Why Crowdsourcing Often Fails

And what you may not know about crowdsourcing

by Idris Mootee

Innovation is hard. It is not about getting the idea at all, it is about managing ideas. So you've have a few great ideas, so what? There is a lot of art and science behind moving ideas along corporate decision chain as well as in managing the unknowns. I remember I used to teach an in-house program for my strategists on "managing the unknowns." These MBAs would struggle with not finding enough data points and get stuck in the innovation process. How often do these big world-changing ideas come from people with MBAs?

But then there are so many ideas such as Google, Twitter, Facebook, OnStar, Kindle, Blackberry and the X-37B space plane launched this week... that turned into innovations that change the way we work and play forever, stirred new competition, and created new wealth. The future is never about the future, it is about now.

What changed our life, work and business? I will say automation, digital technologies, social media, modern medicines, jet engines, fast food, mass manufacturing, the marginal productivity theory of wages, consumerism and modernism. Many of these ideas grew in a world with fundamental economic convictions, namely the mass-production and mass-consumption of goods.

But these assumptions are fast changing. Spend a few days around the world stopping over in Shenzen, Shanghai, Mumbai and Seoul and you know what's really happening out there. Companies are getting desperate and now reaching out to suppliers and customers for ideas. Some even go to the extreme of sourcing ideas from everyone - the crowd.

There's this naive belief that the crowd is smarter than individual. This is a dangerous theory. Engaging suppliers, advanced users and front-end employees are good practices, but not letting them do your job.

There is one recent book about crowdsourcing suggesting that companies should stir things up. Just look at the current state of US politics, and ask yourself, is that what you want to happen for your company?

Furthermore, let me tell you the secret of success for open innovation (this is a better word than crowdsourcing). It is not the ideas, the breadth of the ideas, the quality of ideas, etc. It is about building a team that believes in it and is empowered to make it happen. Crowdsourcing and futurecasting are all great tools to help you get inspired, but they are not innovation. The most important part of innovation is the managing, mobilizing and aligning the ideas to strategic intent. At idea couture, we have the toolkits and processes and have repeatedly applied them effectively in large organizational settings. Unfortunately that's not something we can share here.

Another way to explain what I am trying to say - Karim R. Lakhani, a pro at Harvard Business School, calls what most people refer to as crowdsourcing "broadcast search." A problem statement is broadcast along with associated incentives, and people with expertise apply their talent to solving the problem. I like the term virtuoso search better. But, whatever term we use, let's not call it crowdsourcing and pretend that 10,000 average joes invent better products than Steve Jobs.

The example of Cambrian House provides learnings for everyone. It was a very innovative idea. They were followed by the Kluster, CrowdSpirit, CrowdSpring, and FellowForce. Cambrian House was a pioneer in putting crowdsourcing to work. The company doesn't really exist today and the technology was sold to another company for a fraction of the original investment. This other company now offers their technology solution as a software service.

Cambrian House's CEO Michael Sikorsky reflected on Tech Crunch a few years back about lessons learned (excerpt):

Indeed, our model failed. In short: we became a destination people loved to bookmark more than they loved to actively visit (our traffic pattern was scarily VC-ish). The limiting reagent in the start-up equation is not ideas, but amazing founding teams.

A key assumption for us, which proved out NOT true: given a great idea with great community support and great market test data, we would be able to find (crowdsource) a team willing to execute it OR we could execute it ourselves. We needed amazing founding teams for each of the ideas - this is where our model fell short.

What we learned: it would have been better to back great teams with horrible ideas because most of the heavy lifting kept falling back on us, or a few select community members. A vicious cycle was created leading all of us to get more and more diffuse. Hence: the wisdom of crowds worked well in the model, but it was our participation of crowds aspect which broke down. Trying to find people willing or capable to take on the offspring (our outputs) of the CH model was hard and/or incredibly time consuming.


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

The Myths About Design Thinking

How You Can Find Out If You Are Truly An Integrative Thinker. Take The Test Now. And Yes, We Are Hiring!

by Idris Mootee

These days I am getting a little bothered with the phrase "design thinking". There is a lot causal misuse but the phrase has gained popularity and currency because it is new, it gives designers new status and it helps to push design firm upstream and hopefully they can solve bigger problems with design ideas. I am as guilty as many and I do like the phrase because it gives new meaning to a thinking style that are suppressed or often ignored in the boardroom or in executive meetings.

But there's a few myths and people assume anyone who is working as a designer or received a design education is naturally a design thinker. That's not true. It is like saying anyone who graduate from a business school with an MBA is naturally a strategic thinker. I can pretty much guarantee you that's not true, having hired more than 500 MBAs in my career. Many strategic thinkers are non MBAs. But MBA helps.

What makes a person a design thinker? And what makes a person a strategic thinker? First myth, design is not the domain of designers. Design (beyond form and function) encompasses a broader set of influences and is (should be) part of any complex decision making process. Designing for Social Change; Designing for Business Transformation; Design for New Organization Structure; Design for Social Participation; and Design for Strategic Agility etc. Most of these are beyond the training of designers and many great traditional industrial design companies. This is not about designing a cute logo or poster or chair.

Second myth, design does NOT replace analytical analysis. It is true to say that analysis alone cannot solve some of the wicked problems that are immensely complex in nature, but without analysis we can't even pinpoint the problems. I'll admit I am a "Deductionist" first and I am also a "Creative Artist". I probably use the logic of necessity or the logic of probability to support my day-to-day decision making more than I use my creative thinking. It is most powerful when I combine the two... and with a little artistic flair.

Unfortunately our societies (and school systems) like to lead us to think we can only be good at one. I am an example. I am good at both and I think many others are good at both without knowing it. There are many examples out there. John Maeda is one good one.

It is an education system problem, It is how we want people to think - you are a creative person or you're an engineer. I believe everyone has the potential to be good at both (and sometimes people are bad at both, that's another discussion).

In additional to creativity and analytical thinking, there is a third component - style and elegance. OK not all designers have style and can design in an elegant fashion. This is the third myth. I am guessing (from my past experience) that only 35% of designers have styles. The others are just design technician. And probably only 3-4% of MBAs have styles, that's a pretty high estimate? It may even be lower.

Designing itself is an extreme activity. So is strategizing. Both tends to call on all those engaged in the process. It is contextual. It is embodied. It uses the whole person's mind and body, left and right brain, economics and empathy, hearts and minds, analysis and expressions, elegance and structure. So what are you?

Our resident scientists and anthropologists have spent months designing an application which was originally used as part of Idea Couture's recruitment process. As you know, we pride ourselves as D.School and B.School thinkers and that's how we bring innovative solutions to clients' wicked problems. Now we decide to open it up and allow you to do the test and share the results with your friends on Facebook.

If you get very high D.School and B.School scores, you really should contact me asap. The next step of the test is a little more complex and will require some attachment of sensors to your head while we show you some power points, you don't need to know more about that for now. And if you unfortunately get very low scores on both, I suggest you get some immediate counseling.


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Don't Believe the 98% Innovation Failure Rate

It Is Just A Myth. Here Are My Top Five Innovation Tips.

by Idris Mootee

Innovation is hard in many ways. What is hard about innovation? Finding new ideas is not hard. Building an innovative culture is hard. Turning ideas into product/services that people love is hard. It all begins with a piece of paper and a pencil. Innovation is hard because there are so many myths about innovation and consultants are selling snake oil. Innovation is not something that is taught in MBAs and not part of any MFA curriculum.

You can look at it from a process view, a strategy view, an organizational view and a toolkit view. Everyone's journey is a little different and what works for one organization may not work for another. There is no one size fits all solution. Creating an innovation culture is easier said than done. There is no magic bullet for creating innovations, but there are many ways to develop a culture that encourages innovation. Developing an innovation culture takes a lot time and many companies have the will but not the time, you need to look for help externally. What will bring the organization together overnight to translate product and service initiatives into sustained results? The process one is a tricky one and here are some quick tips:


1. Challenging Orthodoxies And Overcoming Dogmas.

This is an important starting point and no good ideas will be seriously looked at without overcoming thee orthodoxies. There are orthodoxies in service such banking, healthcare and hospitality as much as in products such as CPGs, consumer electronics and personal care products. You can start with challenging your own orthodoxies or look at industry level dogmas. Think media, music, computing, beverages, travel etc. Forget the value chain for a second and start playing Lego. Challenge everything!


2. Participative Design and Co-Creation.

The customer is King, Queen and Jack. Any innovation efforts will fail eventually if the end user is not driven to use your new product or service. Most consumers are intelligent and can contribute so much to the process. It is true that people can not always voice their needs and desires in a way that makes sense, but our job is find creative ways to understand their attitudes, values and behaviors and figure out how to include them in your innovation process.


3. Innovation Sponsor and SWOT Team.

The majority of innovation teams start when a mandate from the CEO and followed by the appointment of an executive sponsor. Without top level support, you may never get the resources needed to get things done.

Even a CEO have challenges finding the resources to invest in innovation, if there are multiple established businesses, the P&L owners of each of those businesses are going to fight for resources. The CEO often must take dollars away from yesterday's businesses and give them to future's businesses and untested ones. That takes guts. Innovation is not for everyone. Majority of people are not ready or motivated to make innovation happen.

When putting together your innovation team, pick people from across different functions and business units, find people who have nothing to lose in their careers and willing and ready for some risks. People who have imagination and who have always been acting as the voice of the customers. Start with a small team and gradually expand to add more people. At some point, you will be ready to make this an organization-wide undertaking and ready to harness the collective creative energy of people from all parts of the organization.


4. Demonstrate Progress Often and Show Them the Prizes.

Any innovation efforts cannot be done in a black box, these activities should be tracked and measured. The quality and quantity of foresights and insights, the number of unique idea contributors, the total number of ideas generated and total number of ideas that have been prototyped, etc. And when you do get a big or small win, make sure you communicate them across the company. Innovation needs publicity.


5. Defy The 98% Failure Rate Myth.

A client of mine once told me that their success rate of innovation was 90%. I immediately felt off the chair and responded that it was probably because there weren't any real innovation at all. People in the room laughed as I explained that they were most likely talking about some incremental improvements and called them innovation. On the other side, when people say their failure rate is 98%, I would think that they're simply not doing it right and probably lack a systemic approach of scanning, visualizing, imagining and early commercialization of ideas. If you do it right, your failure should fall below 70%. Yes, failure is part of any innovation process, but improving the chances of success is also part of an innovation strategy.


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Does Real Competitive Advantage Lie in Complexity?

Or are large businesses becoming too complex to be managed and their business models too hard to understand?

by Idris Mootee

My friend Mark Ury sent me a link to a piece on "The Collapse of Complex Business Models". I couldn't help but put my thoughts on the next post. There are so many myths about business strategy and business models. People used these words casually.

What is a strategy? Difficult question indeed and often a business strategy is very complex. Sometimes they are very simple, the business strategy for Walmart is to buy cheap and sell cheap and create market power based on scale and probably the most advanced supply chain information systems (and the lowest possible operational cost structure). The business strategies for Google, Sony or GE or Apple (with the exception of Jobs himself) are complex indeed and even senior executives inside the company may not be able to articulate them in 15 minutes.

Strategy is so closely linked to strategic foresight. The question of how much visibility one can have into the future and how different futures can have impact on business models. It is a matter of foresight horizon, that is how far ahead, and how much disruptions are showing up under the radar. And how much complexity an organization's system can handle. When the very structure of the firm's world is undergoing rapid change, and interpretations about company business strategies and firm boundaries are characterized by ever increasing ambiguity, in that case the foresight horizon can be very complex.

I believe that strategy in the face of accelerated change and complexity should mean organization learning the on-going new practices of strategic foresighting, it is the scanning, interpreting, sensing and constructing the relationships that comprise the universe in which the firm acts or reacts. The many different parts of an organization that foster generative relationships within and across their boundaries - relationships that create new sources of value that need active re-imagination and re-configuration.

Business models are usually not the sole source of competitive advantage and value because of the reason that they can easily be copied, and many believe that is should be kept secret. But is is almost impossible since employees, financial market analysts and business partners need to understand the business models. In the modern information age where business activities are becoming more transparent, it is naive to think that you can run an effective business where only the top executive team can have a deep understanding of the business, or where partners or suppliers "don't need to understand what we do". No one can keep a company's business model secret for long (if at all).

People talk about how business strategy is so complex these days and how most strategies are difficult to understand and/or to manage from a risk and operations perspective. Often it is these complex ecosystems that hold value and make it hard to be replicated. Strategic competitive advantage is created by the combination of strategy, culture, systems, brands, products and services and the by the people that operate throughout the organization. This creates a complex ecosystem that extends beyond the boundaries of the boardroom and indeed the business units.

Many large organizations are so complex that it is hard to fully understand what's going on, particular if you take a system view. They are almost on autopilot. These big enterprises have software systems that interact with specialist systems that form the central nervous system of an organization. But, there is a problem when software behaves in unintended fashion when they get too big and there are too many. There will be unpredictable system behaviors when something is triggered and creates ripple effects. Whether software is to blame for Toyota's recent crisis or not, it does raise a critical question: is software complexity out of control and what toll will its inherent bug exposure exact when millions of lines turn into billions or tens of billions.

The question goes beyond software to that of larger enterprises' decision making processes - everything today is too complex. There's a good piece written in the Boston Globe arguing that some systems, like some businesses, are too complex to be allowed to fail - and therefore this complexity should be averted or abolished in some way by regulators. The idea, in a sense, is that dangerously complex systems are too complex to exist. And bigness is an implicit culprit.

While some talk about the collapse of complex business models, there is a philosophical argument, from an investor point of view, about whether it is better to invest in companies whose business models are easy to understand versus those that are overly complex. But complexity can also be an advantage, and often a very big one. Companies that are successful in leveraging advantageous complexity and eliminating disruptive complexity in their business strategy can enjoy a sustainable competitive advantage over others. In fact, research shows that there is a direct correlation between the successful management of complex business operations and overall company performance and return on capital.

Which do you favor, simplicity or complexity?


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

What Is White Space Mapping?

Beyond the core and adjacencies, how do we identify and map out the most relevant elements of future competitive space?

by Idris Mootee

When people talk about exploring white space in innovation, often they refer externally to unserved markets or businesses that are outside their core. It is basically where unmet and unarticulated needs are uncovered to create innovation opportunities. White space is where where products and services don't currently exist based on the present understanding of values. White space is also a tool that allows us to look at the landscape with new lenses. White space can moreover be defined as a unique set of attributes, identifying new openings where your competitors currently aren't focusing or it is being considered part of what traditionally considered a remotely different industry.

White space is also an important outcome of a customer inquiry and discovery process that leads to new profit growth opportunities by defining potential gaps in existing markets. This process can be used to identify entirely new markets. It can also be used to map incremental innovation in products or services - new source of customer value that can be translated to economic value.

Many are reluctant to enter any white space because of the unknowns. Some can cannibalize existing products or services and some require a very different business models. And some require extensive system design and support. As a result, no one wants to take any risks and naturally retreated to their core and close adjacencies. Deciding what's the core is an art and then deciding what's considered adjacencies is another art. Do we look at the core from competencies, brand or assets?

How do we use white space mapping? The first step in the white space mapping process is to determine if you will approach it from an internal or external perspective.

Externally focused, the process begins with mapping the market, products or services based on whether these markets are currently served, underserved or unserved. The goal is to find gaps in existing markets, product or service lines that represent opportunities for your business. Some of these gaps may be opportunities with little or no competition. Others may identify non-consumers. Still others may uncover an entirely new market space that has the potential to transform your industry.

Internally focused, white space mapping becomes an inward looking tool to map your company's ability to address new opportunities or threats and how efficiently and effectively it can react to these opportunities from a process, systems and structural perspective. In this scenario, white space mapping becomes an instrument to identify barriers to your company that inhibit it from pursuing new products, new markets or threats unless a new business model is developed.

As markets mature, competition intensifies, new technologies are invented and new consumer behaviors are constantly emerging. As such, white space mapping is becoming an important strategic exercise for organizational learning and strategic planning as organizations actively look for new sources of differentiation. For a company to remain relevant over the long term, it must respond to these shifting conditions intelligently and white space mapping needs to be part of their strategic planning efforts.


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Messy But Successful Social Media

Social Media is Very Complex and Social Relationships Online are Messy and Erratic. But it Works When You Know How to Use It.

by Idris Mootee

Remember the saying about advertising that "I know half of our advertising spend is wasted, I just don't know which half?" I first heard about this quote 20 years ago and I think it is from 19th Century merchant John Wanamaker. I think I can comfortably say "I know 80% of my advertising spend is wasted, I just don't know the alternative..." The problem with TV and print advertising today is that it informs rather than sells - it rarely engages with consumers at all. Online ads are worse and currently lacking in brand advertiser value and their creative formats are outdated and ineffective.

What about social media? Consumer perceptions, social relationships and human behavior are messy, erratic, and maddeningly unpredictable. The debate on the effectiveness of social media to build brand and provide effective reach is ongoing. When marketers want to reach and engage audiences of social networks such as Facebook, they have two choices: buy advertising or start a social media viral campaign. Advertising on Facebook is of limited use we all know it. How often do you read or click on any ads on Facebook? But we read the wall, we click in the links published by friends and go to Cafeworld to pick up gifts. These connected worlds are like new found oil hotspots. It is not only important to understand who influences purchase decisions in online communities but also the degree of impact. I don't think we can use a broadcast paradigm if we really want to understand what it means.

Idea Couture's senior interactive designer Jackie Siddall was featured in the Wall Street Journal earlier this week. A WSJ writer discovered her story in our Noodleplay site and decided to publish her story. It is an very interesting one. It is about how Jackie was prompted by a Twitter post by the retailer that led to her purchase of a folding kayak for $1,900. She doesn't use that go to work, she rides a bike...summer, winter or fall.

The vessel was one of about just 600 sold in 2009 by Folbot Inc., a small retailer in Charleston, S.C. "You can't buy that exposure," says the firm's co-owner, David AvRutick, who claims the incident speaks to the value of using social media for marketing when he was interviewed by WSJ. Mr. AvRutick says he dedicates about an hour a day - could also go to waste.

Mr. AvRutick says he regularly searches Twitter for tweets that mention kayaking and then sends messages to the people who wrote them. He connected with Jackie, the blogger who credited Twitter for exposing her to Folbot, after she posted a tweet that mentioned she wanted a kayak. Jackie later asked Mr. AvRutick via Twitter if he would send her some photos of her folding kayak being made, and he provided about 20. After it arrived, she says she decided to write a blog post about the whole experience.

Let me see if this works for me. I am looking for a Leica M8 so I will be posting that and see of anyone would contact me through Twitter or Facebook. Many brands are embracing social media. One success story is Starbucks. Starbucks official full-time tweeter is Brad Nelson and Starbucks isn't just any brand on Twitter, with Brad at the helm, they're doing many things right. A former barista, Brad is now manning the Twitter ship and he's responding to questions or mentions of Starbucks, trying to help customers find resolutions to their problems, and putting out fires left and right. Twitter will soon be part of a company's call center...scary.


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

I Love My iPad Mini

So There is No Reason Why I Won't Like My iPad. Just Add A Camera.

by Idris Mootee

Some are comparing the iPad to Netbooks, but it is not a fair comparison. I don't like Netbooks myself. I used to have a Sony one 14 years ago. It was a very powerful mini notebook with a built-in camera (a first at that time). It costs me $2,300 when I purchased that from a now bankrupt computer store chain in San Jose. It was a good one except keyboard was too small and battery life short. According to the guy at a local Best Buy store, 8 out of 10 Netbooks sold are returned. I am sure that's not the case in Asia. I think many people have the wrong expectations, and are not aware of the limitations of Netbooks.

There was one kid working at Best Buy who asked me if I like the iPod Touch Jumbo, he was referring to iPad. I said I like the iPad mini (iPod Touch) that I have now, so I think I will like the iPad. The only disappointment for me is the lack of a camera, because I think if I carry that all the time and being able to use Skype is great plus. It doesn't add much to the cost. The camera needs to be in the front obviously. It is still a little heavy; adding 1.5 lbs to my Louis Vuitton briefcase is pushing it. No video output is a negative; the other Lenovo Ideapad I bought has an HDMI output. The Lenovo tablet is a pretty good one with robust design for business use. Even with many criticisms, iPad will be an isntant success. I guarantee you the iPad is not another Newton.

iPad preorders are pouring in. Investor Village's AAPL Sanity board (subscription needed) noted that iPad pre-orders dropped from an estimated 25,000 per hour on Friday, the first day of availability, to around 1,000 per hour over the weekend. For the three-day period, the cumulative total was estimated at 152,000. That's pretty good.

I think the iPad will open up opportunities for print media and help shape portable media experiences. I can't read magazines from my Blackberry of iPhone, but with the iPad, it is a different story. The iPad platform has more than enough screen real estate and resolution to build interesting media sharing and communication experiences. Of course we have choices of other manufacturers - Microsoft, Sony, Samsung, Lenovo, and almost everyone else, are all working iPad-like devices - in addition to those who have products in the market (such as Amazon).

Microsoft's Courier is an interesting one, currently in "late prototype" stage of development. At least they are not making the tablet mistake, the dual 7-inch screens are multitouch, and designed for writing, flicking and drawing with a stylus, in addition to fingers. There is a camera at the back too (sorry Apple). Currently, Microsoft is working on the user experience and showing design concepts to outside agencies. Microsoft's tablet heritage is digital ink-oriented, and this interface, while unlike anything we've seen before, clearly draws from that, its work with the Surface touch computer and even the Zune HD.

Sony is doing some catch-up although they are stuck with their paradigm of competitive advanatage. The Wall Street Journal reports that Sony is working on a device that's described as being part Netbook, part e-reader and part PlayStation Portable. Sources within the electronic giant also report that Sony is working on a "PlayStation Phone," which would be capable of downloading and playing PlayStation games. Sony needs help.


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Your Smartphone Could be a Spy Phone

It can broadcast your location without your knowledge. There's no place to hide.

by Idris Mootee

I was watching Eagle Eyes last weekend, I was thinking what happened there is actually not unlikely - we're being watched every second. Forget about PC spyware, they're nothing compared with mobile phone spyware that enables call- and text-monitoring. But worst of all, mobile phone spyware allows anyone to tap into the phone remotely and activate its microphone, even when it is turned OFF.

So It doesn't matter if you have an iPhone, Blackberry or any Android phones. These spyware programs are not expensive (often free), or difficult to purchase or install. Your smartphone can also tell your location. We all need our mobile phones, so now there's no place to hide. There are several spy services out there for people who are desperate to monitor their children or employees. Companies such as Mobile Spy will help you monitor their call, mobile web browsing and text message activities. You can just log into your Mobile Spy account from any computer and see everything - including GPS locations too! Scary!

One popular spyware for mobile phones is Flexispy. It comes in four packages, with the high-end Flexispy Pro-X having features such as live-call listening, secret mobile GPS tracking, SMS message reading, phone call history, email, and the ability to secretly listen in on the phone's surroundings. The entry level product is Flexispy Bug which allows remote listening only. It turns your phone into a bug so someone else can listen to everything.

Are you safe? Probably not. A quick way to check if you phone is bugged, look for sudden drop in battery power, and then unusually billing activity with random numbers. If you for whatever reasons need to engage in a secret conversation, take the battery out of your smartphone.

As early as 1997, the National Reconnaissance Organization warned that any mobile phone can be turned into a microphone and transmitter for the purpose of listening to conversations in the vicinity of the phone. This is basically done by transmitting to the mobile phone a maintenance command on the control channel. This command places the mobile telephone in 'diagnostic mode'. When this is done, conversations in the immediate area of the telephone can be monitored over the voice channel. This diagnostic mode was originally designed for remote software update. Now with GPS, not only they can listen in, they can locate you within feet. So, when do they start making anti-spy software for cell phones?

Don't expect these privacy risks to go away. The reality is all governments have no desire to fix this problem or to make these products illegal. The more they can find out about you the better protected they feel. It is like 1984.


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

The Dangers of Design Research

by Idris Mootee

What is design research? It is generally referred to as the upfront contextual inquiry work that designers perform before they start ideation. Sometimes it involves some light ethnographic work and some interviews, but it is often not structured, comprehensive, or rigorous. Design research emerged only in the late 1960s with the goal of improving how we see consumers use the product and look for ways to improve the effectiveness of a product. It is pretty much a human factor investigation and is now widely practiced, but is now facing a few serious challenges.

Design research is more than just a design tool, and the truth is that 80% of the time, they are not designed and conducted properly.

The emergence of transdisciplinary design is changing what skills are needed by those who undertake research design. These required skills go beyond improving a physical product and now include knowing how to build the voice of customer into the design research process, either directly or indirectly. The ability to collect data is not the critical activity, but instead it is the ability to decode visual and non-visual data and translate emergent issues into concrete, actionable insights.

The effectiveness of design research is determined by the research team's ability to translate identified functional and emotional characteristics into unique innovation drivers. Ineffective design research activities are often characterized by the presence of assumptive decision-making, lack of immersion into the consumer's world and undifferentiated innovation drivers. Design research is lesser known than traditional market research among marketers, and they often misuse it as a market research tool instead of applying it as a product development or innovation tool.

Many organizations are only beginning to use an receive the full benefits of design research. Many see it as an unnecessary cost because the people who performed it in the past did not do it justice. Improperly done, many of the presented outputs are useless and unactionable. There are many reasons for this. First, most designers are trained to observe the insights for the purpose of applying them directly to their work, but are poorly trained to codify these insights, while also lacking the writing and analytical skills to make sense of what they see. Second, observation research and individual contact is very consuming, particularly when you need to see them performing non-daily routines. Feeding useful data input into the creative process is a critical skill, one that is an "intuitive learning process." During this process ideas 'evolve' or 'mature' and lead to the improvement of the previous idea.

Design research at Idea Couture is not just an observation exercise; it is often a participatory exercise. I can't talk more to our proprietary methodologies, but they are a lot more than just sending in two designers to learn about how a consumer uses a product. It is not productive to do that. Cross-disciplinary teams perform design research at Idea Couture and consider issues from multiple perspectives - from anthropological to human factors and brand influences. Design research for us is the starting point of reflective collaboration, getting D-School and B-School collaborating to solve wicked problems. It is fun. Designers often like the idea of involving users early and generally hate focus groups. Unfocus groups on the other hand are hard to manage and often discussions get side-tracked. Involving users is always a good idea, particularly when you need to gain a deeper understanding of cultural issues - such as lifestyles and wider issues beyond functional details. This is why you need anthropologists.

It is interesting to see that the contextual inquiry hype has been migrating toward the participatory/designer-led corner of the design research space the last few years as design-led methods such as visioning and storyboarding have been added to contextual inquiries. Finally, a lot of designers have difficulties moderating an unfocus group evaluation for a product idea that they designed, as the personal aspects involved often cause some uncomfortable situations. You can see why design research projects are so difficult to design and conduct properly.


Don't miss a post - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

2010 - Beginning of a Touch and Gesture Future?

by Idris Mootee

With the proliferation of multi-touch technologies and innovations, we face an exciting new future of physical interactivity that will be like doing tai-chi.

Will multi-touch become the mainstream interactive experience on small devices? The holy grail of touch interactivity is bringing together the simplicity of hand gestures with deep navigation. Will multitouch create a new user language much as we learn how to type? Imagine when multi-touch is deployed in home appliances such as washing machines and microwave ovens? Gestural commands can be much less obvious to users than those written on buttons and menus and can create a whole new set of challenges. It means more challenge for human factors people.

It is interesting to envision how a broad-based, mass-scale utilization of the technology beyond the iPhone/iTouch/iPad/iDesk. I want to see a digital desk where there are no computers, the surface is the computer and my smartphone connects to the cloud. And I want the desk to look like a Herman Miller Sense desk. I want to have a built-in Skype conference call widget and... oh yes, Facebook on my desk. I guess we need to retrain ourselves to use this, as we need to create a set of hand gestures standards in order to be productive with our digital desk.

Asus already has a dual-screen laptop, still in concept stage, but with a touchscreen instead of a keyboard, opting for a virtual keyboard just like the iPhone. This is a step towards the digital desk. The dual panel offers a flexible working space in which users can adapt to suit their prevailing usage scenarios, for example adjusting the size of the virtual touchpad and keyboard. Through hand gestures, handwriting recognition and multi-touch, users are given with a control surface that is both flexible and intuitive.

The touchscreen display market will be growing from US$2.2 billion this year to US$3.4 billion in 2014 according to NanoMarkets, a research firm. The growing demand for touch-screen technologies in mobile and portable computing will create new opportunities for suppliers of conductive coatings, substrates and sensors in addition to the display firms themselves. Mainstream display makers have begun to develop their own "in-pixel" technologies as an alternative to the current industry practice in which third-party suppliers add a touch sensor subsystem on top of an LCD display and then sell to OEMs. Instead of supplying companies such as HP, LG, Samsung, Toshiba and Sony, these mid-size touchscreen OEM manufacturers may end up competing against them. These companies include FlatFrog, RPO, Microsoft, NextWindow, TouchCo and Vissumo.

In the next 24 months we can expect to see the increasing prevalence of physical and gestural interactivity, beyond the Wii and the iPad. One thing for sure is that we're all going to be dealing with the fun as well as the challenge of interacting with and designing devices in different ways. One big challenge is simply due to the lack of transparency into the "commands" or actions available with a given device or environment, we don't see a switch in the air and there is nothing for us to touch.

Looking into the exciting new future of physical and special interactivity, we will need to create idioms and new vocabulary that are as discoverable and useful as possible. We will find out in 10 years time whether these new touch-based interactive paradigms such as gestural interfaces will be making life easier for us or creating a new interactivity divide between those who can use it and whose who gave up on it. Instead of learning to type like my parent's generation, the next generation may be learning how to do the 'tai-chi' of interactive gestures. Human Factors guys now need to learn tai-chi.


Don't miss a post - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

How Profitable are the iPad and Kindle?

by Idris Mootee

How much money are Apple and Amazon making from selling the iPad and the Kindle?

Get ready for the iPad to come to an Apple store near you, and for iTunes TV show downloads. Apple will be offering US TV shows for $1 each, as reported by the Financial Times. This coincides with the scheduled release of the iPad sometime in April in an attempt to boost adoption and pull sales through the channel. TV episodes are normally $1.99 for standard-definition and $2.99 for high-definition through iTunes. There was talk before the iPad launch that Apple might at last introduce an iTunes TV show subscription service, but it never happened. I am sure that is still on the table, but there are no further details about when this could come together.

Some wonder how much money Apple can make with the iPad. Obviously the higher end models are usually more profitable for Apple, and the iPad is no exception. I've done some quick and dirty research with OEM suppliers and whipped up some estimates. The high-end iPad model with 3G and 64 GB of storage will retail at $829 and produce a profit of $455 for Apple (and retailers), while the low-end iPad model with 16GB of storage (and no 3G) will retail at $499 and bring a profit of $213. My assumptions for marketing and customer support costs total $15. I have not included in the calculations any volume discounts that Apple might grant to corporate or educational buyers.



I have yet to confirm the components configuration but am using industry's current suppliers' prices. These costs will come down when volume increases, and memory prices fluctuate. The display is the most expensive component, followed by the NAND flash memory. If you drop your iPad, I am guessing the replacement cost would be $250-$270, although the net cost is $76 excluding labor. I've also included a quick comparison with the Kindle DX, which is not an apple-to-apple comparison, and is just there for reference. Kindle doesn't have many of the expensive components that the iPad has, but is an elegantly designed book reader. Remember the basic rule of design? Make sure you do at least one thing really, really good. Kindle makes the downloading experience so easy. Anywhere in the world, your 3G can work to download books in the background.

All cost calculations here are based on our estimates only, not sources from Apple or Amazon and no one has confirmed if these numbers are close or off. I think they are close.

Considering the Kindle DX selling for $489 produces a profit of $297. There are costs for some free content not included in the Kindle DX costs. There will likely be many iPad clones in the market selling in the $180-$250 range. The margin for iPad clones will be as thin as $30-$40, but you can't really compare the iPad with those poor cousins. Let's see what the iPad's net contribution to Apple will be by the end of the year.


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Will Spiderman be real soon or is it just hype?

by Idris Mootee

Every time there is a new product launch, there is always hype around how innovative the product is. Not all innovative new products deliver on the hype like Apple. Although the Segway was a big engineering achievement, it didn't live up to the hype. Its sophisticated system of dynamic stabilization certainly showcases electronic engineering excellence and did deserve some hype, but not to the level it soared.

Paul Graham's recent essay about why the Segway failed to change the world is interesting. He focuses mainly on the fact that the Segway basically makes people look dorky - and that a better design might have helped more people find it enticing. But at the end he notes:


"Curiously enough, what got Segway into this problem was that the company was itself a kind of Segway. It was too easy for them; they were too successful raising money. If they'd had to grow the company gradually, by iterating through several versions they sold to real users, they'd have learned pretty quickly that people looked stupid riding them. Instead they had enough to work in secret. They had focus groups aplenty, I'm sure, but they didn't have the people yelling insults out of cars. So they never realized they were zooming confidently down a blind alley."


The Segway Human Transporter (HT) was no question one of the most hyped engineering projects of the last 12 or 30 years. Starting with "managed leaks" to the press, the secret $100 million "Ginger" project that VC John Doerr said "could be bigger than the Internet." I can't think of anything bigger than the Internet. People then were guessing it was some sort of space program.

Apple's new iPad was also very hyped before it launched. It is a great product no question, but essentially the iPad is a big iTouch, or iPhone, doesn't have a camera, doesn't use facial recognition and doesn't have any advanced interactions design or high definition video.

But not all interesting ideas get over-hyped...

Here's a good idea which has the right ingredients for hyping up. A bunch of engineers have invented an adhesive technology has taken its cue from the gravity-defying gecko, but the Cornell team looked elsewhere - to a beetle native to Florida that can stick to a leaf's surface, through wet adhesion, with a force 100 times its own weight. What does this mean? We are talking about the possibility to mass-produce Spiderman capability. Cornell University researchers Paul Steen and Michael Vogel are working on a palm-size liquid-adhesion device that could enable movements just like Spierman's arachno-riffic moves. The design is based on bonding methods observed in the beetle. Their research was funded by the Defense Advanced Research Projects Agency (DARPA) and the National Science Foundation.

The first application may be for the military. It is highly likely that there will be a 'Spiderman' team. Not sure they will adopt the stretchy red and blue tights. The mechanism includes a flat metal plate with micron-size holes and sits atop another piece holding a liquid reservoir. In between is a porous layer. An everyday 9-volt battery pumps tiny droplets of liquid through to the top layer and the surface tension of the exposed drops makes the device grip another surface. Just make sure you don't run out of battery while you're outside 29th floor of a building.

Many science and technology innovations are hyped by the media. Nanoscience and Nanotechnology are hailed as some of the most exciting areas of science with promised to our current and future problems. But translational research in the emerging areas of nanoscience and nanotechnology is sophisticated, complex and expensive and the hype around the technological advance often overstates the applications of nanotechnology. But in this case, Spiderman may soon be real...


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Are MBAs becoming irrelevant?

by Idris Mootee

Are business schools preparing students for a flat world where organizations and national boundaries are becoming blurred?

Looking at this year MBA rankings by Financial Times, there aren't many changes in the Top 10 list. The surprise is that #10 is a Hong Kong Business School and #12 is an Indian Business School. Other top schools (some are more local) in the rankings: IMD (Swiss) ranks 15, HEC (French) ranks 18, CEIBS (Chinese) ranks 22, Haas (American) ranks 28, Cornell (American) ranks 38, Ivey (Canadian) ranks 49. Here's the latest FT Global Top 10 MBA Rankings for 2010:

1. London Business School
   
2. University of Pennsylvania: Wharton
   
3. Harvard Business School
   
4. Stanford University GSB
   
5. Insead
   
6. Columbia Business School
   
7. IE Business School
   
8. MIT: Sloan School of Management
   
9. University of Chicago: Booth
   
10. Hong Kong UST Business School

There are a lot of criticisms around MBA programs on different fronts. I was advising some folks that this is still the best all round business education. The last three months, I have written 4 recommendations for some folks. One was accepted by London Business School, one by Stanford Business School, one by Chicago Graduate School of Business and one by MIT Sloan. I am happy for all of them. I still think it is one of best paths to change the world.

There are arguments around whether it needs to be two years and almost all European MBAs are one year with only exception of LBS. The traditional two-year MBA curriculum, grounded in the core functional disciplines — strategy, marketing, organizational behavior, accounting, finance etc. — has been in existence since it was first pioneered in the US in the late 50s. MBAs were very much an American thing. US companies placed more value in an MBA than European companies. In the UK, a general management program combined with solid work experience is generally accepted to be sufficient.

The world of business is on the verge of transformation, a transformation, and so should business education. Where technological advance, geo-political forces, rapid globalization are all putting pressure on the business education system. I attended an event a while back at the Yale School of Management; there were 20 education institutions from around the world all struggling with the relevance of the MBA to 21st century organizations. Everyone sees the need for transformation but not many knows what and how to transform. Asking any B-school's Dean the question how their business schools must change to better prepare our students for the challenges that they will face in a hyper competitive and uncertain world is a good start.

Yes the world is flat. Organizations are becoming increasingly flat, and social technologies are blurring the boundaries of a corporation. Leaders of modern enterprises competing in the global economy need to look for truly global managers who are capable of leading and managing across the boundaries of function, geography, and organizations and industries. Are business schools ready for this? Or should we change the old paradigm that an MBA is an elitist qualification which can enable the holder of the degree to fast-track his/her career to power and fortune? An MBA should mean less as a qualification. It is a sense of empowerment and commitment for an individual to take on big challenges, transform oneself and create win/win strategy for shareholder, employees and societies.

Check out the lively discussion that has broken out in our Continuous Innovation group around this article - http://ow.ly/16hTy (join the group and see the 30+ responses)


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Rethinking the Design of Kitchen Appliances

by Idris Mootee

My kitchen is overcrowded. There is no end in sight as we continue to invent new kitchen gadgets.

I have always wondered why many small kitchen appliances are so poorly designed both in form and function. Cooking is an art form and the appliances should reflect that. I've spent an hour at John Lewis' basement looking at their kitchen appliances. John Lewis' has better designs than what we see at Sears or Macy's. I guess B&O should start designing toasters.

Last year Electrolux Icon appliances and Interior Design Magazine held a competition with winner Marcello Zuffo's futuristic kitchen that featured movable components that can be reconfigured to adapt to the task at hand and incorporated a contemporary sculptural component contrary to a typically rectangular floor plan.

Designing a kitchen is an art, combining form and function while reflecting on the personality of the owner or designer. The kitchen has now become a place which is as much for cooking as it is a place to entertain guests while preparing a meal. Designer kitchens have been sprouting for decades now. More and more homeowners have been renovating and remodeling their homes to include designer kitchens. In kitchen designs and even appliances, Europe is at the forefront of kitchen design and designer kitchen innovation. In the US, unless you're prepared to throw a lot of money at the problem, you're pretty much stuck with some mass-market solution. And then the question is do you want stainless steel? It that going to go out of fashion soon or it is here to stay? Didn't everyone think black, and then white, were going to be classics?

Anyhow, most of the stuff we see out there in the US is pretty poorly designed. Europe is a little better. But they need to think "system" instead of individual products. James Dyson now wants to compactify our kitchens. And hopefully beautify them in the process. In a US patent application filing, Dyson and his colleagues Peter Gammack and David Campbell describe a smart way to save space on overcrowded kitchen worktops by radically changing the design of the gadgets that typically clutter them.

Yes, think "system." The team says the trouble with today's kettles, toasters, juicers, food mixers and coffee grinders is that each type of gadget tends to have a different space-hogging design. Kettles tend to be jug or dome-shaped, with a protruding handle and flex on one side, and a spout on the other. Toasters are generally box shaped, with the timing and toast ejection mechanisms protruding from one end. That means users must leave a large "footprint" around each appliance so that their handles and controls can be reached easily. That's a very smart way to start. Kudos to the Dyson team!

In their patent filing, the idea is simple: make all free-standing gadgets like kettles, toasters, juicers and food mixers in the shape of tall cuboids that can easily be pushed together on a worktop, with no wasted space between them. As the controls could be recessed in their flat lids or on the front panels, no space-wasting side access is required. The patent also suggests connecting the appliances together - presumably using a common power supply. Why haven't people thought of that before?


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Will Apple or Microsoft Dominate Home Energy Management?

by Idris Mootee

Home energy management is hot and I've seen more than a dozen of companies having a very similar approach. It is almost hopeless for small start-ups to play this same, as many deep pockets have been working on this for a long time. Whirlpool and energy retailer Direct Energy have joined forces to showcase what the energy efficient home of the future will look like at the CES. I've seen some cool stuff from them.

I don't think anyone have nailed it yet. Whirlpool Home Energy Manager (HEM) includes appliances that tap into a unified network to communicate how much energy they are using, when, why, and how much it is costing. This type of data transmission is what will eventually make it possible for your clothing dryer to know to turn on after your washing machine has finished the cycle. Or let you finish watching your 7.2 Dolby home movie before the oven starts baking. The goal is to optimize the use the of energy between all appliances.



User experience design is still one big challenge and OpenPeak is doing a pretty decent job. They have an iPhone like touch-screen dashboard to manage appliances to run at certain times, use that to change settings and to display consumption data. There are many other players such as Tendril, EnergyHub, People Power, Control4, and OPOWER. Whirlpool appliances, Lennox thermostats and OpenPeak dashboards together create the product package and Direct Energy will be testing the market in Houston.


The latest player, guess who, is Apple. They just filed an application this week called the Intelligent Power Monitoring that allow people to reduce energy use by giving them tools to manage how connected devices are powered. Users could get recommendations on when to schedule gadget charging to take advantage of off-peak rates, for example. Or the electronics controller could put devices in hibernate mode after a set amount of time. Users could have a display, such as an LCD screen, or a movable projector to control these tasks and monitor electricity use. No question this will be the coolest one.



Apple talks about power management in its patent application as: "Some personal computers sometimes are being left on simply to serve as power supplies for the charging of the aforementioned portable devices via connections, such as USB connections, that provide power in addition to data (rather than charging those devices from the household electric service using their dedicated chargers), even though the power supply of a personal computer is much larger than is needed for such a function, and as such draws much more power than such a function would otherwise demand. As the price of electricity increases, such uses of power can cost users more."



This is definitely going to be another platform play, both from a standard and user experience perspectives. Microsoft is also active in this space and giving away its energy management tool Hohm to consumers for free. Distribution is a key factor here and both Apple and Microsoft has no apparent advantages. Is this going to be Microsoft vs Apple all over gain?


Enjoy this post? Subscribe to our RSS feed and join our Continuous Innovation group!

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

CES 2010 Report

by Idris Mootee

More than 10,000 people attended the show, and funny enough there was another show running next door - the Porn Show. I don't know if were are any vendors who showcased products in both. One thing that deserves mention is Nokia's announcement of the Growth Economy Venture Challenge. Nokia is going to invest $1 million in a developer who comes up with an idea that uses mobile technology to improve the lives of people in the poorest parts of the world, and that the idea doesn't even need to use Nokia technology. I wonder if anyone will submit an iPhone-to-save-the-world idea. The winners will be announced in June and it will be very interesting to see what ideas people come up with.

TV technology pretty much dominated the show with 3D HDTV attracting the most interest. I don't think 3D television will become mainstream anytime soon (if at all). Surround sound was first invented and introduced 30 years ago with two key players pushing different standards, I think they were JVC and... I forgot the other. JVC was pushing CD-4, a proprietary decoding technology to bring four-channel surround sound to the living room. The buzz lasted for less than two years. Only after home theater became popular and affordable 20 years later did that technology finally became mass market. 3D HD TV may be a repeat story. 3D content is an issue, the other is the glasses. I cannot imagine everyone wearing 3D glasses at home, can you? And, the cost is way too high. They are at least 5 years away.

The adoption of innovative technologies has always been impacted by micro-economic determinants, because it has proved to be the most useful in explaining the broad patterns of innovation diffusion. With the top three brands announcing 3D TVs, it is more about competing for noise. Panasonic, which has been promoting 3D for more than a year, expects to be among the first to launch. One of Panasonic's guest speakers was Jon Landau, producer of the 3D movie Avatar, which partnered with Panasonic last year to promote both the movie and 3D technology. Samsung announced that 50% of its LED LCD TV introductions this year will be 3D models, many using a new "inspired by nature" design scheme. The top of the line is the ultra-slim 9000 Series. These sets achieve their svelte profiles by housing the TV's electronics circuitry inside the stand and come with a unique touch-screen Wi-Fi remote that doubles as a second display, so you can watch a TV program on the remote while a Blu-ray movie is playing on the TV.

In the meantime everyone is still making improvements to their LCD TVs - making them bigger, thinner and sharper. LG has some cool technology, such as sound coming from the screen, although for most people, this doesn't matter as they have external speakers for that. But still a cool innovation with sound and visual integrated from one source.

And what is the coolest product? I think it is the Parrot AR.Drone, a remote-controlled helicopter with a twist. It's controlled over WiFi from an iPhone or iPod Touch, and it has a camera in its snout that streams to your iPhone's screen. It is perfect for domestic use to send out to survey your neighbors to get a sense of what others are doing. It is great way to increase your conversation capital and popularity. The thing is computer-stabilized so not too difficult to manage and no training required. Not sure if these are designed as little brothers of the military ones. For $500, you can comfortably sit in your home and fly your drone for 15 minutes before it requires recharge. It gives new meaning to "Neighborhood Surveillance". It will be available this fall.

---

Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.