unconnected dots in some new way.
Years ago I was faced with a dilemma.
I just “knew” that rectangular 1kg yoghurt tubs would be better than the existing round ones, better for the retailers, better for consumers, just lousy for us as the producer, as margins were at risk from the higher costs, or volumes at risk from higher prices had we chosen to recover all the incremental costs.
Problem was that the round ones were industry standard, and were so for a reason, they were substantially cheaper, easier to print, and all the filling and collation equipment was designed for round tubs. I had to wait 6 years to do an A/B test by subverting a capex process of an equipment upgrade in a factory by substituting rectangular tubs for round. Not a simple proposition when you consider all the supply and distribution angles that had to be covered.
Outcome: rectangular was vastly preferred by consumers (I somehow “knew” that) and retailers as they achieved better shelf utilisation, which we were able to calculate and demonstrate to them. It turned out the cost premium was easily recovered in the incremental sales, and the dynamics of the market were changed in a fundamental way.
I could have, probably should have, lost my job for that piece of subversion, and had it tanked, I am sure I would have, but it would not have gone ahead with full disclosure in the capex process.
Some things are still really hard to digitally A/B test, you still need the market instinct and market risk taking mentality to have a go, but the personal cost has the potential to blow out in the wrong environment, but without the risk, there is no progress
