Revealing Emerging Expectations, the most important step of innovation.

February 12, 2008 · Posted in innovation, strategy · 1 Comment 

Emerging expectations are the things customers will start to demand next. These are features, benefits, and values current products are missing but customers haven’t started demanding yet. When customers realize these desires can be met they will demand it from all future products. It’s essential to have something ready when that happens or you will lose customers.

Working on things customers are already asking for puts you in a race with others. If you try to meet existing desires you are in a race against time. Even if you make it to market first, your advantage will quickly disappear. Others will develop competing products, if they haven’t already been working on them. If you don’t have the next product ready your innovation will be overwhelmed with copycats that make improvements on your design.

Revealing emerging expectations allows you to work two steps ahead so you always have the next great thing perfected and ready to release when the demand is strongest and profits are greatest. Plus if you can accurately predict the future innovations you will be able to overwhelm competitors with improvements faster and with less expense than they can copy you. You get ahead, stay ahead, and increase your lead.

Just because you can make it doesn’t mean customers will want it. To get the best return on investment you need to choose the innovations customers will do anything to get. And even if it’s something customers want it doesn’t mean its right for you to sell. So the innovation system you use must reveal a large selection emerging expectations, preferably all, and provide a way for you to compare and rank them in order of value to you.
Many people can think of pie in the sky “futuristic” products. Science fiction is full of those types of ideas. Some of those sci-fi products actually do become real products and are successful. The question is, when? Absolutely predicting the future is impossible but understanding the land marks to watch for gives you the information to plan your actions. If a new product depends on other developments then you should wait for those to be released before releasing yours. You can have everything ready to go and jump into the market at the exact right time. You maximize profits and minimize risk. A complete innovation system shows you those land marks with enough lead time to act.

Revealing the emerging expectations is what makes the OutCompete Predictive Innovation Method predictive and not just another feel good innovation system. The way it does this is by using certain laws of systems that apply to every system. Understanding that every system must follow certain laws allows you to see which things will become “must have innovations” and the order it will occur.

Predicting the Future

October 7, 2006 · Posted in innovation · 2 Comments 

One of the most difficult aspects of the current world is the speed that things are changing. And to top it off the speed of change is increasing. It’s impossible to survive by merely reacting. Simply being faster isn’t enough. If you’re working on tomorrow’s product and you make a mistake you have missed your chance and you go to the back of the line.

You have to be working two steps ahead.

The only way to stay two steps ahead is to know in advance what customers expect. You need to predict the future.

When I worked at Apple we designed something called n-tier distributed client server computing. That’s a very technical term for breaking a task up among any number of levels of computers. That improves performance, reduces cost and increases functionality. The concept wasn’t completely new but no one had done it very well. The reason we wanted to do it was to solve the two out of three problem.

You’ve probably heard the two out of three problem, “you can have it fast, good or cheap, pick two.” Its most often said as a sarcastic joke to an unreasonable request. The two out of three problem is an impossible problem to solve, unless you do something deceptively simple but I’ll leave solving impossible problems for a future post.

What my team at Apple realized is if we made such a system it would be made in a very different way. So we not only designed a system, we created methods for designing those types of systems. As it turned out, only a few years later n-tier distributed client server computing was popularized by someone else and is now called the web. Because Apple had seen ahead to develop methods for building web systems they were able to keep up and eventually re-gain the lead again with products like iPod and iTunes.

So staying two steps ahead requires predicting the future. What we want to predict is what customers will buy in the near future. It’s essential to predict the near future and not something way off in the science fiction future. If you are too far ahead of the market you will waste resources on marketing. Success comes from giving people what they want when they want it.

I’m now working with OutCompete. They created a system for figuring this out. We call what customers will want in the future their Emerging Expectations. How do you predict customers Emerging Expectations?

First understand what drives customers desires. One basic truth of humans is we always want more. We want better, easier, for less cost and with less risk than yesterday.

As it turns out we follow a predictable cyclical pattern starting with new features moving toward lowest price then starting again with new features.

So look at any product and you will find it’s at one of those stages. Lets look at portable music players. You might not remember but transistor radios were the first portable electronic music player. The next improvement was adding the ability to choose your own music. The tape player did that. At first tape players were big but eventually Sony made a pocket sized tape player. Next came digital music on CDs. At first CDs weren’t portable but soon Sony made portable CD players. The first ones skipped a lot but improvements were made and they became more reliable and smaller and then cheaper.

Now there is the Apple iPod. The iPod improved on portable CD players by allowing you to build your own lists of songs to play along with a store to buy individual songs. When iPods first came out they only played music, Apple made incremental improvements offering smaller ones and eventually competitors came in with cheaper products. Now Apple moved to the next level with the Video iPod, introducing a new feature and is moving steadily through the cycle.

Looking back each step in the progression was very logical. Once you become accustomed to analyzing the more, better, cheaper, with less risk cycle future progressions are just as logical.

By knowing what customers want today and what they will want in the future its possible to sketch out a map of each possible step. With the map of all the possible steps you can always stay two steps ahead.

In future posts I’ll talk about: