Using research circles to develop innovative product and services for an aging baby-boomer population

This research article, Laggards as Innovators? Old Users as Designers of New Services & Service Systems,  challenges the notion that elderly users of the social web are generally laggards in this medium and, thus, not viable sources of relevant input when using service design methodologies to design products and services that meet their needs. Service design

[I]s the activity of planning and organizing people, infrastructure, communication and material components of a service in order to improve its quality and the interaction between service provider and customers. The purpose of service design methodologies is to design according to the needs of customers or participants, so that the service is user-friendly, competitive and relevant to the customers.” Wikipedia citation

“New service design” basically incorporates social networking and crowd-sourcing concepts into this process. The authors of the study found that a widespread view existed amongst service system designers that elderly or senior users were “technophobes” or technology laggards and, thus, had no relevant input when using modern service design processes. Yet, there is an under-served market with respect to the aging baby-boomer population. The researchers argue that there is a great opportunity to service this market using human-centered design processes in a variety of industries across several product classes. For example, there are several unsatisfied needs for this market that “relate to fundamental aspects of a dignified life, such as being able to buy furniture they can use in their homes, being able to stay in their neighborhood in the center of town and in generally leading as independent and normal a daily life as possible.”

The researchers offer several tips on how to involve the aging consumer segment into the design process using the concept of a “research circle”. The premise of the research circle differs from a focus group in the sense that a focus group is designed to get “get feedback from people on their attitudes towards new products, services or ideas” and is a fairly structured process. A research circle is more long term in nature, and employs a researcher who facilitates collaborative group problem solving. The figure below describes the process:

Stages applied based on research circle method and milestones
Stages applied based on research circle method and milestones

The researchers point out that the process they’ve defined is not geared towards getting aging users to adopt a new product or service. Rather, the process is to gain insights and information from this group so as to deliver innovative products and services that meet their needs.

Factors underpinning creative leadership and innovative leadership

What constitutes creative leadership? What constitutes innovative leadership? How do these factors–creativity and innovation–influence a firm’s competitive advantage? These two articles, IBM’s Capitalizing on Complexity and Organizational Creativity: Building a Business Ba-Haus?, provide interesting insights.

In a previous post I discussed how firms can foster a culture of creativity and innovation. Innovative firms nurture the following:

  • High levels of interaction, discussion, and debate
  • Interpersonal and intergroup relations defined by trust, cooperation, and a sense of safety
  • Senior management that’s open to new ideas and improved ways of working, and proves its openness by encouraging such actions and funding them when meritorious

Indeed, IBM found that mid-market CEO’s consider creativity as one the most important leadership qualities. Creative leaders encourage experimentation, calculated risk taking, and are more willing to take on complex issues to drive deeper strategic and systemic changes. Further, these CEOs consider creativity as an essential element for successful leadership in an increasingly complex business environment. The IBM study found that creative leaders:

  • Invite disruptive innovation
  • Encourage others to drop outdated approaches and take balanced risks
  • Are open-minded and inventive in expanding their management and communications styles so as to engage with a new generation of employees, partners and customers

In the Bauhaus article cited above, the authors point to the following factors as influencing a culture–a “climate”–of creativity:

  • Involvement: To what degree are people challenged, involved and committed to making contributions to the success of the organization?
  • Freedom: To what degree are people able to decide how to do their jobs, take independent initiatives and make decisions?
  • Trust: To what degree do people trust each other, as well as feeling safe in being genuinely open and honest with each other?
  • Time: To what degree do people have the time to think, explore and test new ideas and ways of doing things?
  • Playfulness: To what degree do people feel it is OK to have fun when working, be playful and humorous?
  • Conflict: To what degree do people engage in interper- sonal conflict, prestige and territory struggles?
  • Support: To what degree do people encourage, warmly receive and professionally support ideas?
  • Debate: To what degree do people frequently share, con- sider and discuss a variety of viewpoints?
  • Risk Taking: To what degree do people regard failure as an opportunity to learn and feel able to take risks in trying new things?
The factors above foster a culture of success by creating a firm environ where employees AND management feel comfortable making mistakes and are rewarded for calculated risk taking. Further, these factors promote an overall sense of trust and compassion, which in turn promotes a culture of excellence, discipline, and execution.

Photo credit: 50 Watts

Speaking on visionary innovation

I have the pleasure of speaking at the GIL Silicon Valley innovation and leadership summit, hosted by Frost & Sullivan. My session focuses on developing an integrated IP focused organization, which relates to fostering a culture of creativity and innovation. Here is a list of core research I’ll discuss during my session:

 

Creating agile entrepreneurial teams promotes creativity and innovation

This Vanity Fair and Forbes article details how Microsoft stifled innovation in product design and development by using a rigid and hierarchical performance review process. Microsoft used a review process known as “stack ranking”, which forces each business unit designate a percentage of employees as top performers, good performers, average performers, and poor performers.

Here’s what a former Microsoft employee said about the process:

If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review[.]…It leads to employees focusing on competing with each other rather than competing with other companies.

Interesting how a fairly routine process like performance reviews can seemingly have a profound impact on a company’s success. In a 2009 post I detailed steps companies can take to foster a culture of creativity and innovation; creative and innovative companies have (1) high levels of interaction, discussion, and debate, (2) interpersonal and intergroup relations defined by trust, cooperation, and a sense of safety, and (3) senior management that’s open to new ideas and improved ways of working, and proves its openness by encouraging such actions and funding them when meritorious.

Similarly, this recent research details how small firms can effectively compete with larger firms when the small firm CEO works closely with internal teams. The researchers found that if a firm wants to excel at product innovation then the CEO should work closely with R&D department employees. If a firm wants to excel at process innovation, then the CEO should work closely with managers and non-managerial employees in the production department. The optimal mix, the researchers found, is where a firm creates small agile teams within the respective divisions and the CEO is routinely involved in leading the initiatives these teams are tasked with tackling. The researchers, however, did not measure the effectiveness or quality of the innovation output, only that ideation generally increased. Nevertheless, it seems to me that a small firm would have a better shot at out-performing its competitors with a surplus of ideas rather than a dearth of such.

Photo credit: Budzlife

Disruptive technology and its impact

The research article Demystifying Disruption: A New Model for Understanding and Predicting Disruptive Technologies delves into several topics related to understanding and predicting disruptive technologies. An interesting facet of the article is how it outlined three domains of disruption: technology disruption (when a new techology outperforms a dominant technology), firm disruption (when the market share of a firm leveraging  a new technology exceeds that of the largest firm using a previously dominant technology), demand disruption (when the total share of products in the market based on a new technology exceeds that of products based on a previously dominant technology). The authors also focused on the method of attack:
A lower attack occurs when, at the time of its entry, a new technology performs worse than the dominant technology on the primary dimension of performance. An upper attack occurs when, at the time of its entry, a new technology performs better than the dominant technology on the primary dimension of performance
The authors tested the following hypotheses:
  1. Technologies using a lower attack (potentially disruptive) come primarily from entrants
  2. Technologies using an upper attack (sustaining breakthrough) come primarily from incumbents
  3. Technologies using a lower attack (potentially disruptive) are priced lower than dominant technologies at entry
  4. The hazard of disruption is higher from an entrant than from an incumbent
  5. The hazard of firm or demand disruption is higher if a new technology uses a lower attack
  6. The hazard of disruption is higher if a new technology is introduced by a small firm
  7. The hazard of disruption is lower if a new technology is introduced by a small firm
  8. The hazard of disruption is higher if a new technology is lower priced than the dominant technology at entry

What the authors discovered is that contrary to popular belief, incumbents in certain markets drive disruption as frequently as new entrants. In fact, in their study the authors found that:

only 8% of all technology disruptions and 25% of all firm disruptions were caused by entrants using a lower attack

– and –

although 47% of all technologies adopt a lower attack, only 16% of all technologies cause technology disruption and only14% of all technologies cause firm disruption via a lower attack

Interestingly, the authors note that a firm’s internal culture is responsible for undertaking an attack, rather than responding to an external threat. That’s why creating a culture of innovation and creativity is a key factor in successfully introducing a sustainable disruptive technology.

Google+ Integrated into Google Apps, Huh?

This morning I envisioned a headline on Mashable that could, someday, read: “Finally…Google+ Integrated into Google Apps”. The Enterprise Google Apps community has been waiting months for this to happen.
Google+ surfing in an ocean of business
Surf with Google+
And still…we…wait. Once this happens, though, here are some ways Google+ will rock my business world:
  • Allow me to use one network (rather than several networks) to communicate with nearly 2,000 sales associates. This necessarily will increase my personal productivity. And with this productivity increase I’ll have more time to focus on providing more value to these 2,000 sales associates.
  • Give these nearly 2,000 sales associates one network to use (rather than several networks) to collaborate, share ideas, and help each other. They are THE community. Google+ in Apps will further unleash the collective brilliance of this community.
  • Leverage the Google+ social nervous system to achieve several business objectives by aligning fundamental community management concepts, principles, and processes within a social business ecosystem (as brilliantly illustrated by @davidarmano).
The tectonic plates of Google’s product development teams need to align and unleash the Pangaea of a social business platform for its Enterprise clients. Sooner rather than later, please, Google. Opportunity awaits us both.
Photo credit: gordontarpley

Creating a culture of participation while leveraging a culture of creativity and innovation

Previously I wrote about creating a culture of creativity and innovation. The salient points to remember in such an initiative are: foster a high level interaction, discussion, debate and have a leadership team that nurtures such an idea generating ecosystem.

sideways

Related to this topic is a fascinating research article I found that focuses on creating a culture of participation (.pdf). The article discusses collaborative design projects (as in architecture, landscape design, etc), but the premises are transcendent to many industries:

  1. Creativity is an inherently collaborative and social activity and social-technical infrastructures facilitate such by organizing people around shared concerns as opposed to shared location
  2. Diversity (as facilitated by shared concerns) promotes new ideas, insights, etc, by building bridges between local knowledge sources and exploiting “conceptual collisions” (related to Von Hippel’s studies in innovation at MIT).

The article elaborates on a couple of case studies and points out the following areas for further exploration: (1) the role of curators—as supported through technological infrastructure—to organize “living information repositories” (see related article on how the BBC uses data mining principles to enable more informed curatorial choices) and (2) enhanced tagging mechanisms that support heuristic knowledge discovery activities.

Additionally, there are two blog posts that relate to the themes raised above, courtesy of Daniel Rothamel and Rob Hahn respectively, essentially “create, then debate”  and “embrace your inner auteur“.

Photo: Håkan Dahlström

 

 

Research from CISCO, innovation in business intelligence services, and predictive Web data mining

Below are three articles discussing emerging analytical theories on the nexus between Web+Social+Mobile:

Executive Primer: CISCO CIO Summit (.pdf): Excellent primer on how The Cloud, generally, is affecting enterprise IT strategic direction. Two gems: Chapter 6 “Together, the Customer Is Everywhere and Everyone” and Chapter 10 “Scenario Planning: Are You Ready?”.

Business Intelligence 2.0:  Are we there yet? (.pdf): Excellent paper focusing on innovation in business intelligence; includes and excellent benefits analysis chart.

Toward Emerging Topic Detection for Business Intelligence: Predictive Analysis of ‘Meme’ Dynamics (.pdf): This is for analytical geeks only (:-D). The paper discusses the problem of monitoring the Web to spot emerging memes. Essentially, using predictive algorithms to tease out future memes, which would be useful to brand managers in terms of seeding current campaigns with flavors of the future as dictated by the algorithm. The risk is that it can get a bit tautological.

 

Research on social proximity

In response to a request by @Gahlord to research the concept of “social proximity” I have found eight articles that broadly sketch the primary issues and principles related to “social proximity”.

In Towards Design Guidelines for Portable Digital Proximities A Case study with Social Net and Social Proximity (.pdf), the authors apparently introduced the concept of social proximity, which they define as:

[T]he relationships between people in space, within social networks, and through time.

In Life in the network: the coming age of computational social science, the authors discuss the rapidly changing pace of computational social science.

In To join or not to join: the illusion of privacy in social networks with mixed public and private user profiles (.pdf) the authors discuss privacy issues related to social media and the natural tension between “public” and “private” information (see also my earlier article relating to this topic).

In Inferring friendship network structure by using mobile phone data, the authors found that it’s possible to infer with 95% accuracy friendships based on mobile data.

In Bridging the Gap Between Physical Location and Online Social Networks (.pdf), the authors demonstrate how to predict friendship between two users using their respective location trails.

In Social distance, heterogeneity, and social interactions (.pdf, and I hope you’re good in mathematics to understand this article), the authors propose a new model to analyze peer group interactions.

In Connectivity Does Not Ensure Community: On Social Capital, Networks and Communities of Place (.pdf), the author proposes that the strongest online communities are those create senses of social ownership within the community.

In Semantic Grounding of Tag Relatedness in Social Bookmarking Systems (.pdf) the authors discuss how collaborative tagging systems can be used to derive a global tagging relatedness structure from an uncontrolled tagging folksonomy.

In The anatomy of a large-scale social search engine (.pdf) the authors present Aardvark, a social search engine.

Web intelligence and the dispersion of public thought

Two seemingly unrelated articles recently caught my attention. Both articles touch on a similar meme: making sense out of the data bog which is le Web.

Article one: The Path to Web Intelligence Maturity (.pdf) discusses how companies can leverage Web analytics to gain behavioral insights on individual prospects and customers. The author walks you through how you turn such insights into targeted marketing initiatives at key stages of the customer life-cycle.

Article two: Social Network Markets and ‘Public Thought’ (.pdf), written in response to Clay Shirky’s Internet post The Shock of Inclusion, the author takes you through a fascinating and enlightening read on the quality and reach of public thought. Indeed, the paper touches on themes raised by Gahlord Dewald during his recent presentation at Inman Connect NYC 2011 on “convergence” versus “dispersion”, where Dewald essentially argued that dispersion as opposed to convergence should function as the governing archetype that drives social web app and platform development.

Three top sources discussing collaborative and collective innovation strategies and theories

As you head into 2011, here are three sources to get your innovation game plan together:

In the research paper, Collective Intelligence for Competitive Advantage: Crowdsourcing and Open Innovation, the author–a global transition manager at Nike Inc–conducts an exhaustive analysis of current research on the topic of leveraging crowdsourcing concepts and open innovation principles to deliver innovative products and services. The author makes the following recommendations:

Recommendation # 1 – Focus on creating an innovative organizational culture, in which experimentation and failure are supported and encouraged. Use the seven lessons of innovation by Koulopoulos (2009) as the guide.

Recommendation # 2 – Create a collective intelligence (CI) system by answering the four primary questions: Who is performing the task? Why are they doing it? What is being accomplished? How is it being done?

Recommendation # 3 – Focus on the utilization of an open innovation business model by developing a plan for and defining the primary tenets of the model, to include (a) value proposition, (b) market segmentation, (c) value chain, (d) revenue generation, and (e) competitive strategy.

Recommendation # 4 – Map out the four types of innovation: 1) Neutral, 2) Positive, 3) Negative, and 4) Open. An organization should operate in all 4 quadrants, but for market leadership open innovation is the most critical (Koulopoulos, 2009).

Recommendation # 5 – Understand how the CI system can be deployed into the value chain where internal and external knowledge is leveraged. Define how the CI system will integrate with the current value chain and which parts exist to support the system and which elements need to be developed.

In the paper, Organizing Innovation: Complementarities between Cross-Functional Teams (.pdf), researchers found that deploying cross-functional teams across new product/systems development processes yields positive gains for consumers and companies. The researchers also found that marketing departments are critical components of an innovative-driven cross-functional team because of the customer-centric views customarily espoused by such departments.

In the Harvard Business Review podcast, The Economics of Mass Collaboration (~ 15 min) the commentator, Don Tapscott, author of Macrowikinomics: Rebooting Business and the World, discusses the concepts of how companies can harness mass collaboration to deliver innovative products and services.

User experience and product innovation

Recently, at the Web 2.0 summit, Palm’s CEO said (as reported in All Things Digital):

Palm created the PDA space with the Pilot and the smartphone space after it with the Treo…So by birthright, Palm should have owned the smartphone market, but it just lost its way.

I’ve been intrigued by this facet of the “smartphone era”: Palm’s, NOKIA’s, Motorola’s whole job—theoretically—was to understand the needs, wants, desires of the mobile phone user. Theoretically they each spent millions of dollars a year in R&D, consumer research, prototyping, product development, etc. Yet Apple smoked them all. Apple focuses on the user experience—from the moment a user decides to enter Apple’s commerce stream, to the moment a user opens a box, to the moment a user first sets up a device to the moment a user interacts that device. With Apple, product = experience and experience = product. It seems a superior user experience—a 365 degree, multi-dimensional experience—is the ultimate killer product/app.

The importance of users versus consumers in building a community

The book Democratizing Innovation by MIT Professor Eric Von Hippel (available via free .pdf download) makes an interesting observation about the term “consumer”. Throughout his book, Von Hippel employs the term “user” as opposed to consumer:

Users, as the term will be used in this book, are firms or individual consumers that expect to benefit from using a product or a service. In contrast, manufacturers expect to benefit from selling a product or a service.

This is a powerful–albeit simple–point of distinction within the context of the social web, with implications for social commerce too (which I have recently written about here). Focus primarily on the benefits of the user, not solely on your needs as a “manufacturer”. What value are you bringing a user of your content, service, advice, etc? By constantly evaluating the needs of your user-clients and delivering benefits based on these needs, you’re increasing the odds that your user-clients will become a passionate community centered around this value as opposed to simply a crowd that wanders by.

Information sharing across the social web: usability, minimalist design, and consumer choice

This article in the Atlantichttp://www.theatlantic.com/technology/archive/2010/11/the-undesigned-web/65458/ by Dylan Tweney (@dylan20http://twitter.com/#!/dylan20) essentially argues that as consumers adopt a minimalist approach towards reading, sharing (i.e., reformatting content to meet their needs and the needs of their social sphere), and generally consuming content (information), devices like the iPad will engender even more pressure on publishers align usabilty concepts with sound information architecture concepts. Indeed, the iPad imbues a sensual, tactile element to information consumption. Fingertips are one of the most sensitive areas on our bodieshttp://en.wikipedia.org/wiki/Merkel_nerve_ending, and by virtually touching, massaging, moving, aligning, etc, information via the iPad transfers a degree of intimacy unmatched by even printed material. Tweney seems to argue that the tactil nature of iPad represents an inflection point in future information design, publishing, and consumption.
As a slight counter-point to Tweney’s missive, this articlehttp://www.fastcodesign.com/1662630/is-undesigned-the-next-great-web-trend-fat-chance argues that Tweney misses the point by claiming that design is dead and makes some excellent points:
“The future is all about designing for multiple use cases[.]”
“Digital design isn’t fading, but it is changing: to keep pace with evolving technology, to drive new economics, to satisfy users’ dynamic desires. Indeed, the fact that we tend to call them “users” in the first place–instead of viewers, readers, or audiences–is important to keep in mind when considering the role or future of digital design.”
The author, John Pavlushttp://twitter.com/johnpavlus, cites many useful sources to support his argument that a minimalist-centric interface is actually the result a complex design-thinking (ala, a Ferrari on the outside appears simple and elegant but underneath the hood it’s a complex machine). Similarly, a minimalist approach can actually be brilliantly enhanced by restricting consumer choice by presenting consumers with well thought-out, curated, and highly selective choices (ala 37 Signals). Finally, both Tweney and Pavlus are joined by researchers who are conducting some very interesting research on this topic: The Paradox of Simplicity: Effects of User Interface Design on Perceptions and Preference of Interactive Systemshttp://aisel.aisnet.org/mcis2010/30/ (registration required), A Model of Experience Test for Web Designershttp://eprints.qut.edu.au/18371/1/c18371.pdf, A Model for Understanding Social Commercehttp://proc.conisar.org/2010/pdf/1511.pdf
Photo credit: seier+seierhttp://www.flickr.com/photos/seier/493929328/
This article in the Atlantic by Dylan Tweney (@dylan20) essentially argues that as consumers adopt a minimalist approach towards reading, sharing, and generally consuming content (information), devices like the iPad will put even more pressure on publishers to align usability concepts with sound information architecture concepts. Indeed, the iPad imbues a sensual, tactile element to information consumption.
Fingertips are one of the most sensitive areas on our bodies, and the iPad transfers to a consumer a degree of intimacy by enabling him/her to virtually touch, massage, move, and align information in a very personal way. Tweney seems to argue that the tactile nature of an iPad represents an inflection point in future information design, publishing, and consumption.
As a slight counter-point to Tweney’s missive, this article argues that Tweney misses the point in claiming that “traditional” digital design is dead; as counterpoints, the author points out:
“The future is all about designing for multiple use cases[.]”
“Digital design isn’t fading, but it is changing: to keep pace with evolving technology, to drive new economics, to satisfy users’ dynamic desires. Indeed, the fact that we tend to call them “users” in the first place–instead of viewers, readers, or audiences–is important to keep in mind when considering the role or future of digital design.”
The author, John Pavlus, cites many useful sources in his article to support his argument that minimalist-centric interface design is actually the result of complex design-thinking. Similarly, a minimalist approach can actually be brilliantly enhanced by restricting consumer choice by presenting consumers with well thought-out, curated, and highly selective choices (ala 37 Signals theories). Finally, both Tweney and Pavlus are joined by researchers who are conducting interesting studies on this topic: The Paradox of Simplicity: Effects of User Interface Design on Perceptions and Preference of Interactive Systems (registration required), A Model of Experience Test for Web Designers, A Model for Understanding Social Commerce.
Photo credit: seier+seier

A simple lesson from Steve Jobs

Thank you to @sherrychris for finding this article on Steve Jobs. What I like about this article is that it delves—slightly–into Jobs’ mindset via an interview with his “last” boss. It’s a fascinating romp. Here’s one key take-aways that were meaningful to me:
“What makes Steve’s methodology different from everyone else’s is that he always believed the most important decisions you make are not the things you do, but the things you decide not to do.”
Very simple concept, yet powerful. Reading through the interview we learn that Steve regularly met with the leader of SONY and was given a prototype of the first SONY Walkman. And the first thing he did was take it apart to look at its component parts. I can image Jobs making a list of “not likes” with the Walkman over a decade, which yielded the iPod. The same can plausibly be said for a mobile phone too. I can imagine Jobs using NOKIA and Motorola products and making a list of “not likes”, which yielded the iPhone. Focus on making a “not like” list to improve your product offering or client service delivery. Who knows, maybe you’ll revolutionize an industry too.
http://farm3.static.flickr.com/2783/4270425994_508f78a00f_m.jpg
timtakhttp://www.flickr.com/photos/nihonbunka/4270425994/
Thank you to @sherrychris for finding this article on Steve Jobs. What I like about this article is that it delves—slightly–into Jobs’ mindset via an interview with his “last” boss. It’s a fascinating romp. Here’s one meaningful take-away:
“What makes Steve’s methodology different from everyone else’s is that he always believed the most important decisions you make are not the things you do, but the things you decide not to do.”
Very simple concept, yet powerful. Reading through the interview we learn that Steve regularly met with Akio Morita, co-founder of SONY, and was given a prototype of the first SONY Walkman. And the first thing he did was take it apart to look at its component parts. I can image Jobs making a list of “not likes” with the Walkman over a decade or more, which yielded the iPod. The same can plausibly be said for a mobile phone too. I can imagine Jobs using NOKIA and Motorola products and making a list of “not likes”, which yielded the iPhone. Focus on making a “not like” list to improve your product offering or client service delivery. Who knows, maybe you’ll revolutionize an industry too.
Photo credit: timtak

Collaborative innovation, good ideas, and competitive differentiation

According to this Harvard Business Review podcast on collaborative innovation, the Internet dramatically drops collaboration and transaction costs thus enabling corporations to orchestrate capabilities more efficiently. Collaborative innovation can yield dramatic results in meaningful new product designs, service delivery models, and customer satisfaction; potentially yielding an endless supply of “good ideas”.

But where do good ideas come from? This video gives a succinct explanation of the basic genesis of good ideas:

Assuming good ideas require a certain period of gestation to manifest, collabortive innovation principles can collapse the time required to let great ideas blossom. MRIS recently took a bold step in collaborative innovation by incenting university students to use MRIS’ data resources to create novel, customer-driven products (in 2009 I suggested that MLS’ follow a similar model). The real estate industry is a perfect industry to employ collaborative innovation principles; it will be interesting to see what the crowd develops for MRIS.

Photo credit: jacreative

Related posts: Innovation and competitive differentiation using idea management systems and Sustainable innnovation and excellence in product development

Small agile groups drive innovation

According to this MIT Technology Review article, agile groups with fluid ideation and development team dynamics routinely create more innovative products. Yet commercialization of an innovative product is another matter. Successful monetization of a product requires a disciplined approach towards continuous systems and process improvements. But herein resides a trap: once an innovative product becomes systemized, further innovation on that product can become frozen as profitability goals dictate less variance in the process. Companies like W.L. Gore & Associates seemed to have solved this dilemma.

New media innovation issues and risks

This research paper, Power, media culture and new media, delves into social justice issues surrounding the democratizing effects of new media. The paper points out that new media benefits (e.g., easier access to information through widespread platforms like mobile devices) are not equally shared or distributed across class, race, or national origin. The paper also implicitly points out that the use of mash-ups along with the increasing diversity of media outlets could create a “ripe” environment for effective government-sanctioned propaganda campaigns.

Similarly, the new media environment where essentially everyone can be a “content producer” offers unprecedented opportunities for government surveillance and ultimate suppression and/or obfuscation of speech by using new media outlets as viral engines to discredit speech that’s counter to government views or objectives. The author does point out some positive reverberations from new media harmonics; and this is the alignment of human rights initiatives with new media (as embodied in such organizations like Mothers Fighting for Others). Nevertheless, the paper ends with a caution that discriminatory (and by implication, repressive) actions can re-emerge in new media, despite the overarching democratizing effects of the medium.

Does this paper relate to real estate? Not directly. It’s simply a great education piece on the broader implications of our new media economy and society.

Using play-scripting as a means to develop effective corporate strategies

Writing a “playscript” is an incredibly powerful way to conduct a competitive business review, according to this Harvard Business Review article (subscription required). The article advocates writing a “playscript” using characters and character analysis to define your company and competitive landscape for use as a foundational element in corporate strategy development.

The article argues that “traditional” strategy tools like five forces maps and blue ocean thinking are outdated because they assume a static competitive environment as opposed to a rapidly evolving one. The article argues that by drafting a “playscript”, companies are in a much better position to map the landscape and anticipate emergent competitive forces.

In developing a playscript, the article suggests focusing on the following:

1) Draft a current playsript: Broadly describe the setting in which you operate by identifying the other characters, their motivations, what role your company plays, how this role is perceived by others; it’s important to view your role as critically as you can through the eyes of others (i.e., perception is reality); map the links among all the actors and the rules that govern them; give voice to the value your organization adds.

2) Rewrite your playscript: the goal here is to rewrite your playscript and, if possible, reinvent the playscript for an entire sector by answering such questions like “Can my organization attract new alliances to my sector where I can then leverage these alliances to add to an existing link or create a new link in a customer-centered value chain?”; determine where there’s a value need and fill this need (the article cites Intrawest as an example of a company that filled a value need by creating alliances with partners that deliver an exceptional destination living experience which has allowed Intrawest to emerge as a dominant player in managing experiential destination resorts, whereas before its focus was on developing these types of properties).

3) Future-proof your playscript: consider how changes in your customer needs will affect your company by finding the correlation between who your customers are, what they want, and how they get the things they want (the article cites IKEA as a company that’s done this well by foreseeing high volatility in the prices governing the wood it uses to make its products so it purchased forests in Poland and the Baltic states to help stabilize prices, thus allowing it to confidently focus on dominating the low cost segment of the “lifestyle furnishings” market).

Since 2005, we’ve seen many playscripts written and re-written in the real estate industry with the advent of Trulia, Zillow, Redfin, etc. Since 2007, we’ve seen new marketing and customer acquisition playscripts written and re-written via the explosion of social media and social networking. And currently we’re seeing playscripts written and re-written with the emergence of mobile applications and augmented reality. What’s your playscript that will allow you to position your firm as a dominate player in your market? How do you plan to adapt to the changing needs of your clients and customers, especially in terms of mobile solutions? Who are the dominate characters in your company, your competitors, and the industry at large? Who’d you cast as Othello, Brutas, Caesar, Puck, Mr. White, Mr. Pink, Mr. Blonde?

Photo: tanakawho

Innovation and cross-functional team differentiation for competitive advantage

What factors influence effective cross-functional team environments that spur the greatest innovations and competitive advantage? The authors of this study (.pdf) (focusing on manufacturing) determined that baldly implementing a cross-functional team approach is not a universal good. Notably, the authors found that cross-functional teamwork involving marketing may have a negative effect (the authors noted too, however, that this finding contradicts earlier studies). The authors conclude that companies should focus cross-functional teams on product design, development, and engineering so as to yield the highest gains in terms of innovation. I’ll posit that this finding can be applied to firms outside the manufacturing industry that are focused on software development and related product development activities.

Interestingly, this study (.pdf) concludes that many marketing departments exert positive influence on a firm’s overall market innovation in the following areas: advertising, relationship management, segmentation, targeting, and positioning. Marketing departments can influence product innovations through their overarching customer knowledge and insight into trends. Thus, a way to effectively involve marketing in cross-functional teams focused on software-related product development activities is to have the marketing team drive a voice of the customer ethos throughout the ideation and development process.

Community crowdsourcing and innovation

The Wall Street Journal recently profiled calculator hobbyists who hack calculators to do weird (but ostensibly fun) things like making an Etch A Sketch, or a Tetris game, or synthesized music. The WSJ article also relates how a calculator company that was the target of some of these hacks sent cease and desist emails and letters to members of the calculator hack community for violations of intellectual property rights.

First, it’s understandable why the calculator company sought to protect its intellectual property. But there’s also an opportunity for the calculator company to foster a user community from this hack community, and the LEGO MINDSTORMS community offers an intriguing parable.

Product directors at LEGO MINDSTORMS first reacted negatively to a budding hobbyist community centered around their product, according to this MIT lecture, but have now embraced this community to drive product sales and innovation. Similarly, IBM has a developer community. And this research paper details how individuals update Google’s mapping system to make it more accurate, while this New York Times article discusses how a community of volunteer cartographers are logging details of neighorhoods.

Sustainable innovation and excellence in product development

In this MIT Sloan School of Management lecture on sustaining innovation, the CEO of W.L. Gore & Associates, Terri Kelly, has some great insights on how creative knowledge environments drive profitability.

W.L. Gore is a diverse and innovative company, creating products ranging from GORETEX to surgical devices. Kelly stresses to give your team the right tools, promote the right culture, maintain minimal bureaucracy, have high expectations for networking within the organization to connect and share knowledge, and recognize that leaders are “leaders” only if people actually want to follow them.

Define what you believe, define your guiding principles, define your core values, and define key disciplines. Use these four elements as the framework around which culture is nurtured, all the while recognizing that these elements must work as a system; any one element does not ensure success…it’s the interrelatedness of the components that promotes success. Culture is an active investment in terms of time, energy, and dollars, not a cost.

For W.L. Gore, this investment in culture results in amazing products like OPTIFADE hunting gear (play this game to see how it works). Obviously, W.L. Gore is doing something right. This Kelly lecture is well-worth 54 minutes of your time to gain some amazing insights.

Related post: Creating a culture of creativity and innovation

Creating a culture of creativity and innovation

Viewpoints on the future of free

Free is not the future of business.

Jason Fried, founder of 37 Signals, made this argument earlier this year at the Future of Web Apps conference. And this comment to Fried’s statement  makes a great argument based on simple economics: free is unsustainable from a product development perspective. So how does Red Hat make money by leveraging an open source system like Linux? Here’s a recent article that sheds some light on this, Red Hat is contemplating building a North American channel partner program, and it’s recently inked a deal with Amazon, and here’s an academic paper that points to three dominant ways by which to make money on open source:

  • consulting and support services around the software
  • derivative products built on the community project
  • increased revenue in ancillary layers of the software stack

The article goes on to predict that by 2012 more than half of open source revenue generated will derive from commercial open source.

I’m in agreement with Fried, and align with Robert Scoble,

I love paying for apps. Why? Because when I do that I encourage developers to build more cool apps for me…Anyway, the main point here is that it’s not the app store that’s screwed up: it’s our expectation that developers should work for free.

Scoble’s argument also aligns with Chris Brogan,

Don’t ever feel embarrassed to charge for value. Never apologize that something costs money if you’ve determined the value of it.

Makes sense to me.

Moving beyond social media

The label “social media” has lost its resonance in so far as the concept of “social media” has been reduced to a series of marketing tactics. As David Armano says in a Harvard Business Review blog article:

Let’s start with the challenges — the term “social media” itself is indicative of the state of affairs. “Media” limits our view of the movement, and brings with it the baggage of decades of advertising. Marketers are only too happy to view the social web as a new array of channels to market their goods in some shape or fashion. That’s because it’s a model they’ve used since the beginning.

Armano goes on to essentially say that “social media” represents a fundamental cultural shift. It’s a shift that started many years ago. In 2006, Cory Doctorow on BoingBoing uttered 10 words that embody this shift

Conversation is king. Content is just something to talk about.

This sentiment was re-articulated recently by Jay Thompson’s humorous, yet prescient, “Og the Caveman” parable

Back in the day, Og the Caveman would sit around the fire and talk about his day to anyone who would listen. The cave-ladies would roll their eyes while Og recounted his manly adventures, and cave-dudes would all be one upping each other with tales of who speared the bigger Mammoth…They had friends, and followers. There were popular cave-people, and there were annoying cave-people. And everything in between. Just like we have today. Only today we have whiz-bang technology tools to take our socializing and networking planet wide.

Indeed, it’s the technical infrastructure that’s a catalyst to this conversation enflamed cultural shift, most recently embodied by the battle for real-time search dominance. For example, a friend of mine recently commented on the uselessness (to him) of CNN in terms of real-time news and authority where, in the midst of the Mumbai attacks last year, the CNN anchor kept referring to Twitter as the source. Given this, my friend’s legitimate question was (still is) “So why am I wasting my time with you?” As a brand, CNN took a negative body blow.

Brands are not incognizant to this sentiment, this cultural meme, or gestalt-like shift to mine the real-time conversation core, and have launched full-bore social media marketing efforts to be part of the vein. But have these efforts been designed? Again, Armano, is on the money with this post on “filtering” the network economy and this presentation, Social Business By Design,

I especially like slide 23 where he points out an article discussing the concept of having a “Chief Social Media Officer”, which reminds me of turn-of-the-century job descriptions like Chief Electricty Officer and how irrelevant those titles were when electricity became as ubiquitous as air. So at a high-level what’s brand to do, be it a brokerage or agent brand?

As Armano demonstrates brand impressions–positive or negative–occur through many touch points, and as a brand you only have so much control. What you can control is 1) how you listen (through Twitter, Facebook, LinkedIn, blog, etc), 2) how you respond via these same channels, 3) what brand “persona” you want to convey via these listening and responding posts, 4) who you put in place to manage this process (are you serious and demonstrate that by hiring the right person for your brand versus having interns manage this process; the former indicates you’re in for the long haul whereas the latter indicates you still consider this cultural change child’s play), 5) architect your tactics by following a “designed” strategy. Here are four places to begin your strategy:

David Armano’s mind meme on design and his post on experiential design
Adam Singer on niche versus mass media
Understanding and measuring user engagement by Eric T. Petersen

Related posts: Choreographing Client Experiences on Your Website, Theatre of Cruelty in a Carnival of Real Estate, Twittering Away Your Digital Legacy

Photo credit: vkurland

Innovation in a competitive marketplace

Target, 1958, oil and collage on canvas by Jasper Johns
Target, 1958, oil and collage on canvas by Jasper Johns

Perfectly Competitive Innovation is a fascinating article on what drives innovation. The authors argue against the notion that patents and copyrights promote innovation. Rather, its a rich competitive environment that drives innovation.

In other words, regardless of copyright law, movies will continue to be produced as long as first run theatrical profits are sufficient to cover production costs; music will continue to be produced as long as profits from live performances are sufficient to cover production costs, books will continue to be produced as long as initial hardcover sales are sufficient to cover production costs, and financial and medical innovations will take place as long as the additional rents accruing to the first comer compensate for the R&D costs.

This sentiment was echoed by MIT Professor Eric von Hippel in a lecture where he discussed innovation occurring in kite surfing where practitioners put their innovations under a creative commons licensing scheme to thwart an attempt by manufacturers to exploit their innovations under traditional intellectual property rights law. Perfectly Competitive Innovation similarly points to many case studies and scenarios demonstrating that innovation does not necessarily need the traditional intellectual property rights rubric to thrive and survive.

Photo credit: cliff1066

Innovation driven by extreme user communities

According to MIT Professor Eric von Hippel’s lecture, Democratizing Innovation, manufacturers traditionally look to the center of the market to drive innovation; that is, with their penetrative questions to and analysis of this market, manufacturers think they can discern what to do in terms of innovative product development initiatives that meet consumers’ needs. What Professor von Hippel actually found is that innovation does not come from the center of the market, it comes from an extreme market fringe driven by localized users and early adopter user communities pushing the limits of an original device or prototype. As an example of this, about 22 minutes into the video, von Hippel discusses how these types of communities quickly drove up sales of Lego’s Mindstorm product, while morphing Lego’s original concepts of the product. And about 28 minutes into the video, von Hippel goes into how user groups drove innovative design in the kite surfing market while putting their design innovations under a creative commons licensing scheme which hobbled manufacturers’ attempts to exploit these innovations. This video runs a little over one hour.

Innovation and design thinking

Empathy, collaboration, human centered feature/functionality, storytelling, and culture are themes that drive innovation through design thinking. Core phases of design thinking: inspiration, ideation, implementation.

On inspiration of ideas: use the world as a source for new ideas; focus on research that is ethnographic, anthropological, and qualitative versus just quantitative; focus on extreme users and strive to understand their world from cognitive and emotional levels.

On ideation: build things to learn about your ideas; rapid and low cost prototyping and iteration is key; prototyping allows you, as the designer/innovator, to get a sense of what you’ve learned and refine your ideas over time with stakeholder feedback driving the process.

On implementation: use storytelling and construct a story around the ideas you have, the more likely that your idea will make it out of R&D; a story frames the idea.

Culture ties together inspiration, ideation, implementation. Culture is its own inspiration.

This is a  fascinating lecture on innovation (57 min, well worth your time).

Innovation and the future of corporate R&D

This New York Times article on how corporations can foster innovation within their R&D departments by adopting decentralized (i.e., “federated”) approaches to funding and team structure, spurred me to conduct some research regarding this topic; here are two great finds:

TED conference speech by Charles Leadbeater on outside-in innovation and how this type of “innovation-in-use” phenomenon has profound impacts on business:

Research article discussing how universities can support and spur regional innovation; fascinating read on Georgia Tech’s success in this regard.

Related posts: Creating a culture of creativity and innovation, Innovation considerations for real estate firms

Interviews with innovative change artists

Data Visualization (32 minutes): Eric Rodenbeck, founder of Stamen, discusses how data visualization allows one to tease-out non-obvious yet meaningful observations from arcane data sets. The interview also includes a short discussion on how data visualization can enhance real estate search (around 16 minutes into the interview). Jon Udell’s series is awesome, which is where I found the Rodenbeck interview.

Clay Shirky on how social web platforms have the power to change history (~17 minutes): Shirky gave this speech in May 2009 and details how platforms like Twitter can enable social change, potentially even revolutionary change. Especially excellent points made regarding mass media asymmetry.

Kevin Rose, founder of Digg, interviews Trent Reznor (~45 minutes): Reznor gives some really great insights into the music industry and its nexus with “the Internet” while detailing his creative power struggles with record labels.

Crowdsourcing with Rob Hahn

Crowdsourcing is an important concept in the viability, pertinence, and relevancy of the social web.

A recent crowdsourcing search odyssey of mine (really a two hour drop down the Google search rabbit hole) began with a fairly innocuous @robhahn tweet:

I read recently that a 2-person combat team is four times as effective as a single shooter… anyone have any references to study of this?

This tweet intrigued me, as I thought it likely had something to do with Mr. Hahn’s insurgent marketing in real estate series. @PatrickHealy immediately stepped up to the plate:

@robhahn this should give you what you need: http://bit.ly/15eqQ4

Shortly thereafter I weighed in with this research article. But alas, Mr. Hahn was not satisfied:

@PatrickHealy close… but i’m looking for research showing 2 man team vs. 1 man ops

@ericbryn actually, wanted to see just how much more effective a 2-man fireteam is vs. solo shooter; maybe applies to agents…

Thus, inspired, I began a more substantive series of searches, which yielded these tasty tidbits, but nothing directly on point:

Discussion of information needs assessment and power of teams in edge organizations – Relevant to the insurgency series because the article discusses the shift from top-down command and control decision making to empowering teams and individuals to make relevant decisions based on timely and accurate information. Edge organizations promote a structure comprised of agile distributed networked units, which favors insurgent marketers.

How the information age has affected command decisions in USAF from Desert Storm to 2005 – Relevant to the insurgency series because the author analyzes the USAF shift from centralized to decentralized decision making. Decentralized decision making is key to enabling insurgent marketers to exploit the command and control decision making process that’s sometimes endemic with larger competitors.

Theories about net centric warfare – Relevant to the insurgency series because the article discusses how shared information resources contribute to cohesive mental models of the battlefield that results in increase combat effectiveness. Shared knowledge shared quickly enables insurgent marketers to exploit weaknesses in larger competitors’ information flow.

Discussion of basis for combat operations going to a STRYKER protocol – Relevant to the insurgency series because the report discusses how STRYKER forces are geared to respond anywhere in the world within 96 hours, stressing tactical mobility, lethality, and survivability. Insurgent marketers must strike quickly and with precision to weaken their competitors.

Uses of misinformation in war gaming operations – Relevant to the insurgency series because this article touches on how too much information causes humans to focus on the technical aspects of how the information is delivered rather than the context of the information and how this phenomenon leads to misinformation. An insurgent marketer can exploit this nuance in the sense of releasing highly relevant, highly targeted communications that are in direct contrast to a competitor that focuses on broadcast messaging. Here’s a nice quote from this article:

The gold lies in human thought—assisted by modern communication and computers, not distracted by them.

The reason why I’ve detailed this search odyssey is because I think it’s an interesting exercise in crowdsourcing and thought leadership. Mr. Hahn is a thought-leader in the real estate industry (recently securing a columnist slot within the Inman tribe). But this, in and of itself, is not enough to motivate me to spend a couple of hours helping Mr. Hahn. So what did? Yes my motivation was driven partly out of friendship. But it also has to do with sharing in the learning experience. That is, I enjoy the way he thinks through issues, the cogent arguments he makes for whatever position into which he plows his sword. Part of the way to enrich this experience–a more personal experience with his thought-leadership–is to participate in the germination of an idea. And that, I think, is at the heart of crowdsourcing–the act of helping give birth to a knew idea. The core of crowdsourcing is, essentially, the core of the social web: willingly sharing knowledge, participating in the expansion and distribution of this knowledge, and taking leaps forward together as change agents and innovation artists. Rob, happy reading.

Photo credit: rp72

Real estate industry innovation…some considerations

What is innovation? How does one recognize it? Will I know it when I see it?

Wikipedia says:

The term innovation means a new way of doing something. It may refer to incremental, radical, and revolutionary changes in thinking, products, processes, or organizations. A distinction is typically made between invention, an idea made manifest, and innovation, ideas applied successfully.

Here’s a Booz, Allen & Hamilton book review of “The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation” (Ikujiro Nonaka and Hirotaka Takeuchi, authors) that offers an interesting perspective:

The authors disapprove, for example, of the widespread American practice of benchmarking, in which companies keep a scorecard on their competitors’ business practices to stay a step or two ahead of them. This, the Japanese would say, leads to incremental improvement, not to true creativity or knowledge creation. In a Japanese company, knowledge is thought to be internally generated from basic principles laid out by top management, then improved on by brainstorming from within the ranks and finally some amount of feedback from external sources.

A U.S. use-case example of the above is the development of the 3M Post-it note:

The Minnesota Mining and Manufacturing Company…gives its researchers time to play around in the lab and then to “socialize” knowledge by using the office as a beta-testing site. Co-workers were skeptical when one researcher passed around his innovation, little pads of sticky-backed yellow paper. But the Post-it was the future, and it worked.

This line of reasoning resonates throughout Rob Hahn’s post insurgent marketing: as the main brand players in an industry focus on carpet bombing their competitors, insurgent type marketers exploit weaknesses. Similarly, Seth Godin touches on this concept when he references “heretical marketing.” Finally, Matthew Ferrara hits on this concept too.

Innovation cannot be trained, but it can be fostered in terms of firms encouraging the development of creative knowledge environments (the 3M example above is illustrative of this). What are you doing to foster innovation in your firm?

Photo credit: IH (40)

Reinvigorating MLS information

Let’s assume a situation where intellectual property and licensing issues are properly resolved and set with respect to granting outside developers access to MLS content and data.

If you’ve heard of an MLS (or a broker with a VOW) that has engaged a group of skilled programmers similar to what Washington D.C. did with its content and data, please let me know. Don’t you think something wonderful could happen with real estate search similar to what’s about to happen with bioinformatics?

Dialogue between bioinformaticists and semantic Web developers has been steadily increasing for a number of years now as widespread data integration problems have clearly begun to impede the progress of research.

This is not to say that challenges don’t exist,

[I]f you’re talking about traversing [information and data] computationally, then it’s much more challenging to make sure everything means the same thing and that the object that you’re getting to on the next path has the same persistence, quality, and structure that you’re expecting to operate on.

Nevertheless, the vision for a more collaborative and effective future is vibrant,

Ultimately, what the semantic Web community hopes to have are applications that will make the complexity of the technology as invisible as possible.

The real estate industry has an existing standardization body: RETS. It seems to me that an MLS (or broker VOW) could provide great value to its public and real estate industry stakeholders by adopting a RETS standard (thus, at some level, solving the data standardization issue raised above) while opening its data pantry to a group of developers, similar to what Washington D.C. did with its Apps for Democracy contest held last year (according to the Apps for Democracy website, the city realized a $2,300,000 value, not to mention the fact that the public now has some nifty tools),

The first-prize winner in the organization category was a site called D.C. Historic Tours, developed by Internet marketing company Boalt. The information about area attractions came from the city, but Boalt developers decided how to present it…The site uses Google Maps as the basis for enabling users to build their own walking tours of the city. It pulls information from Wikipedia, the Flickr photo-sharing service and a list of historic buildings.

Imagine a pool of widgets, desktop apps, apps for iPhone’s, Blackberries, etc, that slice and dice real estate content and data in novel ways. The public would obviously benefit by accessing real estate information in ways that are most meaningful to them. The content/data provider benefits by engaging the public at a deeper, more relevant, and effective manner. And real estate agents ultimately benefit because a more satisfied, more qualified, and more engaged buyer or seller equates to increased business opportunities.

Photo credits: ducks (SleepingBear), tightrope walker (tallkev)

List of social web resources 5-8-2009

Semantic coolness
I stumbled across the Semantic Interoperability of Metadata and Information in unLike Environments (SIMILE) program at MIT. Rather than try to summarize what they’re doing, here are some examples: Music Composer Research Database, click a composer’s name to see what happens; UK Traffic, click a blue dot on the map to see what happens.

Web 2.0 coolness
Excellent interviews of Tim O’Reilly by HubSpot CEO Brian Halligan. Discusses baseline concepts of what it means to “be Web 2.0”; change in thinking and corporate ethos and individual creed.

Art
Wonderful missive on the nexus between art and Web 2.0. I especially enjoyed the author’s discussion of what “avant-garde” means–as originally put forth in this essay–in the 21st century. Both are meaningful reads because each author broaches core issues relating to a wide cultural shift in collaboration across different societal strata.

Creating a culture of creativity and innovation

Real estate firms need to realign, indeed rethink, their team culture and structure to keep abreast of rapidly evolving marketplace and competitive pressures. I touched on this topic last week on the “Content is King” panel I shared with Mr. Hahn at Inman Connect NYC. I certainly share his sentiments regarding developing a content strategy. But to execute on such a strategy, firms need to delve deeper and essentially conduct a cultural/structural 365 degree analysis, with an overall goal of fostering “innovation” as a cultural norm.

After the panel presentation, I engaged in many conversations about how firms need to “innovate” and how the real estate industry needs to push for more “innovation”. Conversations generally whipped from how to create more innovative products and services, to how to be seen as more innovative by one’s customers, to how to “out-innovate” one’s competition. In my opinion, innovation begins with a culture that fosters unbridled creativity tempered by a disciplined development process–a thesis meeting its antithesis, if you will, to produce a synthesis (i.e., an innovation); similar to Eisenstein’s film theories explored in his books The Film Sense and Film Form.

With respect to innovative culture, the authors in “Climates and Cultures for Innovation and Creativity at Work” define the following factors as hallmarks for innovative firms:

  • High levels of interaction, discussion, and debate
  • Interpersonal and intergroup relations defined by trust, cooperation, and a sense of safety
  • Senior management that’s open to new ideas and improved ways of working, and proves its openness by encouraging such actions and funding them when meritorious
  • The organization is under strong external pressure

Creativity can be defined as

the ability to transcend traditional ideas, rules, patterns, relationships, or the like, and to create meaningful new ideas, forms, methods, interpretations, etc.; originality, progressiveness, or imagination – creativity. Dictionary.com. Dictionary.com Unabridged (v 1.1). Random House, Inc. http://dictionary.reference.com/browse/creativity (accessed: January 14, 2009).

Professor Jonathan Feinstein of Yale studies Creativity and has developed a great web-based resource on this topic.

I posit that fostering creativity is essential to competitive advantage. This thesis states that creativity is essential to the production of knowledge and its exploitation, and argues firms should create a creative knowledge environment (CKE). A CKE has the following salient attributes: clear objectives, positive group climate, active group participation, relatively flat hierarchical system, adequate resources, keen hiring decisions, engaged and visionary leadership; this definition aligns with the creative culture attributes outlined above. Both studies essentially conclude that such culture is essential to fostering innovation.

But once this culture produces an innovative thought, what framework induces it’s ultimate productization and monetization? It’s at this point where ultimate success or failure is determined. If such creative or innovative thoughts are always–or 80% of always–run through a control committee comprised of a “team” of senior managers, marketing types, IT types, and accounting types, chances are the innovative thought is squashed like an annoying bug as each “team member” sifts through respective intra-firm turf battles, alliances, resource jealousies, and personal fiefdom integrity and longevity issues. Countering this drying-like-cement-slow-death-approval-process, the set of authors above imply in their research that by hiring capable people who are naturally inclined to think through issues from all angles, management can relax a bit and “trust” their employee team to make the right decisions and manage the process themselves, which naturally leads to a culture of creativity and innovation. Peter Drucker touched on these themes and concepts. This is not to say that these “knowledge workers” should run amok, which is where disciplined development processes come into play.

There still needs to be strict adherence to processes that bring innovative products and services to market for the ultimate benefit of consumers. And in my opinion these processes are based on iterative design principles, or rapid application design principles, layered over agile stage-gate approval processes. Real estate firms that are hindered by stilted and overly obtuse ideation and development processes will suffer in the coming years; that is, firms that over analyze every move (or 80% of every move), allow poisonous turf battles between Marketing and IT to continue, and feel that nothing should be released to the public unless its “perfect” will suffer in the coming years. On the other hand, firms that realize that iterative design principles coupled with sound expected valuation analyses yielding rapid deployment and testing of prototype products (be they widgets, new website UI design, whatever) will benefit from the wisdom of crowds (see my earlier post on crowdsourcing) and release products and services that meet–and exceed–consumer needs and desires; which I’d say is innovative in its own right.

Innovation considerations for real estate firms

Real estate professionals looking for sources of inspiration should consider the following quip from the book Chasing Cool:

The next time someone says they want to be the iPod of their industry, ask them this: before he came up with the iPod, did Steve Jobs walk around telling people he wanted to be the Sony Walkman of his industry?

The Chasing Cool book goes on to explain that innovators have a knack at assessing where a potential market “is” and what this potential market wants or needs, even though this potential market may be incognizant of such, because innovators employ various forms of focus groups (from the traditional, to the mostly non-traditional) along with intuitive insights.

Following this thread, in the paper Permanently Beta: Responsive Organization in the Internet Era, researchers point out that continual testing is a way to gauge user feedback and gain invaluable break-throughs in product innovation (the development of Linux is an example of this). Nevertheless, this article (abstract) looked at software company start-up success and found that prolonged beta phases and collaborations with universities delay product launch but that team tenure and experience favor faster product development and launch. This finding corroborates a premise in Chasing Cool that looking within rather than without (i.e., consultants) often drives true insight and innovation.

What does this mean for real estate firms striving for innovation? Perform a 365 degree analysis on your team and products and services. Analyze your company through the eyes of a competitor to better understand your weaknesses. Quit strategically as Seth Godin admonishes in the book The Dip.