Don’t Lament – Celebrate Your Competitor’s Most Recent Innovation

the simpsonsCompanies increasingly concerned about closing the growth gap are keeping an eye on maintaining a fresh and balanced innovation project portfolio. The resulting hunt for novelty eventually finds them lamenting yet another lost opportunity whenever a competitor brings to market their most recent innovation.

But consider this: Your competitor’s new product or service spells far more reason for celebration than for regret.

Novelty tends to open the door to more opportunities than it can claim for itself. This was skillfully observed by Oded Shenkar in his 2010 book Copycats: How Smart Companies Use Imitation to Gain a Strategic Edge. On top of such opportunities, with systematic innovation methods just any novelty—your own or your competitor’s—turns into an ignition spark for new offerings. These can go well beyond copycat approaches.

A panoply of opportunities when looking at the “job level”

Facebook was invented in 2004. This social network is a hugely valuable innovation with a market capitalization of $191 billion in August 2014; it remains the envy of start-ups and established companies alike.

Let us pick a “Job” people try to get done by using Facebook. Already this step typically leads to a panoply of different opportunities. For example, a Rolex watch indicates the time (functional job). It can also be a statement about status (social job) or can make the owner feel proud to pass the watch on to the next generation (personal job).

There are a number of functional jobs that Facebook gets done around the theme to “connect people to other people.” For some, it is emotionally important to “feel up to date on what’s going on in my network” or simply to “show off” (social job).

A detailed study of what people try to get done with Facebook will show these are merely “families” of functional, emotional and social jobs, which can be made far more specific for different circumstances and groups of people. Any of the resulting jobs could be used as starting point for the analysis we present in the following.

Beyond such an analysis of the job structure, one can also develop a job map, as proposed by Lance A. Bettencourt and Anthony W. Ulwick in their 2008 HBR article, “The Customer-Centered Innovation Map.” A job map helps identify the ecosystem of jobs that any given job is embedded in. Before executing what they try to get done, people “define,” “locate,” “prepare” and “confirm.” During the job execution, they also “monitor,” eventually “modify” and finally “conclude” the activities.

Any of these job steps can lead to more opportunities that are under-served with the way Facebook, a Rolex watch, or any product or service helps people get things done. Who helps people “define” when, where or for what they want to get the job done to connect to other people?

What about “extreme users” like under-age children who want to connect to their friends? Where is the app that helps parents get that job done safely for their offspring? Who helps in “locating” the right platform for doing that?

And how can we reduce the hassle to “prepare” for all the networking? You can ask similar questions also for “confirm” all the way through “conclude.” Merely looking at the job map for different user groups allows identifying a lot of “virgin land” that has been created by the innovation that is Facebook.

Other areas of opportunities are revealed when mapping out the consumption chain:” How do people consume the job of connecting to each other? Any given solution for getting that job done needs to be acquired, installed, setup, learned, interfaced with, stored away, maintained, upgraded, replaced and finally disposed of. Would Facebook, a Rolex watch or anything else as “current solutions” for getting a job done leave such opportunities unaddressed?

In systematic creative thinking that is the question you want to ask. The list of ideas that results from such analysis provides yet another litany of jobs people try to get done when using Facebook to “connect to other people.”

By using job structure, a job map and a consumption chain map, we are looking beyond the current product or solution and at the “job” instead. That kind of divergent thinking will create a panoply of possible areas to work on.

When your competitor just invented Facebook, your problem is not that “there’s nothing left to do.” On the contrary, using our approach you are faced with the “luxury-problem” instead to choose among the many opportunities.

In the face of those options, now you need convergent thinking. What we have seen work well is a method developed by T. Ulwick: Ask people how important it is for them to get the job done and how satisfied they are with their current ability to get it done. Let’s pick one example we named before:

  • Q1: “Given you can’t prohibit it anyway, how important is it for you to define who your 13-year-old daughter connects to in social media?”
  • Q2: “How satisfied are you with your current ability to define those connections?”

High importance and low satisfaction in such surveys spell a high opportunity for innovation. This is how you identify jobs worth working on.

Four more innovation strategies to identify new opportunities

Once you have identified a job to focus on, the “Four Growth Quadrants,” which in fact are a modified version of the Igor Ansoff Matrix (Table 1), present another systematic approach to deepen your thinking.

The Four Growth Quadrants prescribe generic innovation strategies around a given job. This approach is also applicable for jobs as specific as “define who to connect to on social media.” The current customer of that job may be you. The new customer may be your 13-year-old daughter or anybody else who is currently excluded from getting this job done effectively.

For the purposes of sharing the method and its potential, however, we use again one of Facebook’s high-level functional jobs, which is “connecting people.”

Starting innovation: Facebook Current customers:

People with Facebook accounts

New customers:

People without Facebook accounts

Current job:

“Connect people”

Quadrant I:

How can Facebook members better connect to others?

Quadrant II:

What are the barriers keeping people away (from Facebook’s way of) connecting people?

New jobs related to “connecting people” Quadrant III:

What are Facebook users doing before, after or during connecting to people?

Quadrant IV:

What are Facebook’s key capabilities? In which other fields could these be utilized?

Table 1: Four Growth Quadrants for the job “connect me to other people” together with the strategic questions asked in each quadrant.

Growth Quadrant I: Help Facebook’s users connect better to people

Innovation opportunities within Quadrant 1 identify ways in which the job of connecting people can be done better. We ask: What matters to the current customers while they get that job done? People might worry about the ease of navigation, the loading time of the pages on their mobile devices after their flat-rate-MBs are used up, their ability to connect with multiple devices, or even their ability to reach out to people who are not online or not on the network.

There are systematic approaches for identifying such needs. When studying what matters to people while they are getting a job done, you may find over 100 potential areas. Once these are listed, surveys looking at satisfaction and importance, as we mentioned before for studies on a job level, help in identifying which of those expectations are associated with high innovation opportunities.

Facebook or anybody else can then come up with innovations that address such unmet needs.

When you collect such importance-satisfaction data, you will come across clusters of people with similar needs. Studying “extreme users” gives further insight. Remember the parent who gave up saying “no” to his 13-year-old using Facebook. Or remember the Gezi-park protests in Istanbul? People wanted to minimize the machine-readability of their postings on social media so that “big brother” could not watch them.

Another typical Quadrant I strategy is to make the context more specific in which the job is executed: What about mountain climbers in Yosemite looking for a partner to climb El Capitan sometime next week? Or dating: Tinder and Zoosk are sites that use Facebook as a backbone and add their own specific services. As you see, Quadrant I strategies can in fact spark new services, products, processes and business models.

Or consider this add-on service to Facebook’s “connecting people.” KLM Airlines discovered they are in the business of seating influential people next to each other. Most often those same people are busy connecting to their peers in the online world, yet they don’t talk to each other during an otherwise possibly boring flight. KLM spotted that as an opportunity they should explore.

Seeing “connecting to other people” not as a “real job” but more as a “prepare step” for something else, KLM figured that passengers actually talking to the influential person next to them could return tangible value out of an otherwise just “virtual” connection.

With their Meet & Seat program, launched in February 2012, KLM helps passengers use their virtual social networks (Facebook, Google+ or LinkedIn) to connect in person. Delta Air Lines seems to have had similar thoughts and launched another such concept in March 2014, called Delta Innovation Class, whereby people can apply through LinkedIn to receive a seat next to an innovator or entrepreneur.

While these programs appear to be seeing lackluster results so far, there is at least the perception of an unaddressed need to match the zillions of online connections with some valuable real-world substance. The two named airlines are experimenting with their concepts to tap into that potential. Maybe someone manages to strike gold here soon, in areas other than dating sites?

Quadrant II: Help those who don’t want to connect the Facebook way

Quadrant II innovations investigate and eliminate reasons for non-consumption. These innovation strategies look at non-consumers or at non-consuming contexts. This quadrant is often explored with “Blue Ocean” (redefine the rules of competition), “disruptive” (question entire industry-orthodoxies), “frugal” (strip the offering of anything super-fluent and relentlessly focus on delivering the core value) or “Jugaad” (identify and mobilize resources to get the job done) innovation strategies.

Key to all those approaches is to identify the myriads of possible barriers to consumption and to help people overcome them. Typical reasons for non-consumption include high cost, lack of time, poor access or lack of skill. By addressing those barriers, an innovator can generate ideas and create new growth opportunities.

Identifying “barriers for non-consumption” and then working on them often is a successful approach: Why might people feel excluded from Facebook’s ways of connecting to people? Obvious reasons include privacy concerns, an overflow of “spam-like” invitations, the effort of maintaining the network and a lack of intimacy in a community that just anyone can join.

Helping people overcome such barriers—or exploiting their very existence—offers many opportunities. For example, how would one exploit the barrier of low privacy and exclusiveness? That appears so strong a barrier that some people have even closed down their online social network accounts in order to focus on “offline” opportunities instead.

Thanks to Facebook the world seems to appreciate better the importance of “connecting to people.” Could this spell a come-back opportunity for churches, sports or business clubs to offer “real” networking opportunities? When do Churches openly advertise they can help you build a network of trustworthy people?

Focusing on “non-customers” of social networks and bringing the “real value” to them might spell a winning formula.

Quadrant III: Help Facebook members leverage their network into new areas

Quadrant III innovations can create substantial value for consumers that were left unaddressed by the original invention. Take Branchout, founded in 2010. By March 2012 it had turned into the largest Facebook application and as of May 2014 counts 800 million subscribers.

This start-up helps young people leverage their Facebook connections into the business world. Branchout asks: What do students do after they have built their often large Facebook network? Answer: They look for a job. And they want to keep in touch – you never know. Thus, Branchout uses Facebook to tap into ”LinkedIn territory:” People extend their Facebook network from school and university into their business lives.

Quite obviously, Branchout not only asks “what else” but also “who else” and helps companies and search firms identify potential job candidates also.

Quadrant IV: Get inspiration from Facebook’s key capabilities

A Quadrant IV innovation strategy asks: What are the key capabilities that made the original invention so successful? Can these capabilities be leveraged elsewhere to help other people get other jobs done also? Facebook being busy with growing Facebook, can someone else use their recipe for success for other purposes?

For example, Facebook’s capabilities include collecting and hosting large amounts of confidential data and converting insights gained from those data into commercial offerings.

Given their ambitions, one might say that Google’s Orkut social network has failed anywhere outside Brazil (and even there people are busy converting to Facebook). With their “Google Glass,” however, widely available since April 2014, Google plans to collect far more confidential data than individuals could ever manually upload to their Facebook profiles. No doubt, Google has world-class capabilities to gain insight from massive amounts of data. Their claim is that Google Glass will be a superior way of connecting people. The product can be linked to the Google+ social network.

We leave it to savvy users to judge how Google+ compares to LinkedIn or Facebook. Google Glass and Google+, hooked up to Google’s entire ecosystem, might indeed turn into something very useful indeed.

Who else hosts massive amounts of data? We can speculate that another Quadrant IV innovation might soon arise in the banking industry. Gaining insight from their wealth of “big data” can make banks far more valuable than shareholders currently appreciate. Since the Financial Crisis, however, the industry appears to be somewhat paralyzed to experiment with anything that sounds like “innovative finance.”

With “digital natives” like PayPal, M-Pesa and Square, and since mid-August 2014 also Amazon Local Register, tapping into financial services and exploring voids left by the banks, the urgency is there, though. Every day that these and other such organizations collect and analyze their customers’ data they can identify new ways to grow their offerings.

A systematic approach to take advantage of anyone’s novelty

What we have gone through here were merely examples. The approach can, and for any real business purpose needs to, be done more thoroughly:

  1. Pick a successful innovation.
  2. Extract jobs it helps people get done.
  3. Identify those jobs that are associated with high innovation opportunity.
  4. “Send” those jobs through the Four Growth Quadrants.
  5. Evaluate the resulting opportunities in the light of your capabilities, aspirations and strategy.

With this simple approach you can exploit your competitors’, or in fact just anyone’s, innovations and devise strategies that go far beyond traditional or copycat approaches for growth.

There is no reason to lament someone else’s innovation. It’s how you deal with it that matters.

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  • Dr. Michael Ohler is BMGI Principal and Manager of European Operations. He is a a scientist and performance professional with business expertise in project management, quality, financial controlling and continuous improvement. Michael is a certified Lean Six Sigma Master Black Belt and Kirton Adaption-Innovation Facilitator, as well as an innovation expert. The author of more than 35 scientific and performance excellence articles, you can follow him @BMGI_Innovation

    Dr. Phil Samuel is the Chief Innovation Officer at BMGI, where he leads numerous performance improvement initiatives using his technical and management experience with engineering, manufacturing and service processes. An expert in strategy, innovation and performance improvement approaches, he helps organizations insource creativity and increase organic growth potential.  His recent books are Design for Lean Six Sigma: A Holistic Approach to Design and Innovation and The Innovator’s Toolkit: 50+ Techniques for Predictable and Sustainable Organic Growth—both focused on the practical methods, tools and steps involved in developing innovation capabilities and putting new ideas into practice. Follow him  @DrPhilSamuel

Michael Ohler and Phil Samuel




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