Innovation Methods PDF

Innovation methods You will learn a set of innovation practices that fit into a seven step innovation process supported by thinking and collaboration tools: Drives Guides Directs Diagnostics Mission statement Shapes Research Themes Drives Provides ideas for Concepts Prioritizes initiatives for Piloting and testing Sprint planning Six thinking tools Team harmony We are talking about practice 2 Team harmony Drives Guides Directs Diagnostics Mission statement Six thinking tools Team harmony Shapes Research Themes Drives Provides ideas for Concepts Prioritizes initiatives for Piloting and testing Sprint planning Creating team harmony Synopsis of approach – The team develops a social contract that guides how they work together, expectations, and sets up norms for collaboration and conflict resolution – The team agrees on an approach for having critical conversations throughout the project – The team adopts practices to ensure team harmony throughout the project (not just in the beginning) – This is done internally – but if the client team is a close partner they may be included Relevance to innovation projects Guidance – Innovation projects require teams, and require these teams to embark on an ambiguous and complex process. It is only natural for there to be work conflict, these practices ensure there is a pathway for conflict resolution. – Do this activity at the very beginning of the project and then revisit frequently, update when required. – Innovation requires input from a diverse team, these practices ensure that all voices are heard and can contribute in authentic ways. – Innovation requires teams to “go above and beyond”, these practices ensure the team is motivated to work at this level. – Do not rush or ignore this step, it will save you time and reduce frustration later. – Keep your social contract in a shared folder, make sure everyone has access to it. – Have critical conversations early and often – if ignore the underlying problems may become unfixable. 4 How to manage a fair process that creates team commitment, understanding, and harmony: Be… Transparent Do this: Start meetings with an open mind. Start meetings by outlining the process (how the meeting will proceed). Listen carefully as each member speaks, and ask clarifying questions. Encourage diverse points of view. Thank everyone for their input and advice. When a decision is made, explain the rationale for the final decision in great detail. Highlight similarities between all team member recommendations and the final decision. Process transparency Clear, explicit reasoning Clarity of role and impact Leading a fair process Not a fait accompli Be… Allow for minority POV Solicitous Active listening Appreciation What you should not do: Only allow your proposals to be stated at the beginning of the meeting. Interrupt the team members when they are talking. Try to prevent others from doing interrupting as well. Allow anyone to dominate the discussion 5 Create a social contract for your team: Rules Values Constraints What rules your team will operate by? Can include be on time, no phones during meetings, each deliverable has an owner, binding votes taken when we disagree *how we will resolve POVS. Define what is important and what matters to our team. These are shared beliefs that shape how we interact. This may be things like respect each other, producing high quality work, making sure all voices are heard Things to keep in mind that may influence project work and engagement. Could be: I am on the basketball team and need to travel from time to time. Or “I take care of my little brother and need to pick him up from school on Thursdays”. It is important to identify all constraints early so the team is aware. © 2022 ID Academy 6 Critical conversations: the EDIT framework Unless your project is unlike every other team project in history, you will need to have a critical conversation with a team member. This may be related to issues like coming late to meetings, not completing work, being disagreeable, and not listening to team members. If your team had created a social contract the conversation with the team member can be very structured, constructive, and build trust and collaboration. To help guide this conversation use the EDIT framework. Sometimes teams will say “we need to EDIT”. Edit stands for Empathy, Drivers, Interventions, and Transformation plan. It is a simple four step process that will guide your conversation. The goal is to make this feel normal, collaborative, and important. Once you and the other team members have determined this conversation is necessary, check in with the team member with whom you plan to have the critical conversation. Make sure now is a good time and they are ready to receive feedback: “Is now a good time to EDIT?” Remember, this tool should only be used for typical and common team issues. If the issue is related to something more sensitive, including but not limited to violence, mental health, shelter and food needs, sexual or any form a harassment, you should contact Public Safety and the Dean of Students. © 2022 ID Academy Empathy: Drivers: Interventions: Transformation plan: We fist want to find out, from them, what is happening. At this point we are not passing judgement, we are just trying to find the facts. You might start by saying… “We have observed you have not been following these parts of the social contract…. Can you help us understand what is going on?” Together, lets identify the factors shaping this situation. We should include things the team is doing, things you are doing, and even things that influence the situation but can’t be controlled. You may need to update the constraints and values part of the contract. Now lets outline, for each driver, an intervention that can help reduce or eliminate it’s influence. There should be shared responsibility and recognition there are some things we just can’t change. Add key actions to the social contract to codify the team’s response. What are the next steps? What checks and metrics should we put in place to make sure we are progressing? We need to be clear about responsibilities and what happens if we don’t stick to the plan. 7 Six thinking tools Drives Guides Directs Diagnostics Mission statement Six thinking tools Team harmony Shapes Research Themes Drives Provides ideas for Concepts Prioritizes initiatives for Piloting and testing Sprint planning Using the six thinking tools Synopsis of approach – The team uses the six thinking tools across all phases of the project. – The thinking tools represent commonly applied, powerful ways to address complex challenges and discover pathways out of confusion. – There are no specific rules about when to use and when not to use. They are generally helpful and as you gain experience you will begin to see more areas where they fit in. – These tools underly almost everything we do in design, mastering them is a critical step in becoming a design leader and an innovator. Relevance to innovation projects Guidance – This set of tools has been specifically developed and calibrated to enable the successful completion of innovation projects. – Over time you will naturally and intuitively apply these tools to help navigate challenging projects. To achieve this level of comfort with the tools begin by intentionally trying them at different points in the project, observe their effectiveness (or lack of). – Innovation projects are not linear, thus the tools can be used in various combinations and at different points of the process. – The tools are focused on helping y0u find novel structures and ideas: the core challenge of innovation. – Everyone uses these tools slightly differently, expect them to develop as part of your tradecraft. – Discuss with your team what tools you are using, try different approaches. 9 Abstraction ladder Problem to solve Issue to interrogate Abstract category to explore Abstract category: Mobility More freedom to innovate but no clear starting place (or ending place) Broad activity: Air travel Discreet activity: The check-in experience As a user, I want to add my frequent flier number after check-in © 2022 ID Academy Clear direction but limited space to innovate 10 Decomposition & Synthesis Decomposition First, work top down, break the system down into constituent components. Once completed, the framework is an organized set of prompts and can help you form a broad research plan or identify areas to investigate. Synthesis Second, work bottom up, re-clustering insights from research (that was directed by your initial framework). Use the new structure as specifications for the new system design. © 2022 ID Academy Good themes or clusters are written as headlines: Active Emotionally rich Concise and specific More than one word For example: Hercules slays Hydra Your clusters should be MECE, or Mutually Exclusive and Collectively Exhaustive. Collectively exhaustive means that you are not missing any key elements – in other words, all of the key facts and intelligence fit into one of your clusters. Mutually exclusive means that each of the clusters is distinctive and has clear boundaries. You do not want all of the clusters to be variations on one theme. If there is too much overlap with your clusters the thinking will seem (and be) sloppy and unclear. There should be a counter-argument against each cluster headline. Your clusters should take a stand, share a point of view, make a contention. Headlines like “Innovation” are value free and therefor do not incite action (in design we want our work to incite action). “Our pace of innovation is slower than our competitors” is a good headline that takes a position, and someone might argue against it. 11 Problem structuring Start by identifying: Cui Bono Who benefits from the status quo? Influencers Accepted narratives What do stakeholders suggest are the possible / likely drivers But then… Only state what you know to be true. Organize your data using the structure to the right. You can create multiple candidate drivers. Project can be centered around investigating the drivers. © 2022 ID Academy Outcomes Challenge for cashiers to work register AND stock Inaccurate counts No direct link between product and POG location Overall poor shopability Follow the power (or money) How does money flow (this is even more important in non-profits and governments)? Where is power centered in the system? Problem driver Mis-stocking Hard to differentiate products Product in flex confuses or is not seen by customers Pushers are frustrating to fill Clutter on shelves Problem influencers: also mistaken as “problems”, influencers can be thought of as “sub-problems”, which, when taken as a set, lead to the larger problem. Generally, influencers are insights about the current process or people related to the problem. When solving the problem, the team should think about how to eliminate or leverage these influencers. Problem drivers: this is the core of the problem, and what the solution should be built around. Rarely are the actual drivers initially articulated (it is much easier to identify influencers and outcomes). The team needs to synthesize these drivers from the organization of the outcomes and influencers. Problem outcomes: often mistaken as a “problem”, outcomes are fact based statistics, measurements, and observations related to the impact of the problem. Identifying and collected these “outcomes” helps demonstrate the scope and magnitude of the problem, and can provide a set of measures for assessing the success of future solutions. Reframing Common ways to reframe: This… not that From…. To We used to think, but now we believe… The opposite is actually true… The meaning of has changed The problem is bigger than you think The problem is smaller than you think You are using the wrong © 2022 ID Academy 13 Mysteries versus puzzles Mysteries Have many possible answers, each with trade offs May grow more complex with every new piece of information – may be too much information Requires judgements and assessments of uncertainty Cannot be solved by solely optimizing existing practices Focus on solving social and technical complexity Examples: Get people to take a vaccine Change the structure of a university © 2022 ID Academy Puzzles Have a specific, factual answer Grow simpler with every new piece of information Can come to a satisfying conclusion Focus on optimization of existing practices Focus on solving technical complexity Develop a vaccine Eliminate redundancy of consultants 14 Punk rock versus baseball: Vs. 15 Organizational diagnostics Drives Guides Directs Diagnostics Mission statement Six thinking tools Team harmony Shapes Research Themes Drives Provides ideas for Concepts Prioritizes initiatives for Piloting and testing Sprint planning Innovation diagnostics for your client / partner Synopsis of approach – The team completes the three diagnostics in partnership with the client. – The first two diagnostics (operating system and degrees of innovation) can be completed as conversations or meetings with the client teams. Simply ask the questions and discuss the answers. Capture and share all of their notes and insights. – The last diagnostic, the database, requires you to request, structure, and present information from the client. This may take a few weeks to gather all of the data. Be sure to share the result with them, it will be valuable beyond this specific project. Relevance to innovation projects Guidance – Diagnostics help you understand if your project based on a momentum strategy (follows and flows the dominant approach of the organization) or an intervention strategy (disrupts and requires shifts in behavior)? – You may not get answers for all of the questions. Finish what you can, but do not force any analysis. If the client is uncomfortable sharing the information do not push them. – Helps you understand the barriers and accelerants to your success. What needs to change in order for our project to succeed? Or, how will we need to adapt our project to fit into the current approach, ensuring adoption? – Do this early in a project. You may first need to establish trust with the client before you ask some of the more sensitive questions. – Like many things, the conversation is often more valuable than the deliverable you create. 17 Understanding degrees of innovation: NEW Disruptive (horizon 3) Description: Discussion questions: Can transform an industry and organization Can be very risky to implement Timing and value can be hard to calculate Can represent a big bet for an organization, Historically, what degrees has the organization been focused on? What is their current mix (percentage of total innovation activity spent on each degree?) Who is responsible for each degree in the organization? How do these entities or individuals coordinate? What are example innovations for each of the degrees (both by the organization and their competitors?) What do their investors, board, and the industry expect from them; what mix of degrees of innovation are they expecting? Where is most of the activity in their industry, their do our competitors focus? Where are the disruptive innovations in the industry coming from? but also can create a large payoff ADJACENT Sustaining (horizon 2) implement (can require behavior change and business model change) Potential to create long term, sustained value If given the right time and resources can provide a “big win” for the organization Clear and well known pathway to EXISTING Markets More socially and technically complex to implementation Risks can be managed, chances of success can be calculated Is the lifeblood of organizations, generally 75% of innovation efforts should be focused here Incremental (horizon 1) EXISTING INCREMENTAL NEW Offerings 18 A diagnostic of the organization’s innovation operating model can reveal areas of opportunity and areas of risk: Generating and sourcing Does the organization have robust processes to generate ideas internally? Does the organization have robust processes for sourcing ideas from external sources like partners, vendors, universities, and start ups / new ventures? Does the organization have mechanisms to control who is involved in idea generation, how idea generation is guided and managed, and how quality / volume is assessed? Does the organization have a clear and usable process for prioritizing ideas and converting them into funded / supported initiatives? Developing and implementing Does the organization use processes appropriate for different levels of innovation / ambition? Are their processes flexible enough to accommodate all degrees of innovation projects? Are stakeholders and stakeholder requirements included in key phases of development? How are they engaged? Is there a process for ensuring that high potential innovation projects receive the funding and resourcing (especially talent) that they need? Is there a robust process for testing and learning (where components are allowed to fail in order to be improved) as part of the implementation process? Idea Rich Use this framework to guide conversations with your client / partner at the beginning of the project. The goal is to identify where they have strong innovation habits and tradecraft and where they are weak. It is not usually your job to fix everything, instead this diagnostic will help determine what strengths you may leverage and what deficiencies you may need to design around. At its core this diagnostic will tell you if the organization is idea rich or idea poor, and if they are capable of developing and launching innovations. Idea poor Skilled implementors Troubled implementors Launching and scaling Does the organization have a way to accurately price (or value) the innovations to ensure economic sustainability and profitability? Does the organization have methods and processes for selecting and prioritizing markets / global regions? Does the organization have the appropriate channels and communication strategies to ensure that stakeholders are aware of and can access the innovations? Does the organization have appropriate risk management and institutional control? Can the organization support the roll our and scaling of the innovations? Managing an innovation portfolio Does the organization actively manage their innovation efforts as a portfolio, balancing risk/reward, different degrees and types, and across different stakeholder groups? Is there a way for stakeholders to provide feedback and get involved in decision making? Is the portfolio guided by an innovation strategy that is linked to strategic goals and the organization’s mission? 19 Create a database of current innovation projects in the pipeline: Build a list of the active innovation projects at the organization. This can help you understand the composition of their current portfolio, highlight priorities, and help you understand the internal innovation ecosystem and culture at the organization. This is a nearly impossible job at large organizations: even if you cannot produce a complete list it is import to at least document as many projects as possible. This can help you understand what gets funded, how ideas move through the pipeline, key stakeholders, and projects you might collaborate with (collaborating with existing projects can help increase your odds of success). Key elements of the database: Project Name: The name of the project. May be an internal name / code name. Internal or external: Is this project internal (for employees or close associates of the organization) or for external audiences. Owners and stakeholders: Who are the key stakeholders in the project? Who is driving the project? Where does it live in the organization? Brief description: A quick description of the project. Who is it for and what are they trying to achieve? Stage of development: Often based on their development process. You should know the key stages after finishing your analysis of the innovation operating model. Size and scale: This can be relative to their organization: is this a big or little investment for them? What is the expected value / size of the prize? Degree of innovation: Is the project likely to produce incremental, sustaining, or disruptive innovation? Expected launch date: When they expect to launch the concept or solution. Relevance to our project: Are there opportunities for collaboration, what can we learn from them, do we need to keep the, informed on our progress? Creating this database can be time consuming but it will help you understand the innovation landscape of the organization you are working with. If they are unable to help you produce this analysis… you may be working with an organization very new to innovation or one that is not managing the capability very effectively. 20 Template for innovation project landscape: Project Name: Brief description: Internal or external: Stage of development: Expected launch date: Owners and stakeholders: Size and scale: Relevance to our project: Degree of innovation: Runway 606 A six year program where CPS student go from HS to an MS / CCC also a partner External Pilot Fall 2023 IIT president CPS CEO Large project, large investment for the school NA Disruptive innovation 21 Aspiration: innovation mission statement Drives Guides Directs Diagnostics Mission statement Six thinking tools Team harmony Shapes Research Themes Drives Provides ideas for Concepts Prioritizes initiatives for Piloting and testing Sprint planning Authoring an innovation mission statement Synopsis of approach – The team develops an Inspiring innovation mission statement that links the work to the corporate mission and strategy – Should include a measurable stretch goal against which the organization must deliver – The resulting statement becomes a north star for the project – the team should internalize the intent of the statement and use it as a guide for project work – This should be an iterative process with the client. Identify a variety of candidate statements, select the one most aligned with their ambition, expectations, and interests. Relevance to innovation projects Guidance – This activity helps the team author a single, clear vision statement for the project. – Do this activity at this stage of the project: you know enough to create a valid statement but have not committed to a specific direction – Good vision statements make it clear what you should do and what you SHOULD NOT do. – Puts a steak in the ground so you can move forward and articulate the ideal future state – Provides criteria for future project decision making – Do not make the statement a variety of strategies connected by the word and… be sure the statement is a single clear direction – Good missions are controversial, if you cannot argue against the vision it likely is not specific or clear enough 23 You may take one of three directions when authoring your mission statement: Direction: Description: Reframe direction Make a statement about what new kinds of products and services will deliver compared to current efforts. Innovation will move us from an academic institution to a digital research organization (Leading Cancer Center) Bring out importance of innovation in shaping the future of the organization. D4D (Intuit's innovation program) is our #1 secret weapon at Intuit. There is not #2. (Scott Cook, founder of Intuit) Prioritize innovation Customer mantra An inspiring rallying cry grounded in innovation that will positively change the customer experience and livelihood. Example: We will eliminate the love loss in weight loss (Purina division focused on pet health) 24 You can use the following process to help identify the appropriate ambition level. Start by understanding the ”growth headroom” in the industry: How much room for growth is there in our industry, sector, or arena? High potential Analysts predict 5+ years of double digit growth Bio tech Crypto Industry stocks have high PE ratios Industry has high WACC Moderate potential Analysts predict 5+ years of single digit growth Industry stocks PE ratios vary above and below average Health care / pharma Electric car manufactures Industry has normal WACC Low growth / no growth Analysts predict little or negative growth Newspapers Industry stocks PE ratios below average Traditional insurance Industry WACC varies 25 The next step for identifying an innovation ambition level is understanding the current position of the company or business unit: Journeymen Contenders Champions Little market share or competitive advantage Significant share or competitive position Limited distribution / market access Adequate distribution / market access Highest market share or protected, unique competitive position Low brand awareness Known brands Best distribution / market access LOVED brands Number of companies Industry position 26 The final step for identifying an innovation ambition level is finding your position on the ambition matrix and using this position to guide your statement: High growth Moderate growth Low / no growth Achieve parity Play the game better Play the game better Achieve parity Play the game better Play the game better Change the game Change the game Achieve parity Journeymen Contender Champions Change the game: this is the highest ambition level. Statements often include words like disrupt, shift, change. If you are successful you will be redefining an entire industry or ecosystem. Play the game better: in this level of ambition you are focused on renewal and renovation (don’t knock the building down, improve it…) Statements include words like transform, adapt, lead. If successful you will be redefining what it means to win in an industry. Achieve parity: in this level of ambition you are trying to become competitive, an active player in the industry. Statements include words like improve, become, and reach. If successful you will be seen as a serious competitor in the industry. 27 Principles for good innovation missions / possible failure modes The following design principles: Statement should be aligned with the appropriate innovation horizon (1: incremental, 2: sustaining, 3: disruptive). Statement should be approved by a leader that has the ability to make decision without them being overturned. Obtain a perspective on how much growth innovation can likely contribute – Analyze the company’s historic performance – Understand the industry/category historic innovation performance – Value identified innovation opportunities Should be aligned with internal and external expectations for the project. Should balance articulating an ambitious stretch with realistic expectations about what is possible with current resources and timing. Should be aligned with the organization’s mission, or (if horizon 3) intentionally conflicting with the mission. Should be crafted with senior leadership reflecting their vision, intentions, and strategy. Should be distributed to all key stakeholders for review and approval. Can help you avoid the following errors: Problem scope Is it too narrow? Solution orientation Is it too specific? Project based on single data point Project is about “fighting fires” no creation Leadership notes “I know there is something bigger but…” Organization already has a solution in mind Direction suggests a routine solution but not a routine problem Seems to be based on an idea that already exists at the organization Alignment No one at the organization agrees on project direction Is it poorly defined? Organization has too many meetings Unclear who the stakeholders or users are 28 Innovation Research Drives Guides Directs Diagnostics Mission statement Six thinking tools Team harmony Shapes Research Themes Drives Provides ideas for Concepts Prioritizes initiatives for Piloting and testing Sprint planning Innovation research Synopsis of approach – Unlike the highly focused, often hypothesis drive research conducted in UX or service design projects, innovation research is intentionally broad and you should expect to go down some paths that do not yield useful data for the project; when exploring expect to run into some dead ends. – The team will conduct research in six areas. This phase may last between one week to several months. It is an exercise in discovery, these are higher risk research methods (meaning that if you find an insight it may be a breakthrough, but you are also likely to spend time on research areas that do not “bear fruit”. – The team will produce an “insight book” as the result of this process. This book will document the results of each of your six research methods and be structured in a way to drive theme and concept development. Relevance to innovation projects Guidance – The results of this phase, the insight book, provides direction, inspiration, and context required to develop substantial innovation projects. – It is important to go in different directions and try out research themes. As noted this can be risky so enforce a time limit on activities and analyze / document as you go (so you can get a sense of what is working and what is not, and create assets throughout the research) – The research is holistic, it looks at stakeholders, technology, and industries through a variety of lenses to ensure you do not fall victim to “failure of the imagination”. – The insight book, once complete, can be used on any number of projects and initiatives, it is evergreen. – Include a broad and diverse team for the research, involve the client / partner whenever appropriate. 30 Case studies (reasoning by analogy) Capabilities Take a new, customercentered view of the industry Discontinuities Orthodoxies Layers and Links 31 Case studies: reasoning by analogy Synopsis of approach – Abstract the problem, and then determine how other organizations have solved a similar type of problem – Conduct research on each of these organizations / problems – Create a causal logic map for the solution, and identify what, if anything, is relevant to the problem at hand – Document and synthesize your findings into a set of case studies – Find case studies that are near (similar industry) and far (very different industries and customers) Relevance to innovation projects Guidance – Helps the team to reason by analogy – Although this approach can be accomplished using secondary research or phone calls, it is more effective to actually visit the organization – Creates a playbook of possible options that have worked in other industries – Use case studies to guide workshops, as inputs to innovation themes, and to create possible solutions. – Create a structure for authoring the case studies so team members can develop separate case studies that are modular and parallel in analysis – Conduct at least 10 case studies 32 Case studies: reasoning by analogy For step 1: define your target problem: o What is the causal logic of our problem, or the chain of cause and effect that explains the dimensions of the problem. For step 2, define the source problem of the analogy: o How have others in our industry solved this problem? o How have others outside of our industry solved problems like this on (problem type)? o How has this problem been solved in other regions and cultures? o How has this problem been solved in the distant past? Target problem Source problem Target solution Source solution For step 4 define the target solution: o How will the solution work in the new environment? o What adjustments (for glaring differences do we need to make?) o How can we fine tune the solution using market feedback? For step 3, Define the source solution of the analogy: o Why did it solve the problem? Again, look for the solution logic, or the chain of cause and effect that explained why this solution worked (or failed). Use frameworks to help unpack the analogy, like the 10 types, Porters Five Forces, AEIOU, the human factors. o Are the cases related in more than a superficial way? o How similar are the causal logics? 33 Case studies: example In the example below we were working on a project to develop solutions for hiring at a tech company. They had many candidates but their traditional selection process did not always result in a good fit. We looked at other organizations that had solved that KIND of problem before. Here we are showing one of our case studies: how students are selected at Carnegie Melon. This was one of many case studies that helped us understand the range of tested, working best practices. Target problem (what we are trying to solve): finding the right person for a job opening Causal logic: Lots of applicants for each position Some overstating of qualifications Complex, unstructured inputs Storytelling is hard to share Bias in algorithm, algorithm can be fooled Target solution (best practice we can build on): New ideas for candidate searching: Solution logic: Common job application Create objective tests for applicants Track engagement (how engaged are they on our site, with activities) Deadlines for submittal Recommendation letter (process and structure for) Source problem (what we are trying to solve): Admitting students to highly selective university: Target problem Target solution Source problem Source solution Causal logic: Many more applicants than seats Grade inflation and resume inflation Complex, unstructured inputs Storytelling is hard to share Bias in algorithm, algorithm can be fooled Source solution (best practice we can build on): Admissions process at CMU: Solution logic: Combination of human / AI selection Common application Tests / scoring Track engagement (how engaged are they on our site, with activities) Alumni interviews Deadlines for submittal Recommendation letter (process and structure for) 34 Case studies: example The example below is from a project where we were helping a client decide if new services should be centralized or decentralized. We completed 12 case studies. The case study example is an analysis of Cisco – how they manage both centralized and decentralized services. You should create a structure like this to analyze and document your case studies. You can see how the team outlined the causal logic (why we chose it) and the solution logic (the second page). 35 Case studies (reasoning by analogy) Capabilities Take a new, customercentered view of the industry Discontinuities Orthodoxies Layers and Links 36 Capabilities Synopsis of approach – Helps the team… understand an organization’s capabilities. It helps the organization articulate what they think are their critical activities; this is important for design since our solutions must support and enhance these capabilities. – Identify the key strengths of the company (ask: what do we do that makes us indispensable to our customers?). You should identify 20+ strengths. Use the capability framework to ensure thoroughness. – From the list you generated, identify the most “core” or critical capabilities using the following criteria: The organization has a real, measurable advantage with this activity / The capability can be improved and widened in the future / The activity is broadly relevant across the business. Relevance to innovation projects Guidance – Building solutions on existing capabilities can increase release tempo (speed to market) – Remember: capacities go home at night, capabilities stay. A capability is more than the skills and knowledge of one person – Can help identify new capabilities required to implement proposed solution (gaps between existing capabilities and capabilities required for proposed solutions) – Use the provided worksheets to run a work session with the client, generating capabilities can be a positive, fun experience for the client – Can help you create a refined, deep understanding of how the client views their business’s strategy, strengths and weaknesses – More than 10 capabilities may be too many – Ask the client: what new opportunities can be unlocked by leveraging this capability 37 The second level, capabilities, require us to understand what makes us distinctive: An organization’s capabilities fit into four categories: Skills Specific capabilities can be identified using the following exercise: Growth Sustaining Assets Physical Digital Capabilities Why are we indispensable to our clients? What do we provide that creates this value? How do we deliver this value? Focus on value and benefits delivered. Offerings and strategies that deliver the value. We deliver these offerings and strategies through… McDonald’s example: enable calm (relatively), happy kids McDonald’s example: McDonald’s example: University example: provide a degree that can get you a job Happy meals Play-places Consistent offerings Many locations (there when you need us) Partnership with Disney Customer research Real estate strategy Franchise system University example: University example: Relationships Influence Access Programs with robust curriculum and assessment Credentialing Accreditation HLC accreditation process Managing compliance across difference colleges Program development and continuous improvement These are your capabilities Knowledge Protected Latent 38 © 2021 - Illinois Institute of Technology - Confidential Capabilities worksheet: Why are we indispensable to our clients? What do we provide that creates this value? How do we deliver this value? (your capabilities) Focus on value and benefits delivered. Offerings and strategies that deliver the value. We deliver these offerings and strategies through… Text goes here Text goes here Text goes here 39 Case studies (reasoning by analogy) Capabilities Take a new, customercentered view of the industry Discontinuities Orthodoxies Layers and Links 40 Orthodoxies Synopsis of approach – Identify the orthodoxies of an organization and industry – Determine which orthodoxies can be challenged and which ones should not be challenged – It is said again on the next page, but orthodoxies are the (often unwritten) beliefs about what makes you successful that if left unchecked blind you to new opportunities. Identifying and flipping orthodoxies can lead to disruptions in the market and lasting competitive advantages. – It is important to understand the dominant, collective logic – this allows you to either challenge or leverage it when developing new offerings. Relevance to innovation projects Guidance – Most great innovations challenged the existing orthodoxies of an industry – Include orthodoxy discussions at the beginning of a project - keep a running list as research progresses – To break the rules, you often need to know the rules – This method aligns with the common strategy “turn constraints into features”. Sometimes the rules we work under can lead to new ideas and innovation. The objective is not to ignore constraints but rather find novel and orthodoxy-busting alternatives that flip them into features. – This exercise can feel complex and challenging to clients. Only run with client teams that are experienced with innovation practices and have demonstrated critical thinking abilities 41 The flipping orthodoxy method helps organization identify and break rules that are limiting their operations and strategy Overview: Examples: Exercise: Orthodoxies are the (often unwritten) beliefs about what makes you successful that if left unchecked blind you to new opportunities. Identifying and flipping orthodoxies can lead to disruptions in the market and lasting competitive advantages. Orthodoxy in banking: People will only trust banking at a physical branch with a banker. Orthodoxy flip: ATMs, and then later app based services Pick an organization in a different industry that you respect and understand. In design we often say “break the rules, but break them well”. In this method we are trying to find the rules of an industry or a company we can break in order to create or unlock value. You will not get an accurate response if you simply ask people “what are your orthodoxies”. Since these beliefs are so embedded they may not be apparent. The exercise we have developed uses the “make it someone else’s problem” approach. We allow people to change their business or organization by using the lens of another organization which helps unearth the (often hidden or assumed) beliefs. The team from John Deere selected Google. Orthodoxy in higher ed: people can only learn in a classroom setting listening to long lectures Orthodoxy flip: asynchronous online courses Orthodoxy in air travel: to be successful you need multiple cabin classes; the only way to be efficient is a hub and spoke model Orthodoxy flip: Southwest had one class of service and runs a point to point network The George Costanza school of design: do the opposite. Season 5, episode 22 © 2022 ID Academy George Costanza was a character on the American sitcom “Sienfeld”. He realizes that “every intuition I have ever had was wrong” and decides he will start doing the opposite of what he normally would do. Because he flips his orthodoxies he suddenly becomes successful. Imagine that they have acquired you (however unlikely). What changes would they make, and why would they make them? Google would transform Deere into a data company What underlying rules / beliefs / policies / misconceptions were driving or responsible for shaping the things that they would change? (these are your orthodoxies) We build machines and tractors, data is secondary If you were to flip these orthodoxies, what new ideas and solutions would result? These may be similar to what you identified in step 2, but be feasible and implementable under current operations. A new business unit that uses AI to evaluate data generated by tractors to help improve operational efficiencies for customers 42 Orthodoxy worksheet : Step 1: Pick an organization in a different industry that you respect and understand: Step 2: Imagine that they have acquired you (however unlikely). What changes would they make? © 2022 ID Academy You are not limited to these options, but people often pick… Step 4: Why would they make these changes? What is the opportunity / value they will unlock? Step 4: What underlying rules / beliefs / policies / misconceptions would have made it difficult for us to make these changes? (these are your orthodoxies) 43 Case studies (reasoning by analogy) Capabilities Take a new, customercentered view of the industry Discontinuities Orthodoxies Layers and Links 44 Take a new customer-centered view of the industry: Synopsis of approach – Develop a new understanding of user needs through a combination of the following methods: Behavioral modes Extreme users Non users 5E Relevance to innovation projects Guidance – Focuses design work on behaviors and preferences, not demographics; nonconventional and more nuanced ways to define and understand customers. – Use more than one of the frameworks – Provides a broad frame for design (focus on a system, not a single activity). – Iterate: create an initial hypothesis based on speculation, conduct research, and revise. This can help you save time and identify the frameworks most likely to yield insight on your project – Avoids the trap of “we already knew that, that is not new” – The more specific and primary your research the more rich and useful your insights – Helps find unexploited and underserved areas of the market – This section assumes you can conduct primary and secondary research 45 Behavioral modes: Why behavioural modes are useful on an innovation project: They describe how people behave at a certain point in time, they do not describe the person They provide meaningful data for design (you would rather know how someone wants something (mode) as opposed to where they live (demographics) The define larger opportunity areas - using principles of universal design How to create a behavioural modes map: 1. Define many possible continua, starting with “what do they want” and “how do they want it”. Also include engagement, level of knowledge, and so on. 2. Try different combinations of continua to create a map. Start with the “most opposite”. 3. Plot candidate modes on the map - assess how well the map deals with these modes. An ok map will just plot them all. A good map will add detail and complexity to the definitions. A poor map will not allow all modes to be included. 4. Rename the behavioral modes based on their position in the map. 5. Remember, this is NOT to suggest that these modes proven. You use these modes to help define a research plan and validate using quantitative methods when required. The example map to the left outlines behavioral modes of patients seeking cancer care: their mode changes depending on the stage of care and their experience. And I am not sure why “behavior” is spelled in British English above. Sorry. © 2022 ID Academy 46 Behavioral modes: O’Hare airport example Lots of time From: What do I do now? Get me to my gate Unexpected As planned Entertain me Help! A global airport for the 21st century To: A curated Chicago experience for the traveler Little time Source: Student project Fall 2008: Korel, Lin, Lindholm, Verma © 2022 ID Academy 47 The other One side The other One side The other One side The other One side The other One side The other One side The other One side The other One side The other One side The other One side The other text One side Name Name Name Name text © 2022 ID Academy Ray Name Name text text The other text text One side Polar text text 1. Define many possible continua as possible. Try binary (either one or the other), polar (a range from one side to the other), and ray (starts at 0 and builds) Binary text Behavioral modes worksheet 2. Try different combinations of continua to create a map. Create as many as possible. Try using all three map conventions and determine which configuration provides the most insight: Name Name text text text text 3. Draw your final map. 48 Extreme users: Most organizations focus on “typical” or “average” users when developing new products, services, and offerings. This is low risk (they are focused on a well defined and familiar market) but also low insight and inspiration (most needs are already known, audience is not always passionate about topic area). Famous examples of products developed using the extreme user methodology: Many successful products and services have been created by developing insights from insights from companies, organizations, and individuals that have needs on the “extreme” and are well ahead of market trends. In many cases these extreme users have already prototyped a solution that solves for their unique needs; this solution can be democratized to suit a larger audience (e.g. and airline pilot invented the roll-aboard bag). Needs of extreme users are so advanced and beyond those of the average user that they are often forced to create coping strategies to their problems – thus highlighting opportunities for innovation. The needs of extreme users are… extreme and thus often easier to observe and document compared to average users. They are often more aware of and can articulate their needs more accurately since they encounter them more frequently or significantly. The process should rely heavily on co-design, engaging the Liquid paper was developed by an executive assistant that needed to make many corrections to typed and handwritten documents. It was useful to anyone that needed to make corrections. Gatorade was developed for the University of Florida football team (the Gators). They practice in an area called the “swamp” and had an extreme need to replenish electrolytes. The roll-aboard bag was developed by a pilot that grew tired of carrying luggage everywhere. The original prototype was a duffle back, plywood board, wheels, and a handle. extreme users to understand their needs and how they have crafted / cobbled together their solutions outside of existing market offerings. © 2022 ID Academy 49 Extreme users template: Who are the lead / extreme users in this market? What are their coping strategies? How might these strategies be democratized? Examples: Airlines: pilots (they fly every day) Computer peripherals: designers (use multiple) Examples: Pilots: duffle bag with wheels and collapsible handle Computer peripherals: bring mouse with them in their bag Examples: Samsonite: roll aboard bag Microsoft: collapsible mouse the fits flat in a bag 50 There are overlaps between this practice and the extreme user practice. For example, for years I coached Matt Chao, an Olympic champion sailor who is blind. He was originally a non-user of sailing, but he created a set of solutions that allowed him to sail competitively. Specifically, some of the coaching techniques developed as part of his para-Olympic campaign are now used for coaching all sailors. Understanding non-users: It can be helpful to understand why people can’t and won’t engage with and use existing systems and offerings. It is often due to organization errors of commission (things they are doing wrong) and omission (things they are not doing). By understanding WHY non-users avoid the system / offerings we can develop ways that make it possible for them to engage, and often these solutions are beneficial to all users and stakeholders. Our world is often designed for the *mythical* ”average user”, often failing to understand or be compatible with the wide range of abilities outside of what is considered “average”. Outcome of misalignment: Can’t I only speak Spanish and all of your communications are in English Won’t I am bilingual, but since Spanish is my main language and you only use English I do not feel valued Misalignment between a person’s strengths and abilities and the… Misalignment between a person’s values / beliefs, comfort level, preferences and the… Can’t refers to misalignments where it is impossible or so onerous it must be avoided. Won’t refers to misalignments where the person wouldn’t even if they could. © 2022 ID Academy Analysis to be completed: Driver of the barriers: Description: Physical requirements Cognitive requirements Emotional requirements Emotional factors Social factors Cultural factors Example of misalignment: wheel chairs are quite well suited to move smoothly on flat surfaces (unique ability) but cannot go up curbs. What are the barriers? How might we eliminate or reduce? What are the errors of omission and commission that are causing this misalignment? A requirement is something that must be done or satisfied in order to access a system. Factors influence and shape how the system is experienced. Unifying design question: How might we redesign the system so it works for them (this non-user specifically)? Implications for solution: What should be implemented to ensure this user can engage? What elements of this redesign would be beneficial to all? We have emotion in both categories. There are certain systems with significant emotional requirements that can prevent people from accessing and using them. 51 Non-users template: What users cannot access our industry / services? What interventions would enable access? How might these strategies be good for all (design for one extend to all) Examples: Kitchen tools: arthritis limits use of can openers Sidewalks: wheelchairs can’t go up / down curbs Examples: Kitchen tools: add padding and make handles larger Sidewalks: ramps at every corner Examples: Good grips: can opener that is easier for all to use Sidewalks: ramps good for all, including people with luggage 52 Understanding experiences: 5E + MOT or Peak / end The 5E framework may be one of the most used frameworks in all of design thinking. The framework helps you break down and analyze existing experiences. Entice Enter Engage Exit What do people do during the experience? How does the experience end? 5Es helps to generate a set of insights across the user’s experience. By breaking down and analyzing a user experience into smaller, chronological steps it helps to identify more opportunity areas that would not have been as evident with a broader approach. What draws people in to an experience? We can turbo boost the value of a 5E framework by overlaying two well known, related theories about experience and meaning: By this point hopefully you know the 5 E framework… What are the moments of truth? Zero moment: when the user decides to search for or look for the experience or offering (and draws conclusions) First moment: when the user selects the specific experience (at the shelf, on screen, and so on) for the first time (and draws conclusions) Second moment: the user engages in the experience or uses the product for the first time (and draws conclusions) Ultimate moment: the user becomes and advocate for the experience or product and shares with networks © 2022 ID Academy How do people get to the experience? Extend How do people keep in touch with the Experience? Peak / end theory: Peak moment: the moment in the experience that is most intense, significant, or meaningful. End moment: the end / closing of the experience Memories and opinions of experiences are shaped by their peak moments and end moments. Put resources, effort, and insights toward designing for peak / end moments in order to ensure meaningful experiences (that people advocate for and return to). Air New Zealand identified “trying to fall asleep in coach during a long haul flight” as a peak moment (most intense, most meaningful) in their overall experience. They created the coach lie flat experience to take advantage of this insight. 53 5 E template: Entice Enter Engage Exit Extend User activities at this stage What users want at this stage What is provided Resulting gaps (underserved activities and unmet needs) Moments of truth (and key opportunities) Peak end experiences © 2022 ID Academy 54 To analyze your research consider the following discussion questions: After each discussion question you may add the question: what opportunities does this discovery unlock? Behavioral modes: Did you identify any previously unrecognized or underserved behavioral modes? Did you identify one or set of behavioral modes that apply to a broad group of users? Did you identify any modes that may be observed in a large segment of the population (they are limited in scale) but have intense, highly critical, and significant unmet needs? Can you imagine any opportunities to move people from a less desirable mode (for them or for the organization) to a more desirable mode? Extreme users: What solutions and strategies can be democratized (made available in a usable form to a larger population)? What are the triggers or motivating factors that drive people to become extreme users? Is there any value in increasing or decreasing the force of these drivers. Non users: What solutions can make it possible for non-users to engage with the system? What are the ethical and equitable issues associated with enabling non-users to engage with the system? 5E: What are the moments of truth? What are they key factors that determine if someone continues to engage or drops out (or chooses to purchase or not)? What are the issues at exit / transition to a new service? Again, what are the factors and dynamics that drive this decision and situation. © 2022 ID Academy 55 Putting it all together Even though you are using a variety or research methods, you should present your findings as a set of parallel (all at the same level, presented using a common structure) insights. Extract the insights from your research and then use a common structure to document and communicate them in our insight book. Below is an example from a long, long time ago… it is a “spread”, or two pages from a *printed* document. The work was for Doblin’s client City Harvest in NYC. The book shared insights about their partner agencies, the soup kitchens and food pantries that received their rescued food: Clear organizing mechanism and structure Clear, succinct headline Description of the insight Stories, evidence, and specific examples that add richness and detail © 2022 ID Academy The ”so what”, or the meaning / implications of this insight to the organization Design principles and suggestions, clarifying the direction or possible strategies associated with this insight. At this point you don’t need to have all of the ideas documented, but it can be helpful to “try out” your insights and demonstrate the type of ideas they will yield. 56 Case studies (reasoning by analogy) Capabilities Take a new, customercentered view of the industry Discontinuities Orthodoxies Layers and Links 57 Discontinuities Synopsis of approach – Discontinuities are a combination of trends, events, inventions, and forces that substantively change the structure of societies, businesses, and environments. – Conduct secondary research to find demographic, social, and technical trends. Look for common themes and connections between the trends, this will ensure the identified trends are more robust. – Identify and articulate the “shift” being signaled by this trend: how are things changing and what will become the ”new normal” after this trend diffuses through a large population – Author from... to… statements to name and codify the discontinuity Relevance to innovation projects Guidance – Discontinuities focus the project on “What’s next”: new structures, values, geographies and behaviors. – Make sure there are multiple, nonconnected sources and evidence for your trends to ensure they are not alternative facts – It is true: the future is here it is not evenly distributed. This method helps you identify possible “futures” and include them in your concept generation and innovation development. – Rigorous study keeps the team up to date on coming changes in culture, politics, technology, and business. – Create a separate slide or one pager for each discontinuity, including sources, implications, and potentially new ideas – Be sure to qualify your confidence in the discontinuity - is it well known and accepted, emerging, or a fringe idea? 58 Use the same practices for secondary research shared in Analysis and Synthesis: Three areas of inquiry: D Demographics Shifts in demographics will unlock new opportunities and reduce / shift the impact of existing systems. These shifts are measurable, sometimes gradual, and can be a “leading” indicator of future opportunities since systems and industries are often slow to recognize and react. Consider changes in: Age distribution in the population Location / geographies Mix of genders Buying power Education / skill level To generate From / To statements at three levels: S Social Changes in society and culture have a significant impact on future opportunities but can be harder to sense (compared to demographics) since they may develop quickly and fade quickly. T Focus of horizon 1 Technology New technologies will unlock future opportunities and also make the old ways of doing things obsolete. Here we identify emerging technologies and speculate on how they will shape our area of interest in the future. Here is a list of current technologies to consider: AI Blockchain (autonomous trust architecture) Cloud computing Automation and Robotics Connectivity and connected devices Bio engineering Nanotechnology Clean and green Focus of horizon 2 Widely known and accepted, but still profound. Emerging, nonconsensus Focus of horizon 3 Weak signals and dangerous ideas Example: Example: Example: From: inperson only From: Centrally run organizations From: capitalism To: Hybrid work To: Autonomous organizations run by Trust architectures To: Libertarian socialism 59 Discontinuity examples: 60 A refinement of discontinuities: Era analysis What it is: A summary of the relevant history of an industry, market, or organization that characterizes and details key “eras”, noting the differences between the eras as well as the unique characteristics that defined them. Usually, an era analysis is displayed as a chart, with the different eras on top and a set of variables on the side. This analysis is always historic (looking backward to deconstruct past events), and sometimes looks forward (makes speculations about future eras and vectors of change). Why it is useful: An era analysis can be a very helpful way to understand an industry, market, or individual organization. Like all models, differentiating certain eras may seem artificial (or difficult to accurately identify when they begin or end…), but it provides a clear sense of the developmental arc of the industry, market, or organization. The era analysis helps the team understand the pace of and reasons for change and provides a glimpse of future changes. It helps the team understand how key technologies, business models, and customer behaviors shaped each phase. Broadcast era Hypertext era Authoring era Process suggestions: Often, an industry or organization may have well defined eras – the team should look to see if these exist before starting any analysis. You should not be satisfied with the existing eras; the team should use this information as a jumping off point, hopefully creating new insights about the history or a firm or arena. Description Media companies provide highly finished content, users tune in at specific time Media companies provide information, users navigate through how / when they want Media companies provide base content and authoring tools, users develop highly customized content Time 1950 - 1995 - 2002 - Definition of eras begins with the search for “game changers”. These may be events, individuals, technologies, or new knowledge. These game changers represent a disruption to the norm, and usher in a new era. The team should also look for patterns of behavior, especially how these patterns developed and changed. Who holds the power Content creators Distributors Users Business model Ads that reach many users: ads are based on rough demographics of TV audience Ads that reach many users: ads tailored to audience, dynamically created based on user behavior Charge for authoring tools, sharing protocols, micro revenue sharing of content with users Game changer Broadcast infrastructure HTML Mass market editing tools Customer expectations > High quality programming for free > Content aligned with general interests > More content available > Ability to search > Ability to create more personalized experiences > Ability to participate in content creation > Highly customized, high quality experiences The process for creating this chart should be iterative: start by defining broad, obvious eras and then try to get more refined, detailed, and distinct. 61 Case studies (reasoning by analogy) Capabilities Take a new, customercentered view of the industry Discontinuities Orthodoxies Layers and Links 62 Links and layers Synopsis of approach – Organizations are often successful because they are highly focused on serving one customer layer and optimizing for one link in the value chain. However, this intense focus can result in the organization missing opportunities for innovation and growth in other customer layers and at different phases of the value chain. – This practice forces a shift in perspective, allowing the organization to consider how it might operate at different layers and at different places on the value chain. – The team will create a wide range of possible ways to shift layers and links. Collect and document all hypotheses. Prioritize and detail a smaller set of interventions that are feasible, desirable, and viable. Relevance to innovation projects Guidance – Historically, many commercially important innovations have come from organizations shifting their area of focus in both layers and links. – There are two approaches to value chains: McKinsey and Michael Porter. The Porter value chain theory is less flexible (and very valuable in certain contexts). We recommend using the McKinsey approach (the chain is developed for each organization and industry), it is more useful in this context. – The framework helps create a holistic understand of where value is created in an industry, enabling the organization to identify opportunity spaces. – Value chain disaggregation or aggregation are key tactics in most innovation playbooks at strategy consultants. – Enforce suspension of disbelief, give the team permission to consider wild and nonconventional l ways to operate. 63 To unlock innovation opportunities you may choose to select non-obvious stakeholder layer as the target of your design work: Your stakeholder’s stakeholder’s stakeholder Your stakeholder’s stakeholders Discussion: What customer layers do we usually focus on? Who are some users in typically under researched layers that we might consider investigating? Your stakeholders Line of interaction Front line team Line of invisibility Back stage team Support team Policy makers © 2022 ID Academy These images are from a project that redesigned the bone marrow transplant clinic at a large cancer center. The team added a layer of focus, the caregiver (in addition to the patient). Caregivers are friends or family that spend a significant amount of time at the facility. By shifting layers we identified a set of innovations not previously considered. The resulting, award winning facility, was known as the first BMT facility to adequately serve caregivers, and became the center of choice for top quality cancer care. 64 Stakeholder layer worksheet: key he t re o a yer? h W h la eac t rs a e d ol keh sta ion zat i n rga is o r e ay at l d on? h W use foc we ht at g i h sm yer ing? Wis new a l r s h the ddres oes t ? o t d a p a Wh sider nities pen u n o u t o c por tive op spec per tly ren r u c st mo line a on r r e e o h g t ut und nted, be to o cusin me. e r d l e e a y o u s r f r t t n e o T tha rrepr ositio r w ress. here em ex s e r y w e e p la se dd h lay nd st hat ” to a proac not er for, u unju d W i d r ul ild ap ns Co igned safe o “w ject r wo s e o n r p t lay de an u in tha Your stakeholder’s stakeholder’s stakeholder Your stakeholder’s stakeholders Your stakeholders Front line team Back stage team Support team Policy makers © 2022 ID Academy 65 Developing your value chain: Use the three conventions shown below to draw out a value chain for your project. Pick the convention that you think will yield the most opportunities for innovation (moving up or down the chain, disaggregating (breaking functions apart), and aggregating (combining functions). Feel free to use the abstraction ladder to help you determine the appropriate level for you to work at. You need not use six stages, the examples randomly all had six stages. Description: Cancer care Preventative care Screening Diagnosing In patient treatment Out patient treatment Remission management Mining Mine Processing plant Rail Port Ship Market AI Computer hardware Cloud platforms Foundation models Tools to host and mange the models Applications Corporate banking © 2022 ID Academy Wealth and asset management Mortgages Consumer lending Type 1: value creating opportunities at different stages of a customer journey Organizations that benefit from longterm customer relationships or organizations that play a part in a complex, multi stage customer journey. Usually (but not always) B2C orgs. Type 2: value creating opportunities at different stages of production from “raw materials” to “hands of the customer”. Organizations that manage or participate in a complex, multi stage process to develop and deliver offerings. Often used in both Tech and Commodity businesses. Usually (but not always) B2B orgs. Type 3: value creating opportunities of different business functions within an organization or industry: the portfolio of activities that make up a holistic business. Organizations that manage large and complex business portfolios and have a mix of B2B and B2C offerings. Mostly used in finance, banking, and insurance. Services Integrated banking Investment banking Best use: Accounts and payments Value chain worksheet: Step 1: try using each convention to draw the value chain for your project Step 2: run through the following questions for each version of your value chain: Type 1: Customer Journey 1. Text Text Text Text Text Text 2. Where is the greatest opportunity size for new entrants? Where would a well funded and innovative start up focus? 3. 5. Text Text Text Text Text Text Consider moving both up and down stream on the chain (relative to your organizations current position). What would these projects / solutions look like? What opportunities would be unlocked? What risks would be elevated? Step 3: select the value chain to use for your project Type3: Business functions Text What state is most protected and hardest to enter? Why? 4. Where are time and money being wasted? Where are the inefficiencies? Type 2: Stages of production Text Where is the greatest opportunity size for established players? Text Text Text Text 1. Which chain yielded the most interesting conversation and ideas? 2. Which chain best balances stretch (helping people think in new ways) with feasibility (will produce solutions that can be implemented, the will to implement them also exists). By answering the questions above the choice should be clear. If answers differ, usually the best answer to #2 should be selected. © 2022 ID Academy Final analysis: Layers and Links template Value chain: Stakeholder layer: Text Text Text Text Text Text Your stakeholder’s stakeholder’s stakeholder Your stakeholder’s stakeholders Your stakeholders Front line team Back stage team Combine your layers and links analyses. Identify innovation opportunities by simultaneously shifting layers and links. Each of these opportunities should become an entry in your insight book. Hosting a party Prevention Cancer treatment Example 1: a large cancer center used this practice to help shift their focus solely on treating cancer patients to an additional focus on prevention programs and screening for the entire family. Buying beer Example 2: AB / Inbev used this practice to shift innovation efforts away from “winning in the aisle” to a focus on larger Beveridge selection for user activities like hosting parties (and the decision maker was often someone different than the person buying the beer). This led to new products like Stella Artios cider and Limarita Support team Policy makers © 2022 ID Academy 68 Creating innovation themes Drives Guides Directs Diagnostics Mission statement Six thinking tools Team harmony Shapes Research Themes Drives Provides ideas for Concepts Prioritizes initiatives for Piloting and testing Sprint planning Innovation themes help activate your research and structure innovation efforts across the organization: Company Pfizer CHC Themes are.. Theme Portable healthcare Example An opportunity space that aligns the organization’s position and capabilities with market and customer needs / opportunities. Points of consistency (across your portfolio) and distinction (compared to competitors). The result of a deep understanding of the customer and the market. There are two methods you may deploy to develop themes: McDonald’s Hand-ible food Identify significant innovation opportunities areas that overlap with organizational capabilities. Identify transformational innovation opportunities in areas where the organization currently does not or will not play. Havaianas Customizable fashion Tips for creating successful themes: Avoid generic, non specific themes like “be innovative” Assess the market: can you tell if any of your competitors are basing their new offerings on a set of themes? Themes should help you make trade offs (if the trade offs are not clear, you may need to refine the theme) Revisit themes over time. Do not create a laundry list, any more than three to five themes is too many 70 Method 1: create themes by identifying significant innovation opportunities areas that overlap with organizational capabilities Steps Identify, organize, and cluster key trends and insights from all six streams of your innovation research. Craft themes around unmet needs, emerging technologies, shifts in behavior and preferences, forthcoming shifts in society and culture, and underserved activities. Outcomes Identify themes 10 – 15 themes that are MECE, don’t fall victim to failure of the imagination, and are rooted in your innovation research. Prioritize based on size Narrow down the number of themes based on *your best guess at* of the opportunity size. Use the following four factors to help develop a sense of the opportunity size: Frequency: how often will people experience, engage with, or be affected by the theme? Criticality: how large of an impact will the theme have on people’s life / work? Size of audience: how many people will be affected by the theme? Distinctiveness: are many organizations already trying to “win” with this theme, or is the space underserviced and unexplored? 5 – 7 themes that represent a significant opportunity (come combination of frequent, critical, large audience, and distinctiveness). Finalize based on capabilities Finally, choose themes that are aligned with the organization’s capabilities, and where there is also a willingness to pursue the direction. Understand the company’s innovation capabilities based on operational skills (what they do to maintain the current enterprise), growth skills (innovation and change management), relationships / partnerships and unique privileged assets. 3 – 5 themes that are actionable, inspiring, and a good fit for the organization’s innovation ambitions. 71 Method 2: create themes by identifying transformational innovation opportunities in areas where the organization currently does not or will not play 1. Identify unexplored territories Identify transformational innovation territories where the organization does not currently focus due to constraints, orthodoxies, and structure. You may use the following set of questions to help generate candidate themes: What can’t we pursue the following ideas because: Our business model won’t work Our brand is not known or credible in that area We don’t have the capabilities to address that area Those are undesirable customers or stakeholders We can’t disrupt the existing industry structure or our partnerships We just would never do something like that We use the word transformational intentionally. We are identifying themes the organization does not currently pursue and then developing ways to pursue them the outcome will be a transformation of the organization (likely in both strategy and structure). 2. Prioritize based on estimate of impact if pursued For each theme estimate the likely outputs, outcomes, and impact. This can be “back of envelope” and rough as long are your estimates are consistent across all of your ideas. Prioritize themes with the largest impact: What are the likely outputs of successful pursuing this theme? Estimate tangible numbers like profits and number of people reached. For example, if we captured 5% of this market it would be worth $200m. What are the likely outcomes of successful pursuing this theme? Estimate changes and effects on employees, customers, competitors, community. For example, we would engage with a new set of customers earlier in their journey. What is the impact of successful pursuing this theme? How would this change our ultimate purpose, what we hope to be known for? For example, we can change from an academic org to a digital org. 2. Finalize based on internal passion and willingness to pursue Transformational opportunities, by their nature, are a challenge to implement. Therefor we use “passion for” and “excitement about” as the final screen. Note that we are not using capabilities alignment as a screen here; transformational opportunities will likely require new capabilities to be developed, partnered with, or licensed. You can gauge passion and excitement for an idea in the organization though answering the following questions: Would they quit their jobs to join this project? Would they invest in this opportunity with their own money? Would they be willing to present the idea to venture capital firms? Often passion and excitement about a theme are not evenly distributed around an organization. To help you prioritize, small pools and pockets with significant passion / excitement mean a theme is more attractive than a theme with widespread but moderate passion and desire to pursue. 72 Innovation Jeopardy worksheet Unlike Jeopardy where we are given the clue and need to give the answer, in Innovation Jeopardy we have the answers… and need to write the clue. The goal is to identify transformational innovation themes that the organization currently cannot or will not address. The ”answers” are prompts meant to reveal and unearth opportunity spaces that may feel impossible or “out of bounds”. The clue: The reason we can’t do… The reason we can’t do… The reason we can’t do… The reason we can’t do… The reason we can’t do… The reason we can’t do… The answer: What is… our business model won’t work The dollar amount: $1m $100m $1b $1m $100m $1b $1m $100m $1b What is… those are undesirable customers or stakeholders $1m $100m $1b What is… we can’t disrupt the existing industry structure or our partnerships $1m $100m $1b What is… we just would never do something like that $1m $100m $1b What is… our brand is not known or credible in that area What is… we don’t have the capabilities to address that area 73 Innovation themes will help guide and structure your projects: 80% of innovation efforts should be based on one of the themes. Not all efforts need to fit under the themes, but a rational should be required for these wild card projects. Use the following template to catalog projects: Create a dashboard to track and measure the use of themes and the resulting projects. Use the portfolio map below. Also include notes on projected launch date and stage of development (not shown). Some organizations make their themes tangible through the creation of “theme rooms” or project boxes that can be moved around to guide innovation efforts. Innovation portfolio Concept submission form Version and date: Theme addressed: theme 1 theme 2 theme 3 Horizon 1 Horizon 2 Horizon 3 Low Medium High Low Summary of idea: Resource requirements: Med Degree of innovation: Projected value High Concept name: Now Projected value: Low Medium High Timing: Now Soon Later Soon Later Timing Resource requirements theme 1 theme 2 theme 3 74 Generating and structuring concepts Drives Guides Directs Diagnostics Mission statement Six thinking tools Team harmony Shapes Research Themes Drives Provides ideas for Concepts Prioritizes initiatives for Piloting and testing Sprint planning Use the following five step creative process to develop innovation concepts and solutions: Frame Generate Consciously and unconsciously “think on” the idea fragments Take a break Go for a walk Travel Unify Combine ideas to create internally consistent and robust concepts Platforms Systems Offerings Order Description of step: What we have done up to this point: Insight book Themes Mission statement Outputs: Your work up to this point, summarized in a sharable document. Over 100 ideas developed using the templates and organized in a spreadsheet Thoughts about what was missed… and how existing ideas could be made better (changes entered into templates / spreadsheet) 10 – 15 total wholistic ideas documented as platforms or systems or offerings. One portfolio map and / or one road map Two weeks to four months One week One week 3 days 1 day Typical time required to complete: Create a set of idea fragments: Smashing Patterning Innovation matrix Incubate Relate and assess to determine what to move into piloting and testing Portfolio Road map 76 Framing: preparing to develop innovation concepts And should include ways to reinforce new thinking: Our process reduces common failure modes of brainstorming: Why people say brainstorming does not work Strategies increase effectiveness Feels random and irrelevant, not connected to organizational needs and strategy Build idea generation activities that are guided by and connected to the innovation mission statement and the themes Poorly organized, loosely defined Structure idea generation sessions using the three practices. Require documentation and cataloging of the process and ideas Only loud voices are heard and valued Ensure all methods include opportunities for individual contributions and work outside of team settings No follow up, no tangible actions and results Make all idea generation session part of a larger process with clearly connected pathways for next steps and implementation © 2022 ID Academy Produce high quality materials and manipulatives. EXAMPLE: we produced a card deck (one card for each insight from the insight book) that made it easier for participants to select and refer to the outcomes of the innovation research at idea generation workshops Create immersive spaces and rooms to host events. EXAMPLE: During the winter in Toronto, we decorated the innovation space like a backyard summer barbeque (including inflatable pools, fake palm trees, and grilled hot dogs) when developing ideas for a retailer’s summer products strategy. This helped ground all participants in the spirit of summer even though it was snowing and cold. Make equivalent analogies to illustrate the problem. EXAMPLE: when working on a project that was focused increasing the efficiency of stocking the shelves of a retail store, we noted that for an average employee, stocking the shelves every day was equivalent carrying a Ford Explorer across the Grand Canyon. This story made the employee needs and experience more visceral to managers that were not experienced with stocking shelves. Elves and the shoemaker (design version) EXAMPLE: for a large insurance company we took their rough storyboards and half sheets and created live action videos and digital prototypes in between weekly brainstorming sessions. Making the ideas more tangible and higher fidelity motivated participants to extend their ideas and creativity. 77 Insight smashing: This method is based on the concept of forced connections. Experienced designers can be experts at making non-intuitive connections between features, functions, and ideas. In Insight smashing we force this activity. You simply create random pairs of “values” from the strategy table and then say “if I had to make a concept that included these two values, what else would be included and what would it be?”. Many times these ideas are not viable, but overall the activity can create some interesting combinations. This is a “thinking fast” activity and you should try to get each team member to try a different combination every 3 minutes. ? Take two random values from the table. Your new concept needs to include both. What other values from the strategy table will help create a coherent concept? © 2022 ID Academy Process for insight smashing: 1. Select two insights from your insight book. It is fine to do this randomly, but try to select insights from different sections. The more dissimilar your insights, the more divergent your ideas will be (this is a positive). 2. Develop a concept that simultaneously addresses both insights. Use the worksheet to document your solution. You may also use a spreadsheet to manage the large number of ideas you will create. 3. Continue to pair insights and develop solutions until the team has developed over 100 ideas. This may take time, but it is important to achieve a high volume of ideas to ensure coverage of all insights and opportunities. 4. Run through your list of ideas and… Eliminate any “joke” ideas or ideas that are obviously not feasible (but be careful… remember the business school assignment that turned into FedEx was given an F). Identify ideas that are strongly related to your innovation themes, these should be prioritized to be used in the forthcoming platform / system step. Look for ideas that seem to be complementary / work well together. Make note of these combinations and also prioritize them for use in the platform / system step. Finally, identify ideas that are simply cool, from a cultural or technological perspective. These should also be prioritized for use in the next few steps. 78 Insight smashing worksheet Insight 1: Concept name: Analysis: Description and key benefits: Fit with themes: Low Source (section of the insight book): High theme 1 theme 2 theme 3 How it works: Works well with the following ideas: Insight 2: Cool factor: Source (section of the insight book): Technically cool Why it works: Culturally cool © 2022 ID Academy 79 Product patterning: There are a range of brainstorming methods (including SCAMPER and TRIZ) that use “patterns” of past product innovation to help you identify new concepts. The patterns were developed by studying successful new innovations and understanding how combinations of features were added, removed, or merged to create new value. In this class of methods you take a key component of an existing solution, apply one of the patterns, and then develop a concept based on the resulting constraints or new capabilities. To use this method you must first break down the existing product, solution, or service (or next best alternative) you are trying to innovate. Use the following three conventions to thoroughly decompose the existing solution so that you may apply the patterns: This method uses the concept of forced scenarios to help create new ideas. By forcing your team to apply the patterns and develop resulting solutions you can enhance creative thinking (using approaches known to yield valuable ideas). We recommend using three patterns: Components: The parts and pieces (physical, digital, content) that make up the solution. Ancient mobile phone example: single screen, keypad buttons, microphone, case, speaker, battery. So, for example, if we were designing a new training program one of the components would be “faculty”. We would then apply the pattern “subtract”. By subtracting faculty we now need to design a system that can deliver training without faculty. We can then create a second, separate idea when we apply the pattern “multiply”. We then need to design a training program that leverages multiple faculty in the classroom. Attributes: the qualities and features that are a characteristic or inherent part of the solution. Ancient mobile phone example: comes in two colors, battery lasts 24 hours, different price for local and long distance calls, two year contract, weighs 1.5 pounds. Subtraction: Remove a key element of the product and resolve how it will still work - take the buttons off a mobile phone, how can we make calls? Multiplication: Make copies of one element, but make each element do something meaningfully different - create two screens on the phone Division: Break the key elements apart - separate the ear piece from a phone for hands free use Task unification: Assign a new task to an existing element of the product, thereby unifying the two tasks in a single component – use the keypad to control ringer volume Attribute dependency change: Alter (by introducing new relationships where none existed, eliminating, or changing) the dependent relationships between attributes of the product and attributes of its immediate environment – honestly this one confuses me and I never use it. Elements in the context of use: what is used with, around, and for the solution. Ancient mobile phone example: worn in case on belt, separate PDA (personal digital assistant) and beeper also carried on belt. Source:Goldenberg, Horowitz , Levav, and Mazursky, “Finding Your Innovation Sweet Spot,” HBR 2003 © 2022 ID Academy 80 Product patterning worksheet 2. Circle the pattern(s) you plan to apply. Choose from 1 – 3 different categories. Subtraction: Remove a key element of the product and resolve how it will still work Multiplication: Make copies of one element, but make each element do something meaningfully different Division: Break the key elements apar Task unification: Assign a new task to an existing element of the product, thereby unifying the two tasks in a single component Components: Attributes: Elements in the context of use: You need only to do the decomposition once, just copy and paste into the worksheet so you may create multiple ideas © 2022 ID Academy 3. Brainstorm new products, services and solutions that result from applying the pattern to the components, attributes, and elements. Consider: – What unmet needs will the new form satisfy? – What new benefits and value may be delivered? – Could this unlock new users and geographies? – What are the challenges and risks of this new form? 4. Document the thinking from step 3 below: Concept name: Description and key benefits: Analysis: Fit with themes: Low High theme 1 theme 2 theme 3 Works well with the following ideas: How it works: Cool factor: Technically cool 1. Circle the component, attribute, and/or element to which you will apply the patterns. Choose 1 – 3, can be from Why it works: Culturally cool Ideally you will use this method to create at least 20 ideas (which means 20 worksheets). These ideas balance the ideas created from the previous method; patterning tends to create ideas that extend and leverage existing platforms. 81 The method explores both commercial and product innovation, prompting you to consider two common, frequently valuable approaches to innovation. Commercial innovation Adjacent Existing Customers and Markets New Commercial /product innovation matrix Product innovation Existing Incremental Offerings New Commercial innovation: may include everything except innovation of the core product / service. This could include brand, packaging, sales / delivery channel, business model, and the ecosystem / network. Challenge: how to deliver existing product to new customers and markets. Often, we get locked into beliefs about what existing customers want and how they want it. By forcing the team to think about how to make an existing product attractive to new markets and customers we remove the barriers and orthodoxies based on beliefs related to “the way we have always done it”. Product innovation: a focus on the core product and service. Challenge: how to deliver new products and services to existing customers. This generally forces us to consider the unmet needs of our existing user base, often forcing us to take a broader view of their experiences and ambitions. © 2022 ID Academy Questions to consider: What are some adjacent and new markets we might consider serving? How might we offer our existing assets, products, and services to adjacent and new markets? Questions to consider: What are some new assets, products, and services might we create? How might we offer these new assets, products, and services to our existing markets? 82 Commercial /product innovation matrix – Doblin’s innovation tactics In the late 1990s, after a broad study of successful innovations, Doblin discovered that significant innovations can be categorized by type (up to that point we only categorized innovation by rate – incremental, disruptive, sustaining). Additi0anlly, they discovered the most profitable and sustained innovations were composed of three or more types (innovating one type is usually not enough to sustain a long term comparative advantage). These ten types of innovation can be further organized by the commercial / product innovation framework. Years later the firm identified and cataloged a series tactics that organizations successfully employed to innovate in each of the types. This *fairly thorough* list of tactics can be used to guide idea generation and concepts development. You don’t need to start from a blank page: use the tactics as building blocks and to help you think through options for innovating in each type. Use this slide in combination with the following two worksheets. © 2022 ID Academy Product innovation Commercial innovation Premium Cost Leadership Merger/ Acquisition Organizational Design Process Standardization Superior Product Complements Ease of Use Commercial innovation Try Before You Buy Diversification Co-Branding Flagship Store Brand Leverage Go Direct Private Label Brand Extension Consolidation Incentive Systems Localization Microtransactions Open Innovation IT Integration Engaging Process Efficiency Functionality Extensions/ Plug-ins Product Bundling Loyalty Programs Forced Scarcity Secondary Markets Competency Center Flexible Manufacturing Safety Modular Systems Added Value Non-Traditional Channels Supply Chain Integration Outsourcing Process Automation Feature Aggregation Product/Service Platforms Concierge Pop-up Presence Added Functionality Integrated Offering Total Experience Management Indirect Distribution Crowdsourcing Decentralized Management On-Demand Production Performance Simplification Supplementary Service Multi-Level Marketing Superior Service Cross-selling Knowledge Management Lean Production Environmental Sensitivity Personalized Information On-Demand User Communities/Sup port Systems Experience Center Scaled Transactions Subscription Membership Installed Base Switchboard Complementary Partnering Auction Alliances User-Defined Franchising Freemium Coopetition Flexible Pricing Collaboration Float Crowdfunding Financing Ad-Supported Licensing Corporate University Asset Standardization Crowd Research Logistics Systems Strategic Design Intellectual Property User Generated Predictive Analytics Conservation Customization Focus Styling Guarantee Lease or Loan Context Specific Component Branding Transparency Values Alignment Certification Experience Automation Experience Simplification Curation Experience Enabling Mastery Autonomy and Authority Community and Belonging Personalization Whimsy and Personality Status and Recognition Self-Service Metered Use Bundled Pricing Disaggregated Pricing Risk Sharing 83 Commercial innovation worksheet Existing products for new or adjacent customers and markets Tactics from the configuration and experience sections (from Doblin) Framing your concept: Concept name: Analysis: What new / adjacent market or customer is the focus of this innovation? Description and key benefits: Fit with themes: Low High theme 1 theme 2 theme 3 How it works: Insight 1: What tactics can you apply (from Doblin’s list of innovation tactics) to your existing product to serve these customers / markets and their needs. Use the space on the right to detail your concept. © 2022 ID Academy Works well with the following ideas: Cool factor: Why it works: Source (section of the insight book): Technically cool What unmet or underserved needs do you plan to address? Culturally cool 84 Product innovation worksheet New products and services to existing customers Tactics from the offering section (from Doblin) Framing your concept: Concept name: Analysis: What new insights might we discover by looking more broadly or deeply at the needs of our current customers? What broader activities might we address? (e.g. drinking beer to hosting a party) Where are they currently wasting time, money, or in an unsafe or unjust situation? Description and key benefits: Fit with themes: Low High theme 1 theme 2 theme 3 How it works: Insight 1: Use the space on the right to detail your concept. © 2022 ID Academy Cool factor: Why it works: Source (section of the insight book): Technically cool What tactics can you apply (from Doblin’s list of innovation tactics) to your existing product to serve these customers / markets and their needs. Works well with the following ideas: Culturally cool 85 Example idea documentation spreadsheet # Name Description Source Primary Theme These should be copied from the worksheets Number all of your ideas. This will help when sorting, relating, and organizing. Feel free to add other relevant columns (but be careful, every column you add makes it less likely that people will use the spreadsheet!) Other columns could include: Implementation timing Estimated financial return Degree of innovation Resource requirements Degree of ”must win-ness” © 2022 ID Academy Identify where the idea came from. For ideas created by the innovation team, distinguish between the three source practices. Include options submitted by employees from outside the team, leadership, and outside partners / consultants. Your drop down menu may look like this: Team: Smashing Team: Patterning Team: Innovation matrix Submission from organization Submission from leadership Submission from partner Priority Complimentary ideas (by number) Link to worksheet Make the detailed source worksheet easy to find and review. Identify any highly related ideas (ideas with the same objective and and/or same approach), or ideas that will work well together or are required for implementation. Create a dropdown menu to select high, medium, and low priority. Resist the urge to make this overly precise (no need for 1 – 10 rating). Create a dropdown menu to select from the themes (and include an not applicable (NA) option for ideas that have an associated theme). Force the choice of a single, primary theme. Allowing multiple themes to be selected will make sorting and relating unnecessarily complex. 86 Allow incubation time Often our best ideas are not generated during meetings but rather while engaging in non-project related activities like commuting, playing sports, or relaxing and listening to music. It is important that we allow time to “turn the idea over in our heads a few times” before we consider a list of ideas final. This step is easy, but is often skipped. The following list is not exhaustive: Go look at weird or inspiring art Take break Go for a walk Go for a swim Read an unrelated book Play sports Visit a new place Do nothing Meditate Talk to people Look at work from another team © 2022 ID Academy 87 Unify your ideas into systems, offerings, and platforms: Start with your idea spreadsheet: Cluster the individual ideas (aka idea fragments) : Document using the appropriate convention: Concept systems Organization Platform Unify… Ideas that work well together Ideas that solve for the same theme Ideas aligned with our ambition level Ideas that are a means to a common end It is OK to re-use idea fragments in multiple ideas © 2022 ID Academy 88 Unify your ideas into systems, offerings, and platforms: Concept systems: Organization: Platform A set of concepts that work together to achieve an intended outcome (ideally related to one of the themes). Your systems could be new products, services, and experiences. Concept systems are composed of “idea fragments” generated during the first steps of this phase. Idea fragments, when considered as a whole, that make up the systems should be: Mutually reinforcing: work well together, make each other more effective and efficient Internally consistent: all idea fragments belong in the system and all help achieve the objective This approach starts as a concept system (and follows the rules of being mutually reinforcing and internally consistent), but likely cannot be implemented through the existing enterprise and partner network. This class of idea requires development of a new organization (or business unit) in order to enab

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