| Issue 62 |

Dealing with Extreme Ideas

The previous issue of this column presented how to gather ideas for extreme innovation. This time we will learn how to deal with such ideas, and realize their potential. If you recall, these are ideas that the organization is not equipped to handle. In fact, in many cases, it is disruptive innovation, which actually conflicts with the organization’s business model and strategy.

1. Examine the extreme idea for the long term, and check whether it indicates a significant growth direction.
2. If you have decided to support it – allocate time, budget, an appropriate team, and a separate framework for realizing this idea:
   • Time – Don’t expect immediate results. Plan for two to five years, and know that only after this period you will (maybe) start making a profit.
   • Budget – Allocate a flexible budget to your extreme idea that grows with time. Plan exit stations where you can check whether the business reality still suits this idea, and whether it is reasonable to continue.
   • Team – Appoint your best manager to this team, and make several dedicated employees available to him. It’s impossible to lead extreme innovation and overcome the organizational opposition and the difficulties in development and implementation, with a mediocre team.
   • Isolation – It’s best to set up a separate business unit (Limited company) for the team to demonstrate that it is a separate entity, which can overlook the existing procedures.
3. Protect the team setting up the initiative from the organization:
   • Give them a separate physical structure – preferably in a separate building and cut off from the rest f the organization.
   • Appoint a member of management that likes the idea, to whom the team leader exclusively reports.
   • Ask the team members to develop and implement a work plan, goals and schedule as they see fit, including shortcuts that are not accepted in the organization.
   • Let them manage their own budget together with the team leader, and not according to what is accepted in the organization.
4. The member of management to whom the team reports must make it clear that he gives them free reign, supports them and protects them, and asks them for three things in return:
   • A clear schedule and goals for the various actualization stages
   • An effort and commitment to lead the enterprise, and thus also the future of the organization
   • Complete transparency (including reporting bad news, which may lead to the enterprise being shut down).
5. Let the enterprise run according to the plan, vis-à-vis the member of management that they report to. Let the member of management approve the continued budgeting and the enterprise, without requiring the approval of the entire management.


6. Present the outcomes to management only when they are clear, meaning – only when it is obvious that the enterprise is on the way to success and can be leveraged, or that it has failed and must be shut down.
   
7. Remember – This is an extreme idea and disruptive innovation. It doesn’t always work. It’s OK to fail sometimes. But the chance of succeeding is much greater if you follow the above steps.

 

The IAI already is currently successfully selling its unmanned armored personnel carrier. General Electric turned GE Capital, the financing company that it founded, into its greatest source of growth. You can also realize extreme and disruptive ideas in your organization, but only if you protect them from the organization itself. Good luck!
 

• For articles on Systematic Innovation: click here.
• Information about Systematic Innovation workshops can be found here .

Strategy Checklist

Product strategy isn’t worth a dime if you don’t put it into action. In previous columns, I wrote about the various stages of developing a strategy. This time I want to give a checklist that will help us determine whether we understand enough about our strategy before we start implementing it.

We mainly have to check that we can answer the following four questions: 

1. What are we selling?
2. To whom are we selling it?
3. Why would they want to buy it?
4. Is it worthwhile for us to sell it?

We know that we have answered the first two questions if we can fill in the following blanks:
We sell <product> to <customers>.
The <product> enables <customers> to <what customers do with the product>.

After filling in the blanks above, we analyzed our market, our competitors’ markets, and target markets (using Porter’s models). We now know what environment we will have to work in. Moreover, we also know what the minimal price that we must ask for our product is, and maybe we also understand a little bit about the target price.
Now we can take everything we know, and conduct a summarizing analysis. It is very convenient to do this using a SWOT analysis (Strengths, Weaknesses, Threats and Opportunities), which I assume you are familiar with.

We should eventually be able to answer the third question, and fill in a few more blanks: 

If the product is a market-creating product, meaning if there are no similar products that compete with it, we need to complete one of the following sentences:

1. The product enables customers to earn money by …
2. The product saves customers money because…

Even if our product does not create a new market but rather joins an existing one, you need to be able to fill in the blanks. But then, you also need to complete one of the following sentences:

1. In contrast to the competitors, the product enables customers to earn more money because…
2. In contrast to the competitors, the product enables customers to save more money because…

You might say that people will buy our product because it’s beautiful, or cool, or has better architecture, or because we are nicer than the competition (and by the way, these are all things that I have heard from managers and entrepreneurs in industry).

So no. You want to earn money, and your customers want to earn money, and they won’t give you money only because you’re nice. This is a given for people that identify with the traditional financial school of thought that read this column. In high-tech, this rule is sometimes forgotten.

You need to quantify all the advantages of your product – to understand how much money they are worth to your customers. This is the only reason that they will buy the product – money.

Let me give you an example: I worked at a company whose product improved surfing speed in a cellular network. One of the ways to gain faster surfing time was to minimize the amount of data sent to the surfer. During that same period, the cellular operators (our customers) charged their surfers according to the amount of data that was sent to them. In other words, our product adversely affected our customers’ profitability.

However, we helped them understand that using our product would improve the quality of the service and increase the number of surfers that would use it. So ultimately, our product would enable them to increase their revenues. Otherwise, they wouldn’t have bought it, even if it improved the service to surfers.

And if we have made it this far, everything should fall into place: If we know how to quantify our product’s benefit, or its advantages in the market, we know exactly why people will buy it. We can use this knowledge in order to position and price our product.

We will discuss positioning and implementation at length in future columns. Pricing (which is also related to positioning) needs to help us answer the last question: Is it worthwhile for us to sell our product? The answer will not be absolute until we deal with positioning, with sales processes and with a few other trivialities, but if the answer is problematic, you should already be aware of it at this point
 

• The column was written by: Neta Weinrib, an expert on marketing technological products. Information about Neta appears here.
• More information about marketing assistance for technological products appears here.

Hard Core Fans!

 
Hard core fans may also accidentally harm the artist that they idolize.

This ad is for burn plasters, and gives an extreme example for the need for these plasters.

Burns are not nice, and most of us prefer not to think about them. And since we prefer not to think about burns, it’s hard to get our attention and sell us such plasters.

Similarly, we prefer not to think about death (and therefore it’s difficult to sell us life insurance), about serious illnesses (and it’s difficult to sell us supplementary health insurance), etc. We simply prefer to ignore unpleasant things, and therefore it’s difficult to talk to us about things that are related to these unpleasantries.

Since it’s difficult to present the topic (burns and products that treat them), you need an especially creative and interesting way to attract the attention of potential customers. A singer that dives into the crowd and onto the lighters of adoring fans – definitely does the trick, puts a smile on our face, and generates positive feelings about the product. Maybe we can also enjoy some stardust if we buy these plasters!
 

• We would be happy to receive more interesting advertisements Please send them to ari@zooz.co.il.
• Information about Creative Advertising workshops appears here (Page 18 of a Hebrew PDF booklet).