Limited Wisdom of Crowds?

June 18, 2010

Nicholas G. Carr wrote an excellent article, “The Ignorance of Crowds,” about the limitation of crowd-sourcing or open source software. He focuses on the experience of Linux and Wikipedia. The masses primarily serve as bug-fixers for Linux, whose development is closely managed by a small team; Wikipedia is attempting to bring in similar control to address issues such as “The Flintstones” having twice as long an entry as Homer.

Carr argues that the choice is not “The Cathedral” or “The Bazaar” as presented in a seminal paper by Eric Raymond, but how to use both approaches. Further he argues that really radical or disruptive innovation is more likely to emerge from the Cathedral model led by a few elite leaders. 

Anyone involved in innovation should read the full article at:

http://www.strategy-business.com/article/07204


Social Media Marketing will Drive Product Innovation

June 4, 2010

Note: This blog was written for the inaugural issue of Social Media Marketing Magazine and was originally posted at  http://bit.ly/smm169

Too much of what is being written about social media marketing (SMM) these days still has the ring of futurism. Wake up—the SMM era is already here! Companies are increasing their SMM budgets today, and their sales are being driven by customer-to-customer buzz at this very moment.

Much of the current focus on SMM by companies, as well as the business press, is about 1) designing marketing and PR to affect the C2C buzz, 2) monitoring how much and what is being communicated about their products and services, and 3) influencing the conversations about their products and services online. These direct efforts to create, monitor, and influence the online narrative of a company and its products will continue to be the focus of SMM strategy for most organizations.

However, SMM will also have a huge impact on marketing research and innovation in organizations. It’s no secret that many of the traditional marketing research tools (focus groups, surveys, brainstorming, and phone interviews) are woefully ineffective at uncovering the deep knowledge of customers and users that organizations today seek to enhance innovation.

More effective research methods, such as ethnography or individual interviews, have become more widely used but are viewed as excessively expensive or time consuming. SMM will change these economics. For example, online ethnography is already a growing area of study by anthropologists and marketers alike, and individuals are being engaged one-on-one synchronously, using Internet tools. These evolving online qualitative methods will provide better user insight and information to drive innovation.

As I have spent the majority of my career in service and product innovation, I may perhaps be biased, but I believe that ultimately the impact of SMM on innovation is likely to prove even more important than the much more publicized effect on how companies communicate with their target audiences.

Through the use of SMM, organizations will never have to drive innovation alone. Key users and customers will always be co-pilots. The nature of user involvement will vary, but it will be ubiquitous. Sometimes, product innovation will be driven through crowdsourcing. Sometimes, only “lead users” will have a seat in the cockpit. And at other times, users will be selected by criteria specific to a product. But users will be involved in the innovation. Actually, the difference between user innovation and simple user outreach is not always clear: users involved in innovation become engaged customers.

Certainly it will prove exciting to watch the evolution of SMM. And I look forward to monitoring the changing world of marketing.

To view the full inaugural issue of SMM Magazine go to http://www.smmmagazine.com/


Ethnography and Product Innovation

January 21, 2010

 Does Ethnography make the front end of innovation less fuzzy?

I have written several posts about the use of ethnography to gather good data from users. A recent article in the Journal of Product Innovation Management explores the topic in detail, including likely advantages from using ethnography and advantages of using in the early stage of innovation.

An abstract of the article can be read here:

http://www3.interscience.wiley.com/journal/118563685/abstract

Past posts have included:

http://servicecocreation.com/2009/06/22/in-search-of-innovation/

http://servicecocreation.com/2009/06/22/in-search-of-innovation/


Cola Co-creation

July 28, 2009

Coca-cola has developed new dispensing machines that contain up to thirty flavors that can produce up to 100 different types of soda. The machines can be reset realtime and communicate so that coke can introduce a new soft drink and observe sales results immediately.

This is “rapid protoyping,” “probe and learn,” and “effectuation” for sweetened drinks — strategies usually associated with high tech products. Read the details in the Information Week article:

http://tinyurl.com/qrddol

The next step?

Why not employ the technology in vending machines and allow users to create their own drinks? COLA CO-CREATION


In Search of Innovation

June 22, 2009

A great article on innovation in todays WSJ:

http://online.wsj.com/article/SB10001424052970204830304574133562888635626.html

Look away from the lampost

I suppose a cynic might claim that “great” means that it agrees with the recurring themes and principles discussed in this blog. Specifically:

  1. Storytelling,
  2. Involving users
  3. Lead Users
  4. Deep customer information (ethnography)
  5. Probe and Learn

as well as other ideas.

Take the time to read it!


Cocreation: the core competency of innovation

March 6, 2009

I generally don’t post PR puff pieces on my blogs, but this announced research joint venture between Babson College and Venkat Ramaswamy’s consulting firm sounds important for service innovation.

Next Practices in Value Creation aims to “demonstrate how organizations can co-create innovation… 

The research will investigate how organizations are co-creating value with customers through compelling experiences… interaction with customers is the new locus of value creation, and… co-creation is the new competency for firms… core competences are no longer located in the value chain of the company, but at the point of interaction between the customer and the firm.”

 To see the full release:

http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/03-06-2009/0004984339&EDATE=


Service Science vs. Service Dominant Logic

January 27, 2009

 

SDL or Service Science: establishing standards or branding?

IBM has been fostering “service science” as an approach to understand service and service innovation. Two academics who wrote the well known Journal of Marketing article have been promoting the “Service Dominant Logic” (“SDL”) of marketing in books, special issues and conferences from Australia to Hawaii to Naples.

Is this a branding competition or an effort to establish standards like Beta vs VHS and Blue Ray vs. HD DVD?

Four IBM researchers prepared a paper for the Otago Forum, comparing the ten foundational principles of service science to the ten foundational principles of SDL. Not surprisingly they find a lot of overlap — enough that I might argue that it is more of a branding issue than a standards one. Their paper is available here:

http://marketing.otago.ac.nz/events/OtagoForum/Final%20forum%20papers/Otago%20Forum%20Paper%202_Spohrer.pdf


Online Communities — Replacements for Focus Groups

December 16, 2008

A recurring theme of postings on customer involvement methods is that traditional market research methods such as focus groups and brainstorming  kill ideas and creativity; there is a need for better ideation techniques that truly engage users.

J. Scott Armstrong has suggested using Delphi techniques to access the wisdom of crowds without suffering from idea truncation common to group efforts. Some researchers have suggested online groups to loosen the group effect.

Another blog takes a look at the benefits and dangers of using online communities in new service development:

http://www.mycustomer.com/cgi-bin/item.cgi?id=133916


Weird Al and the Internet

October 22, 2008

Wired magazine has an interesting article about how the internet has affected the career of Weird Al Yankovic. Weird Al is impacted by two trends from the internet:

  1. Fragmenting of the market into small segments (Long Tail?)
  2. A surplus of amateur parodies on You Tube

as well as the fact that the few mass acts that exist seem to be self-parodies (e.g. Jessica Simpson, Brittany, Kevin F.).

Read it here:

 http://www.wired.com/entertainment/theweb/magazine/16-10/ff_weirdal

A blogger suggests ways that Weird Al could use the Internet’s potential for crowdsourcing to stay ahead of trends: http://blog.ogilvypr.com/?p=452

Weird Al has embraced the new media, releasing his first parody on iTunes two weeks ago. Digital release allows him to parody a song while it is still topping the charts…


Why do users collaborate??

October 15, 2008

Every firm has an IP unit that is looking to protect and harvest the ideas generated within the organization.

Patent Trolls are infamous in software and other high tech areas.

Why then are users willing to collaborate with firms and allow them to have the IP?

In his discussion of Lead users and in several articles, Eric von Hippel has suggested that the most demanding users stand to benefit by supplier advances so much that they are willing to effectively grant them free IP.

A recent blog addresses this issue with breakfast cereal:

http://blog.openinnovation.net/2008/10/open-innovation-on-cheap.html

The issue is not quite as stark in the world of free and open source software (“FOSS”), as no one is reaping the tolls, although participants are again giving up potentially valuable IP.

The following article in Linux.com discusses von Hippel’s contribution to our understanding of FOSS:

http://www.linux.com/feature/149403

For a short time I was head of NSD at a software firm and was amazed at extensive customer contributions by secretive firms who otherwise carefully guarded their IP. Collaboration happens!