Agile Serious Games

I went the other day to an Agile Serious Games session organized by Wemanity, and we did nice exercises to illustrate the values and advantages of Agile Management. If you’re not familiar with the expression ‘serious games’, it’s used when playing a game that has a professional purpose, that makes the participants experience a problem and sometimes also a solution.
I would like to share with you the ‘ping-pong race’ serious game:

  • Create teams of at least 5 people. It works very well with more people, try to keep it in teams of around 10 people, though it doesn’t matter if you only have one team. You’ll need at least 30 ping-pong balls and a basket per each team.
  • Tell people to group making a circle.  One person of the team will take the ping-pong balls from their container and this same person will be in charge of putting the ball that has already been passed to everybody in the basket provided. He’s the only one who will touch two times the ball. Each ball has to be passed to every team member, following these simple rules:
    1. The ball cannot be passed to a neighbor (the person immediately next to your right or to your left).
    2. The ball has to be in the air for a short time when passing it, you cannot put it directly in the hands of the person.
    3. All persons on the team have to receive the ball at one time, except for the first person that touches it twice.
    4. Balls that fall on the floor don’t count. Leave them there until timeout.
    5. The objective is to have as many balls in the basket as possible.
  • Time the game: give them 5 minutes to discuss how to organize themselves, then one minute to play the game (or more if the group is big).

First time this game is run, they end-up with a small number of balls that completed the assignment. But now comes the key element of this game: ask them if they think they could do better a second time. Let each team discuss between them for 2 to 5 minutes and then run the game again for a minute.

Usually the second time all teams do better.  Allowing them again some time to reorganize and running it a third time provides still better results.

The key part of the game is not the game itself, it doesn’t really matter who won the race, nor how many balls were in the basket. The key part is to realize that taking some time-off to think about how you are doing your work in order to improve it is worth the time lost on those meetings. Teams understand the point of the game and that they see that they can improve by self-organization. It makes them interact, communicate and take action instead of waiting for instructions to improve their work. In the Agile-SCRUM methodology this is covered by the Sprint retrospectives.

Image from www.agilest.org

This game is always fun to play, the whole cycle lasts around half hour, and it really shows people the benefits of having time to reflect on how you’re doing your job. And as you are doing it at work, it shows that the management encourages people to take initiatives 😉

In any case, it creates a nice feeling of team-building! It’s definitely worth the try.

Be Sociable, Share!

Are you getting your message across?

Jean-Luc Doumont came last month to the KUL University and delivered a very insightful lecture to rational students and researchers on how to deliver effectively the message on their papers. Effective communication is always difficult, so imagine  when discussing complex subjects, specially if the person delivering the message has been isolated and immersed in that particular domain for some time while doing the research!

I found very valuable his insights and they apply to many business situations. So here is a small recap of these tips, but don’t hesitate to visit Jean-Luc’s website for more insights.

  • When showing figures, don’t forget the labels of the axes 😉 and much more important, use the Title zone.

 

 

 

 

 

 

  • As shown in previous example, a good title is the one that shows the message you want to pass along.

A message is an interpretation – is what the information means:

  • Choose carefully how to express your message, it’s important to select the right subject:

A message is a statement – a full declarative sentence. The subject should be about what I’m talking, the verb what I’m saying about the subject:

  • For a log document, beware of this mismatch:

    I encourage you to go to his presentations for more detail on what to cover in the different parts to get your reader hooked 😉
Be Sociable, Share!

4 Behaviors to find new business ideas

I went to an open event at Vlerick, and Prof. Miguel Meuleman gave us a talk on the Entrepreneurial Mindset. He gave us good tips to find business ideas. Based on the six-year study behind the book The innovator’s DNA, he mentioned these 4 discovery activities that the authors have identified as the ones in which innovative entrepreneurs spend more time:

  1. Questioning
  2. Observing
  3. Experimenting
  4. Networking

 

 

The good news is that anybody can nurture these behaviors.

  • Questionning:

Miguel used a restaurant to illustrate how to question the status-quo: What do you need to have a restaurant? We quickly came up with a list:

  •  capital,
  • a venue,
  • marketing,
  • food,
  • a cook,

Now, question each of the assumptions: how could you have a restaurant without capital? how without a venue? without marketing?… He even gave us an example of a restaurant without food! (If you wonder, it was in a seafood market, where you could buy your own fish and bring it to the restaurant that cooked it for you 🙂

If you analyse your answers, you may see that to overcome one of the traditional assumptions (like needing capital to launch a restaurant) you are using a new trend (like crowdfunding). Our assumptions come from years of doing something in the same way, but then thanks to a technological advance, a new tool, a new trend, those assumptions are not true anymore.

When discovering a new trend we have to reflect on what it means to our business, is it challenging one of the basic assumptions we worked with before? What are the problems that can be solved with this trend? Is it creating new expectations from our customers? (As example of this, KBC is now offering a contact channel through Whatsapp)

  • Observing

Miguel suggests us to look at dating sites like Tinder 🙂 Successful dating sites are designed to attract people, they are  rich in new ideas of presentation.  The idea behind is to look at new startups websites to find good design ideas. When something is easy to use, it usually catches up quickly and soon your customers will want it in your site too.
Observe your customer, think of your customer’ journey.  As an example, Nordstrom innovation lab designed an ipad app to help customers choose their lenses in a very Agile way: they installed the whole team (developers, designers,.. even the SCRUM board!) directly in one shop, and they follow the customer to see how they walked around, what they were looking at, how they finally chose their lenses.  They came with a working prototype within a day, and asked real customers to try it, so they could see immediately the functionalities that were missing, or the ones that were not user friendly.

  • Experimenting

Experimenting is not just trial and error. It has to be designed. Facebook is not the same to everyone, there are many versions of the application running simultaneously, they can quickly see which features work better. To look for ideas, Miguel suggests us to look at the Airbnb site: they share all the experiments that they do with their users.

  • Networking

The idea is to talk to people about the new ideas, to discuss the problems to be solved, to come up with different options of your initial product. See people’s reaction, incorporate their insight to your initial idea.

At the actual pace of change in our society, we should do this regularly, to systematize the process of innovation and don’t become a dinosaur (professionally speaking).

Be Sociable, Share!

A Good Management strategy is worth!

I am on the Advisory Council of the Harvard Business Review.  Last week I took part in the selection process to choose one article to be the winner of HBR’s most prominent prize, the McKinsey Award.

The 3 pre-selected articles were very interesting, bringing advice to companies on what their C-Suite executives must focus (one was on strategy, one on globalization and the other on the importance of management practices).  

This last one on management was ‘Why do we undervalue competent management?’ by Raffaella Sadun, Nicholas Bloom and John Van Reenen. They argued that good management practices are not valued enough, they are not considered as a possible competitive advantage because they are supposedly easy to copy, they are usually wrongly relayed after a good business strategy/[other business strategies].

They did an impressive research called ‘World management Survey’ across 34 countries interviewing more than 14.000 companies, and their results show without surprise that good management practices correlate to strong performance.  Although this was never argued, they differ from established knowledge in that it is not so easy to copy that.  Achieving operational excellence depends on people: even knowing what to do, changing mentalities and changing a company’s culture is not immediately done. Moreover, there is a positive spiral effect, because employees working in those good managed firms are motivated, and having a good reputation, those companies also attract more talented employees.

Knowing this, why is that all companies don’t go for it?  They mention different issues at play, but one that I find important to emphasize is the bias on our own evaluation:

False perceptions. our research indicates that a surprisingly large number of managers are unable to objectively judge how badly (or well) their firms are run. (Similar biases show up in other settings. for Example, 70% of students, 80% of drivers, and 90% of university teachers rate themselves as ‘above average’.)

In conclusion, improving your management practices is a good strategic movement.  I encourage you to read the full article, and let’s hope your Board and C-executives will read it too 😉

Be Sociable, Share!

Will 2018 be the year of the “Digital Startup”?

Hi,

As with any end of the year,  it’s time to reflect on the achievements of the year and look forward to the fresh new year. The holiday season is also a time to reconnect with family, friends and why not with our business.

As part of that exercise, one of the project we launched, the “Digital Startup Toolkit“,  a virtual program for entrepreneurs, to help them understand and take advantage from the possibilities of the internet for growing their business,  has not delivered yet to its full potential.

But our faith on this product is still very strong, and we think that this new year will be the proper timing to redouble our efforts on making this product your success story. We derive a great please on delivering it, moreover knowing that we are giving you the tools that will allow you to improve your business.  You know the saying:

Give a Man a Fish, and You Feed Him for a Day. Teach a Man To Fish, and You Feed Him for a Lifetime

Well, our product follows those lines… in a modest way, as I’m sorry to say that our teaching won’t last a lifetime. Technological changes don’t stop, we cannot stop learning!

So what will change for this to happen? What’s sure is that we will refocus on this program to make it better. We strongly believe that we can boost your business, our own global economy and all of us thrive in 2018. See for yourself here how you can benefit from this program.

And you, what are your good resolutions for this year? In any case, I wish you a lovely and exciting 2018 in both, professional and personal sphere.

 

Be Sociable, Share!

Useful tips on video communication

Last week we had a lovely time at Le Chatelain Hotel for the Christmas drink organized by the Professional Women International association.  They had invited Viviana Siclari and Bruno Souverbie, who gave us nice tips to do videos.

Very interesting subject, as short videos are being used to do marketing clips to promote a new product, to present your company on internet but also to get a job: some companies ask you to send a small video to do a pre-selection before giving you a real job interview. And some real interviews are done on line, so these tips apply too!

At Waterloo Hills, we do short videos with information on ‘how-to’ going digital: you can subscribe to receive videos, each on a particular subject like how to create you e-shop, or how to take advantage of the data in Internet for improving your business.

And if not for videos, these tips also apply to your video conferences, which are becoming of greater relevance with the globalization of the work-force and also the wide spreading of teleworking.

I collected some of the tips for you, dear reader 🙂

  • Don’t put the camera at a different height of the main character: filming top down to you will minimize you, filming bottom up is not nice either.
  • Don’t change too much the camera angles, it’s disturbing.
  • Look directly to the camera when being informative, assertive, when you are directing a message to the viewer. When looking next to the camera, the effect is like in a movie.
  • Be aware of the decoration: each object in front of the camera has to be considered necessary or at least not disturbing; else it’s distracting the attention. As a bad example, look at this interview with a frame with a clown in the background!
  • Don’t wear stripes or peas. Don’t use a shining material, be also attentive to use a material that does not do noises when you move around (your arms for instance).
  • Use pastel color, so the focus is in your face and not the wall or your clothes. Red is not a good color, it makes people look unhealthy. Light blue and green are more likely to favor you.

 

I hope this advice will help you create wonderful videos, where the message passes along.  Show me yours! I’ll be happy to see the result, I surely be reviewing my professional videos.

Be Sociable, Share!

Asimov’s robotic laws revisited

Artificial intelligence programs that predict, suggest and act extrapolating from our requests are already being used in everyday tools, and this technology cannot be stopped. I just changed my car and it’s incredible how many options are based in AI, providing a lot of functionalities to assist me -the driver- making it almost unthinkable that I could do without them.

At the same time we start hearing famous voices  such as the ones of Elon Musk, Steven Hawkings  and Bill Gates  warning us that “AI could spell the end of the human race“.

Their concerns of the potential issues that the rise of AI presents are real, and they will need to be addressed. This is why I liked this video from Stuart Russel, where he proposes 3 principles for creating a safer AI.

 

 

The King Midas Problem

Midas request was to be able to transform everything he touched into gold. His wish was granted but then he died because EVERYTHING he touched was transformed in gold, even his food. 

Current AIs are facing that same dilemma, they require from us (programmers) to be very specific and careful with the objectives we put into them. As Stuart Russel says: “better be quite sure that the purpose put on the robots is what we want”.

He proposes to implement these following principles to make sure AI’s programs will be helpful to humans:

The laws for ‘Human compatible AI’

1. AI Goal Is To Maximize The Realization of Human Values

Robots should not have an objective per se,  with the exception of maximizing the realization of human values. If you are fan of Science Fiction literature, you’ll remember Asimov’s robotic laws. This law will directly overrule the Asimov’s self-preservation one, making the AI truly altruistic.

2. The Law of Humility

Our human values are not clearly stated and those values differ in some way from one human to another so they will never be completely defined.  The AIs will need some humility to understand that they may not fully know what are the values they are trying to maximise. This will force them to observe all human behaviour and adapt the values to those observations. That will also make them accept our feedback if they are not satisfying our wishes (because we expressed them badly).

This law  is important because it avoids the problem of the mindless poursuit by eliminating the certainty of a single known objective to be maximised.

3. Human Behavior, The Information Source of Human Values

The idea is that they will draw our human goals from their “general knowledge “ to fill in a particular request. For that, AI’s have to have access to the full story of humans…but we have electronic files of almost any written book and research, and a quite important quantity of our daily activities leave electronic traces nowadays.

Robots should try to understand the motivations behind our behavior, instead of copying our strict behaviour.

They have to know our limitations like the limited computation of the GO game expert (he didn’t want to loose, he just couldn’t foresee the result of his move). 

And they should be designed to satisfy humanity desires, not responding to the wishes of one specific human being.

Russel argues that there is a huge economic incentive to get it right, because one bad example will make people untrust AI’s (as in his example of an AI home assistant that made the kitty for dinner because there was no other food in the house, not realising the affective value of the kitty)

But There Is Still Room For Improvement

 

I love this revisited Asimov’s robotic laws, but obviously AI programs could be designed in other ways, unwillingly or willingly, so let’s remain vigilant.

 

 

Be Sociable, Share!

How our economy is shifting towards network-centric players

Managing our hub economy, HBR

I loved this article from the Harvard Business Review: Managing Our Hub Economy,by Marco Iansiti and Karim R. Lakhani, the authors explain in a very clear way what we are already experiencing in the last decade already at the macro-level economy.

The global economy is coalescing around a few digital superpowers. We see unmistakable evidence that a winner-take-all world is emerging in which a small number of “hub firms”—including Alibaba, Alphabet/Google, Amazon, Apple, Baidu, Facebook, Microsoft, and Tencent—occupy central positions. While creating real value for users, these companies are also capturing a disproportionate and expanding share of the value, and that’s shaping our collective economic future. The very same technologies that promised to democratize business are now threatening to make it more monopolistic.

Beyond dominating individual markets, hub firms create and control essential connections in the networks that pervade our economy. Google’s Android and related technologies form “competitive bottlenecks”; that is, they own access to billions of mobile consumers that other product and service providers want to reach. Google can not only exact a toll on transactions but also influence the flow of information and the data collected.

These big ‘Hub’ companies, as these authors call them, are companies that you cannot ignore when you want to do business in many markets today.  The interesting point of this article is that those same companies have a great competitive advantage over traditional companies in a lot of other markets. And each time they dominate in a different market, their competitive advantage grows to capture yet more easily the future next market they’ll wish to enter.

This is flipping, because one of the great advantages we all see on being connected through Internet and being heard by (almost) everybody is the democratisation of power, the opening of opportunities for everybody… and what is really happening is that the same companies that are offering the inter-connections are growing so much that they are not avoidable, so they monopolise the communications channels.

Hub firms don’t compete in a traditional fashion—vying with existing products or services, perhaps with improved features or lower cost. Rather, they take the network-based assets that have already reached scale in one setting and then use them to enter another industry and “re-architect” its competitive structure—transforming it from product-driven to network-driven. They plug adjacent industries into the same competitive bottlenecks they already control.

For example […] Google’s automotive strategy does not simply entail creating an improved car; it leverages technologies and data advantages (many already at scale from billions of mobile consumers and millions of advertisers) to change the structure of the auto industry itself.[…]

If current trends continue, the hub economy will spread across more industries, further concentrating data, value, and power in the hands of a small number of firms employing a tiny fraction of the workforce.[…]

To remain competitive, companies will need to use their assets and capabilities differently, transform their core businesses, develop new revenue opportunities, and identify areas that can be defended from encroaching hub firms and others rushing in from previously disconnected economic sectors. Some companies have started on this path—Comcast, with its new Xfinity platform, is a notable example—but the majority, especially those in traditional sectors, still need to master the implications of network competition.

In this article, the authors encourage the ‘hub’ companies to realize the impact they have on society, the resentment that could rise if their power is not wisely used.

Most importantly, the very same hub firms that are transforming our economy must be part of the solution—and their leaders must step up. As Mark Zuckerberg articulated in his Harvard commencement address in May 2017, “we have a level of wealth inequality that hurts everyone.” Business as usual is not a good option. Witness the public concern about the roles that Facebook and Twitter played in the recent U.S. presidential election, Google’s challenges with global regulatory bodies, criticism of Uber’s culture and operating policies, and complaints that Airbnb’s rental practices are racially discriminatory and harmful to municipal housing stocks, rents, and pricing.

Thoughtful hub strategies will create effective ways to share economic value, manage collective risks, and sustain the networks and communities we all ultimately depend on. If carmakers, major retailers, or media companies continue to go out of business, massive economic and social dislocation will ensue. And with governments and public opinion increasingly attuned to this problem, hub strategies that foster a more stable economy and united society will drive differentiation among the hub firms themselves.[…]

A real opportunity exists for hub firms to truly lead our economy. This will require hubs to fully consider the long-term societal impact of their decisions and to prioritize their ethical responsibilities to the large economic ecosystems that increasingly revolve around them. At the same time, the rest of us—whether in established enterprises or start-ups, in institutions or communities—will need to serve as checks and balances, helping to shape the hub economy by providing critical, informed input and, as needed, pushback.

They explain that with the growing connectivity, we share information at near-zero marginal cost. Thus networks are creating value:

Metcalfe’s law states that a network’s value increases with the number of nodes (connection points) or users—the dynamic we think of as network effects. This means that digital technology is enabling significant growth in value across our economy, particularly as open-network connections allow for the recombination of business offerings[…]

But that value is not much distributed among players to begin with, moreover the bigger the network, the stronger effect of attraction that it will exert, thus exacerbating the differences:

But while value is being created for everyone, value capture is getting more skewed and concentrated. This is because in networks, traffic begets more traffic, and as certain nodes become more heavily used, they attract additional attachments, which further increases their importance. This brings us to the third principle, a lesser-known dynamic originally posited by the physicist Albert-László Barabási: the notion that digital-network formation naturally leads to the emergence of positive feedback loops that create increasingly important, highly connected hubs. As digital networks carry more and more economic transactions, the economic power of network hubs, which connect consumers, firms, and even industries to one another, expands. Once a hub is highly connected (and enjoying increasing returns to scale) in one sector of the economy (such as mobile telecommunications), it will enjoy a crucial advantage as it begins to connect in a new sector (automobiles, for example). This can, in turn, drive more and more markets to tip, and the many players competing in traditionally separate industries get winnowed down to just a few hub firms that capture a growing share of the overall economic value created—a kind of digital domino effect.

They give then some well-known examples of our near past:

Just a few years ago, cell phone manufacturers competed head-to-head for industry leadership in a traditional product market without appreciable network effects. [..] But with the introduction of iOS and Android, the industry began to tip away from its hardware centricity to network structures centered on these multisided platforms. The platforms connected smartphones to a large number of apps and services. Each new app makes the platform it sits on more valuable, creating a powerful network effect that in turn creates a more daunting barrier to entry for new players. Today Motorola, Nokia, BlackBerry, and Palm are out of the mobile phone business, and Google and Apple are extracting the lion’s share of the sector’s value. The value captured by the large majority of complementors—the app developers and third-party manufacturers—is generally modest at best.

The domino effect is now spreading to other sectors and picking up speed. Music has already tipped to Apple, Google, and Spotify. […] On-premise computer and software offerings are losing ground to the cloud services provided by Amazon, Microsoft, Google, and Alibaba. In financial services, the big players are Ant, Paytm, Ingenico, and the independent start-up Wealthfront; in home entertainment, Amazon, Apple, Google, and Netflix dominate.

Where are powerful hub firms likely to emerge next? Health care, industrial products, and agriculture are three contenders. But let’s examine how the digital domino effect could play out in another prime candidate, the automotive sector […].

The authors then describe their analysis of the transformation that is going on in the automotive sector:

As with many other products and services, cars are now connected to digital networks, essentially becoming rolling information and transaction nodes. This connectivity is reshaping the structure of the automotive industry. When cars were merely products, car sales were the main prize. But a new source of value is emerging: the connection to consumers in transit. […] If consumers embrace self-driving vehicles, that one hour of consumer access could be worth hundreds of billions of dollars in the U.S. alone.

Which companies will capitalize on the vast commercial potential of a new hour of free time for the world’s car commuters? Hub firms like Alphabet and Apple are first in line. They already have bottleneck assets like maps and advertising networks at scale, and both are ready to create super-relevant ads pinpointed to the car’s passengers and location. […]

The transformation will also upend a range of connected sectors—including insurance, automotive repairs and maintenance, road construction, law enforcement, and infrastructure—as the digital dominos continue to fall. […]

In conclusion :

To reach the scale required to be competitive, automotive companies that were once fierce rivals may need to join together. […]

Of course, successful collaboration depends on a common, strongly felt commitment. So as traditional enterprises position themselves for a fight, they must understand how the competitive dynamics in their industries have shifted.

I think this analysis is highly accurate and we can expect similar developments in other industries.  They give a good advice to bare in mind when defining the best strategy for the long term.

Be Sociable, Share!

Embrace difficulties to stay mentally fit and happy!

I just came by this old article from Ian Leslie in The Economist magazine, it’s about a thought: embrace difficulties when they arise, they force us to be more creative and bring more satisfaction when we overcome them.

There are two ideas intertwined here: the first one is that when things come too easy, we don’t savor them enough. In French I would say « Il faut de la pluie pour faire le beau temps ».

This article brought up a memory of my childhood: we had the means to eat good meat every day. Yes, you can argue that having meat every day is not healthy, but having been brought up in Argentina, well, meat (of any kind) was mandatory at the menu! The thing is that I remember a period we ate beef tenderloin, that is a very tender cut of beef meat. Obviously, we appreciated that cut, and for a long period, every dish at home containing beef meat was done with that cut.  On the oven, as a steak, or in a wok, it was always tenderloin.

Believe me, you can get tired of it!  After a while, whenever I went for dinner to friends and they had another cut, I really savored it, even if it was not so tender.

What about not having money limitations? Yes, I’m sure I would go for a ravaging shopping for a while… until I’ll end up having more than what I need, more than what I could wear on a season! And what after that?  Shopping will not taste the same ?

It’s the same on other levels. At work, if there is no challenge, we’d lose interest, emotion.

But not only that, here is the second idea: challenges force us to think, guide our imagination and help us to come up with innovative solutions. And after the exercise, we end up with a sense of satisfaction of having solved the problem that we would not have experienced without the problem in the first place. This sense of satisfaction for having stretched our brain muscle is equivalent to the endorphin’s after a physical exercise!

Our brains respond better to difficulty than we imagine. In schools, teachers and pupils alike often assume that if a concept has been easy to learn, then the lesson has been successful. But numerous studies have now found that when classroom material is made harder to absorb, pupils retain more of it over the long term, and understand it on a deeper level. Robert Bjork, of the University of California, coined the phrase “desirable difficulties” to describe the counter-intuitive notion that learning should be made harder by, for instance, spacing sessions further apart so that students have to make more effort to recall what they learnt last time. Psychologists at Princeton found that students remembered reading material better when it was printed in an ugly font.

So remember next time you encounter a pebble on your way : embrace the opportunity of some brain gymnastic and enjoy life!

Be Sociable, Share!

Using The Past To Discover What The Customer Will Want Next

I loved the article What’s your best innovation bet? by Melissa Schilling in this summer issue of the Harvard Business Review, as it has always been very hard to guess the future:

Image from Magda Kochanowicz

Melissa Schilling says that “By mapping a technology’s past, you can predict what future customers will want.”  For that she explains her method:

  • 1 – Identify the key dimensions

What she means here is to examine/analyse/determine the different aspects in which the technology has evolved, like on processing speed or on precision just to mention some typical dimensions, and to relate them to the need of users: how much has the technology satisfied that need? She gives a clear example with the recording industry, where the basic dimension for many years was the audio fidelity:

By the mid-1990s, both industries were eager to introduce a next-generation audio format. In 1996 Toshiba, Hitachi, Time Warner, and others formed a consortium to back a new technology, called DVD-Audio, that offered superior fidelity and surround sound. They hoped to do an end run around Sony and Philips, which owned the compact disc standard and extracted a licensing fee for every CD and player sold.

Sony and Philips, however, were not going to go down without a fight. They counterattacked with a new format they had jointly developed, Super Audio CD. Those in the music industry gave a collective groan; manufacturers, distributors, and consumers all stood to lose big if they bet on the wrong format. Nonetheless, Sony launched the first Super Audio players in late 1999; DVD-Audio players hit the market in mid-2000. A costly format war seemed inevitable.

You may be scratching your head at this point, wondering why you’ve never heard about this format war. What happened? MP3 happened. While the consumer electronics giants were pursuing new heights in audio fidelity, an algorithm that slightly depressed fidelity in exchange for reduced audio file size was taking off. Soon after the file-sharing platform Napster launched in 1999, consumers were downloading free music files by the millions, and Napster-like services were sprouting up like weeds.

If you wonder: ”who could have predicted the disruptive arrival of MP3? How could the consumer electronics giants have known that a format on a trajectory of ever-increasing fidelity would be overtaken by a technology with less fidelity?” Well, that’s just the method she’s presenting in this article, which first step is identifying the different dimensions at play.

For example, computers became faster and smaller in tandem; speed was one dimension, size another. Developments in any dimension come with specific costs and benefits and have measurable and changing utility for customers. Identifying the key dimensions of a technology’s progression is the first step in predicting its future.

To determine these dimensions, trace the technology’s evolution to date, starting as far back as possible. Consider what need the technology originally fulfilled, and then for each major change in its form and function, think about what fundamental elements were affected.

Tracing its [the recording industry] history reveals six dimensions that have been central to its development: desynchronization, cost, fidelity, music selection, portability, and customizability. Before the invention of the phonograph, people could hear music or a speech only when and where it was performed. When Thomas Edison and Alexander Graham Bell began working on their phonographs in the late 1800s, their primary objective was to desynchronize the time and place of a performance so that it could be heard anytime, anywhere. Edison’s device—a rotating cylinder covered in foil—was a remarkable achievement, but it was cumbersome, and making copies was difficult. Bell’s wax-covered cardboard cylinders, followed by Emile Berliner’s flat, disc-shaped records and, later, the development of magnetic tape, made it significantly easier to mass-produce recordings, lowering their cost while increasing the fidelity and selection of music available.

For decades, however, players were bulky and not particularly portable. It was not until the 1960s that eight-track tape cartridges dramatically increased the portability of recorded music, as players became common in automobiles. Cassette tapes rose to dominance in the 1970s, further enhancing portability but also offering, for the first time, customizability—the ability to create personalized playlists. Then, in 1982, Sony and Philips introduced the compact disc standard, which offered greater fidelity than cassette tapes and rapidly became the dominant format.

[…] I usually ask teams to agree on three to six key dimensions for their technology.

The recurring dimensions across industries are: ease of use, durability and cost.  To foresee the future, it is worth also to imagine new  dimensions worth exploring. A good tip to come up with those new aspects is to think big, no constraints, what could the customer want in an ideal world.

Folklore has it that Henry Ford once said, “If I had asked people what they wanted, they would have said faster horses.” If any car maker at the time had really probed people about exactly what their dream conveyance would provide, they probably would have said “instantaneous transportation.” Both consumer responses highlight that speed is a high-level dimension valued in transportation, but the latter helps us think more broadly about how it can be achieved. There are only limited ways to make horses go faster—but there are many ways to speed up transportation

  • 2 – Locate your position

For each dimension, examine the value consumers are receiving for actual technology

This will help reveal where the greatest opportunity for improvement lies.

[..] For example, the history of audio formats suggests that the selection of music available has a concave parabolic utility curve: Utility increases as selection expands, but at a decreasing rate, and not indefinitely. When there’s little music to choose from, even a small increase in selection significantly enhances utility. Consider that when the first phonographs appeared, there were few recordings to play on them. As more became available, customers eagerly bought them, and the appeal of owning a player grew. Increasing selection even a little had a powerful impact on utility. Over the ensuing decades, selection grew exponentially, and the utility curve ultimately began to flatten; people still valued new releases, but each new recording added less additional value. Today digital music services like iTunes, Amazon Prime Music, and Spotify offer tens of millions of songs. With this virtually unlimited selection, most customers’ appetites are sated—and we are probably approaching the top of the curve.

Many dimensions have S-shaped curves: Below some threshold of performance there is no utility, but utility increases quickly above that threshold and then maxes out somewhere beyond that.

  • 3 – Determine your focus

Once you know the dimensions along which your firm’s technology has (or can be) improved and where you are on the utility curves for those dimensions, it should be straightforward to identify where the most room for improvement exists. But it’s not enough to know that performance on a given dimension can be enhanced; you need to decide whether it should be. So first assess which of the dimensions you’ve identified are most important to customers. Then assess the cost and difficulty of addressing each dimension.

For example, of the four dimensions that have been central to automobile development—speed, cost, comfort, and safety—which do customers value most, and which are easiest or most cost-effective to address?

[..] Tata Motors’ experience with the Nano is instructive. The Nano was designed as an affordable car for drivers in India, so it needed to be cheap enough to compete with two-wheeled scooters. The manufacturer cut costs in several ways: The Nano had only a two-cylinder engine and few amenities—no radio, electric windows or locks, antilock brakes, power steering, or airbags. Its seats had a simple three-position recline, the windshield had a single wiper, and there was only one rearview mirror. In 2014, after the Nano received zero stars for safety in crash tests, analysts pointed out that adding airbags and making simple adjustments to the frame could significantly improve the car’s safety for less than $100 per vehicle. Tata took this under advisement—and placed its bets on comfort. All 2017 models include air-conditioning and power steering but not airbags.

Once you have identified the dimensions, the author suggests scoring these criteria to help you prioritize where to put the effort of innovation: how much users care about the dimension, room for improvement of the technology, and the cost involved in developing a new product on that dimension.  See this example for blood-sugar monitoring devices:

DIMENSION IMPORTANCE TO
CUSTOMERS (1–5 SCALE)
ROOM FOR
IMPROVEMENT (1–5 SCALE)
EASE OF
IMPROVEMENT (1–5 SCALE)
TOTAL
SCORE
RELIABILITY 5 1 1 7
COMFORT 4 4 3 11
COST 4 2 2 8
EASE OF USE 3 2 3 8

This matrix is very helpful to explicit the need to change a company’s traditional strategy:

It can also help overcome the bias and inertia that tend to keep an organization’s attention locked on technology dimensions that are less important to consumers than they once were.

Depending on your company’s situation (lack of cash, strong market position,..) you can weight some of the scoring to get your ‘personalised score. You can also use this method to analyse your competitors positioning and expected future products.  Knowing their actual market strength and their potential future directions will make you see the best ‘bet’ for your company in an ever evolving industry.

The technology assessment exercise can help companies anticipate competitors’ moves. Because competitors may differ in their capabilities (making particular technology dimensions harder or easier for them to address), or because they may focus on different segments (influencing which dimensions seem most important or have the most room for improvement), they are likely to come up with different rankings for a given set of dimensions.

The great insight of the method presented in this article is not on getting the innovation idea, but more at a strategic level, on where it will be better to put the effort for Your company considering its Actual circumstances at this Present market (evolution of the industry and existing competence).

Perhaps more valuable is the big-picture perspective it can give managers—shedding new light on market dynamics and the larger-scale or longer-term opportunities before them. Only then will they be able to lead innovation in their industries rather than scramble to respond to it.

Be Sociable, Share!