The Age of the Consumer-Innovator

The Age of the Consumer-Innovator

Today we are seeing more and more individuals innovating either through modification of existing products or out of necessity.  With the use of the internet and the right tools this is becoming increasingly easily.  Even I’ve made simple things in my home.  One time I made a two wheeled cart to carry around a wide, flat bottomed canoe I had.  Yes, I could have purchased something like this, but I never did find exactly what I needed for the price I wanted to pay.

Now the best consumer-innovator I knew was my grandfather.  You can go back to one of my earlier blog posts to read about his reversed John Deere tractor with the scoop over the large back wheels.  He was in Phase 1 of the consumer innovator paradigm.  His need was for himself on the family farm to make chores easier.

Even in the cooperate world those of us that are following the Toyota Production System(Lean Manufacturing) are doing small scale innovation for our own company’s and our production team member’s own use.  We use highly creative team members called moonshiners to make special tooling, part racking and ergonomic work stations. Our moonshiners have modified hand tools(don’t tell SnapOn), made returnable storage racks for specific parts, designed specific work stations for improved ergonomics and even specific pieces of capital equipment for our own internal use.

The advantage we have with our moonshiners is that we can internally exercise “dimension of merit” and modify existing products to fit our internal needs.  It also allows us to innovate within phase 1 of the consumer innovation process and make new products for ourselves.  None of these projects would have any market beyond our company in most cases.  But we do share our innovations with other businesses in the corporation.

A few years ago I helped a local entrepreneur who was entering phase 3.  He had found an individual who had developed and patented a mechanism that would allow a farmer to pull up to a piece of equipment with a tractor and hook up the PTO (power take off) shaft without leaving the cab of the tractor.  The inventor did not have the means to manufacture and market his product, but the entrepreneur did.

Leadership Style

This week’s blog topic is my leadership style which I find very difficult to write about.  To me, leadership is such a broad topic that it’s hard to cover simply in a few sentences.  Let’s be honest, entire books have been written on the subject of leadership in thousands of different situations.  Where do you start?

I’m fortunate to have a unique advantage over my peers in that I am a former Army officer.  I have found this training and experience to give me a distinct advantage in many different situations, especially in complex, difficult and fast moving scenarios.  I have found that the people and organizational skills taught to us can be directly transferred to almost any situation in the business world.  I would in fact rate the Army’s leadership better than some of the world class companies that I have worked for.

But my background has also been caused me to be stereotyped.  For the record, I’m not a raving, foul-mouth lunatic or a blood thirsty killer.  I’m not a mindless robot that only follows orders.  I remember one interview where my potential future boss made the snide comment about how difficult can it be in the military when all you have to do is follow checklists.  I almost walked out of the interview.  Why would I want to work for someone who has no understanding or appreciation for what I’ve accomplished or what level of talent they may be receiving with my employment?

The best piece of leadership advice that I have received was that leadership is like a deck of cards.  You have to learn what cards to play and discard at the right time.  Also you can watch several games you get the idea of how to play, but until you are in the game you are not getting the full effect of the magnitude of the decisions/risks at hand.

In many ways this leads us to the four leadership styles listed in Figure 12.2 on page 288 of our text.  I personally flow mostly between the coaching, supporting and delegating styles, but I can easily fall into the directing style depending on the situation.  I have had several standardized test confirm this. 

The people that work or have worked for me comment that I let them do their job, that I give them what they need, that I put them in position to be successful.  To a large degree this to me is servant leadership, a topic that I am passionate about.  This is the skill I’d bring to my new business endeavor.

What I don’t think leadership is may be very different than what you will commonly see or expect, but this also fundamentally shapes my style.  I do not feel that energy and passion is equal to leadership.  It is part of leadership, but only a small part.  Without people skills, tenacity, technical competence or the ability to influence others a leader can have all the energy in the world, but never get a group focused on achieving the end goals.

Leadership is also not being part of a country club (a favorite term used by one of my past GM’s).  I don’t think leadership is being cool, having drinks after work to the point of inebriation, going fishing with your buddy or doing a round of golf on the weekends.  It’s very important that leaders separate work and play as this can lead to the perception of favoritism and erode the team work of the organization or worse it let’s their personal feelings interfere with what is ultimately a business decision.

Chris

Product Innovation Research Results

This week’s assignment was to blog on the recent article in Business Wire about innovation challenges in the consumer goods markets.  The article can be found at: https://exchange.wpi.edu/owa/redir.aspx?C=fcbe91f5dab140c38d81c45377af0ff5&URL=http%3a%2f%2fwww.businesswire.com%2fnews%2fhome%2f20111011005513%2fen%2fResearch-Study-Uncovers-Product-Innovation-Challenges-Facing%2520.

The article mentions two things that to me are interrelated.  The first is the fact that only 20 percent of the ideas generated resulted in highly innovative products.  The second is that 60 percent of the respondents indicated that development resources were stretched too thin.  It seems that consumer goods manufacturers are not properly funding their new product development teams.  I know that some companies put great pressure on getting a project done on time and this leads the project teams to ‘dumb down’ the overall scope into a small fraction of the original intent.  These teams are under funded and under staffed.  This lack of resources leads to launches that are late and underwhelming.

What I find in most new product launches is that the managers lack the intuitiveness to really see through what needs to happen.  Commitments are then made that are unrealistic.  The launch team will start getting behind or going over budget.  Next features of the design are dropped and process steps are ‘forgotten’.  Ultimately the launch falls prey to the capability trap.

Chris

Inbound vs. Outbound Marketing

Inbound vs. Outbound Marketing

With the power of the internet, inbound marketing has been greatly enhanced.  Just do a search and you have several options at your finger tips.  The trick is to ensure that the right internet searches get customers to your website and looking at your products, not your competitors. 

Can a company today survive only on inbound marketing?  No, but if you are selling to a high tech using customer base it certainly helps your sales.  They have better access/knowledge on how to search for what they are looking for.  If your market is, for example, in home products for the elderly your web site may not get a lot of hits from this demographic.

What has happened over the last decade is that outbound marketing has started to include web sites along with the traditional marketing information.  Not only are you getting your product in front of potential customers, but the outbound marketing material is essentially ‘assisting’ customers in their inbound marketing searches.

Chris

Apple iPod Business Model Canvas

This week’s assignment was to do a business model canvas on the Apple iPod.  Of course with my advanced age (or just not being cool) I had to ask my son exactly what an iPod did.  Obviously, I’m not listed in the customer segment of the business model canvas.

Of course, my son knew everything about the iPod and with his help we quickly filled in the business model canvas below.  He knew everything you could do with it, where to get music downloads, what they should cost and how to interface with our PC.  Most importantly he very much recognized the Apple brand name (kudos to Apple marketing).  He new what he was using was (at the time) the latest technology and good quality.

My concern with the current state of the business model canvas is that competition in this area is high and with iPod getting most of their revenues from unit sales the tend line is on the downward slope.  I’m sure that both Apple and several competitors are filling this void in the portable music market with newer products.  What we are seeing today is that the iPod is in the end of the maturity stage of its product life cycle.

Chris

“Strategy and the Internet” by Michael Porter

I think the first thing to keep in mind when reading the article is that Mr. Porter wrote the article in March of 2001 around the time of the Dot.com crash.  He also writes it in response to criticism that his Five Forces analysis is obsolete with the advance of the internet.  Today, 2011, we do not really see why critics even tried to dispute Porter’s Five Forces model.  This is because the market has equalized after the growth and bursting of the Dot.com bubble. 

At the height of the Dot.com era we saw a lot of companies do anything to say that they have a presence on the internet.  Web sites were giving away product to get their foot in the consumer’s door.  Executives were reporting significant revenue growth, but in some cases negative impacts to the bottom line. 

What I like about Porter’s article is that he proves that his original model still works.  On page 5 of the article it shows how the original Five Forces are affected by the internet.  The forces that stand out to me are the lowering of the barriers to entry, the shifting of bargaining power to the customer and the increased threat of substitutions because of the expansion of the market by the internet.

Clearly the advent of the internet has empowered the consumer.  They can instantly check prices, look at reviews of the product by other consumers, search other brands and even look online for other items that could be substitutions.  All without leaving the comfort of their home.  It allows them to efficiently shop saving gas money and time without having to drive all over town comparing prices.

ETR 500 Blog for 9/19/11

As I am going through ETR500 I realize some of the creative things in the past that I’ve seen and never really considered it a business idea.  Most were inventions born out of creativity and necessity.

The main idea that comes to mind was my grandfather’s reverse loader tractor design from the family farm.  What he did was take an old John Deere tractor and reversed the entire engine and transmission on the frame.  The thing to keep in mind was that back then(1970’s) you could still get tractors that were two wheel drive with much smaller front wheels that would steer the tractor only.  The problem with small front wheels is that with a front scoop loader there was a lot of weight on them which was not good for the tractor and made loading chores take longer than you wanted.  Also, the turn radius was never good for tight places like the insides of barns or feed lots.

What my grandfather was able to do was to reverse the engine and transmission on the tractor frame making the back(where the larger drive wheels are) the front.  This allowed more weight in the bucket which was now over the larger axle of the tractor.  Now with the smaller steering axle the back of the tractor he was able to have a tractor with a much smaller turning radius for the tough to get to places on the farm.  He was able to shorten his daily chores by 2 hours a day.

In the end, my grandfather made about 4 of these loaders for the local farmers.  Basically it was the front runner to the skid steer loader you see made by companies like Bobcat today.  He never did patient the idea.  I never remember him wanting to.  He was really just looking for a way to solve a problem on the farm and make his day easier.