Do you have an Anti-Creativity Checklist?

by Braden Kelley

I came across Yougme Moon's "Anti-Creativity Checklist" over at the Harvard Business Review after a tweet from @lindegaard and it got me thinking...

In order to build a culture capable of encouraging innovation or creativity (or both), you must first do an inventory of the psychology and mental models in play in your organization.

One great way to do this would be to build an 'anti-innovation checklist' or an 'anti-creativity checklist'. If you start watching the vocabulary that people use in meetings where ideas are being discussed, the behavior of senior leadership as it relates to these areas, and most importantly - how people respond - you'll get a better sense of where your organizational challenges lie with respect to innovation and creativity. Wouldn't that make such an exercise of great value to an organization?




Anyways, as an example, I've pulled out the fourteen items on Yougme Moon's checklist from the video above, which you may just want to watch:

1. Play it safe. Listen to that inner voice.
   
2. Know your limitations. Don't be afraid to pigeonhole yourself.
   
3. Remind yourself: It's just a job.
   
4. Show you're the smartest guy in the room. Make skepticism your middle name.
   
5. Be the tough guy. Demand to see the data.
   
6. Respect history. Always give the past the benefit of the doubt.
   
7. Stop the madness before it can get started. Crush early-stage ideas with your business savvy.
   
8. Been there, done that. Use experience as weapon.
   
9. Keep your eyes closed. Your mind too.
   
10. Assume there is no problem.
    
11. Underestimate your customers.
    
12. Be a mentor. Give sound advice to the people who work for you.
    
13. Be suspicious of the "creatives" in your organization.
    
14. When all else fails, act like a grown-up.

What is on your "anti-innovation checklist" or your "anti-creativity checklist"?

Please feel free to share yours in the comments below.


Related Article:

• Are You Killing Innovation in Your Company (Without Even Knowing It)? by Holly G. Green

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

What's the Best Environment to Improve Innovation?

by Michael A. Dalton

I had an interesting discussion recently with a company vice-president that asked me what he could do in terms of facilities design to make the work environment more conducive to innovation. Anyone familiar with my Theory of Constraints (TOC) based approach to innovation improvement will know that my response was to ask him if the facility was his innovation bottleneck. After getting an unsure look, I continued and asked what one thing was most constraining his organization's new product throughput.

He pondered my question for a second or two and replied, "I guess I'd have to say that it's finding more impactful new product ideas."

That made my response simple. "Then if you want to create a better environment for innovation, get out of yours and into theirs."

He stared at me with a puzzled look for a moment then smiled. "So the internal stuff isn't where I should focus."

Bingo - one of the most impactful things a leader can do is to keep their organization focused on high leverage activities. But internal facilities were far from his biggest problem.

Of course, it's the era of design. So I don't mean to completely dismiss the role that the physical environment and culture can play in fostering creativity. If you're putting up a new building, it's probably worth considering. Having worked in situations where R&D and marketing were located in separate buildings and where they were co-located, I can say that locating them together definitely helps people interact and problem solve more easily. Similarly, I've worked in some cutting-edge facilities from a design and aesthetic view. Who could argue against having views that inspire, lots of open spaces, and ample team meeting areas?

But for most companies, it's really missing the point to make the R&D and office work environment the focus of your innovation improvement efforts. Instead, the important thing is to get people out of the office more often to visit customers and end users in their work environments. That's where the actual problems exist and where the real inspiration for new products will come from!

The best new products solve customers' problems by simplifying or eliminating costly, difficult, time consuming, or unpleasant tasks. These kinds of ideas aren't likely to come to your people while they're in the office. These problems live out in the market. An entire discipline of ethnographic research has grown out of watching users in action to identify these problem tasks. When researchers see these problems firsthand, they get additional insights into the problem that lead to a better solution.

The 3M Post-it is a great example of the how getting out of the office can help create great new product ideas. 3M Scientist, Art Fry, was a singer in his church choir and was frustrated when the little bits of paper he used to mark pages kept falling out of the hymnal. Unfortunately, he couldn't use any of 3M's tape products because that would have torn the pages. Fry invented Post-its when he recalled the poor adhesive one of his colleagues had accidentally cooked up and began using it to make his hymnal markers easily removable.

Customer focused innovation works best when researchers can get out and see the problems firsthand. When SC Johnson researchers observed consumers problems with cleaning the shower, they invented the Scrubbing Bubbles automated shower cleaner as a way to simplify the job. Push the button on your way out of the shower and it keeps the shower clean for you. Sometimes it takes development people with a strong understanding of the technology to see the customers' problem and at the same time envision how they can solve it.

Many companies will struggle with this advice because they leave the customer interaction to sales and marketing. But limiting your R&D group to work on the ideas that others bring in is like asking them to work with part of their brain tied behind their back. Often, these companies come to me saying that they have plenty of ideas, but they just aren't seeing the results they had hoped for out of new products. Well, it's no wonder. Most sales and marketing people focus on selling what's available today. Occasionally they look for opportunities to tweak or customize products. That can create new business but rarely results in high growth new products.


The Simple Bottom Line:

Work environment plays a role in innovation and creativity, but if your constraint is in finding better opportunities, you'll do better to focus externally on the customers work environment. That's where the problems are. If you can connect your development with those problems, that's also where you'll see the most new product impact.


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Mike Dalton is the Chief Innovation Coach for Guided Innovation Group and the author of "Simplifying Innovation" and the Simplifying Innovation Blog. Guided Innovation Group has a simple mission - helping companies turn their new product innovation into more bottom-line impact.

Thinking Fearlessly

by Kevin Roberts

Sometimes in life - boardroom, living room or classroom - we get so scared of failure that we make it impossible for ourselves to succeed. In an economy in reset mode, the unreasonable power of creativity is what will set smart people and companies apart. But the thing about creativity is that it breeds failure as well as success.

That's the paradox. In a jittery economy, people suppress creativity to minimize the risk of failure, and companies often encourage that kind of insular thinking. But it's exactly the wrong approach - if allowed to set in, fear of failure will set an organization on auto-pilot, nose down.

Jonah Lehrer wrote on his blog in December about how psychologists are learning more about how the creative brain functions. He used the example of a simple but powerful experiment among college students. Two groups were told to list as many modes of transport as they could. The only difference was that one group was told the idea for the research came from exchange students in Greece, and the second group was told it came from classmates from down the hall.

Fascinating results. The 'down the hall' group came in with a predictable set of responses like car, bus and train. The 'Greece' group let their imagination run wild, generating far more answers, naming horses, ancient warships, spaceships and, yes, Segways.

The only difference was that one group was given the smallest permission to think fearlessly, and they jumped at it. Lehrer uses this research to argue in favor of the mind-opening possibilities of travel, and he's right. More importantly, it reveals the way the creative mind flourishes in the right conditions, and closes down in the wrong ones.

Fast Company magazine backed this up when they reported the findings of Harvard Business School research into the work habits of 238 creative professionals. The findings revealed that "creativity is positively associated with joy and love and negatively associated with anger, fear, and anxiety." The researchers argue that a fearful or negative workplace environment is an anathema to creativity and that "when people are doing work that they love and they're allowed to deeply engage in it - and when the work itself is valued and recognized - then creativity will flourish."

The lesson is obvious. We need to overwhelm tough times with our boundless and brazen creativity - not the other way around.


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Kevin Roberts is the CEO worldwide of The Lovemarks Company, Saatchi & Saatchi. For more information on Kevin, please go to www.saatchikevin.com. To see this blog at its original source, please go to www.krconnect.blogspot.com.

Part 3 - Three Innovation Distinctions

by Stephen Shapiro

This is the third of my "Innovation Distinctions" entries.

In the first part of this series, I wrote why you should focus on "Challenges, not Ideas." Next, I addressed the distinction of "Process, not Events."

In this final entry, I discuss why innovation requires "Diversity not Homogeneity." Be sure to read the previous two articles before reading this one.

As mentioned in the other blog entries, I first shared these distinctions with a group of speakers and authors who were brainstorming ways to improve the learning experience for other speakers and authors who attend their conferences. Here's the Catch 22: Having only speakers and authors speaking to other speakers and authors does not lead to much creativity. Most of the "ideas" presented are well-worn and don't address the "real world" outside of the industry.

Therefore, my last suggestion to the group was to increase the level of diversity at these learning experiences. This would provide a wider range of ideas, suggestions, and points-of-view.

How does diversity apply to an organization?

Diversity can mean a wide variety of things:

• Diversity of race, creed, color, sex, etc.
  
• Diversity of innovation styles
  
• Diversity of disciplines

I won't address the first point as that has been a topic of discussion for decades. Let me tackle the next two.


Diversity of Innovation Styles

The second point ties directly to my Innovation Personality Poker system.

In the card-based game, I discuss the four primary innovation styles: analytical, creative, planning/action, engagement. Most organizations favor one over another and therefore do not have a good balance of styles. There's a reason for this.

Although homogeneous teams are often more efficient (i.e., you get things done faster), having a bunch of "yes men" working for you is not the answer for long-term growth. When people think too much alike, new ideas struggle to surface. In these homogeneous climates, innovation and growth (i.e., effectiveness) suffer.

The essence of successful companies, then, is the ability to be both efficient and effective. They are able to focus on both production and innovation, not just doing things right but also doing the right things.

There's plenty of evidence that team diversity translates directly into corporate profits. Sigal Barsade and colleagues at the University of Pennsylvania's Wharton business school studied top management teams at large corporations in the United States. Interestingly, the more diverse the functional roles of the members of those teams were, the greater the average, market-adjusted financial return in those companies. Diversity of the top leaders translated into bottom-line results.

In Personality Poker, there are four key concepts:

• You need people in your organization "play to their strong suit." That is, make sure that everyone understands how they contribute to and detract from the innovation process. This includes ensuring that you have the right people with the right leadership styles in your organization.


• As an organization, "play with a full deck." You must embrace a wide range of innovation styles. Instead of hiring on competency and chemistry, also hire for a diversity of innovation styles. Every step of the innovation process must be addressed. You need people who are great at conducting research, delivering results, developing plans and reports, building relationships, and creating new ideas, amongst other things.


• "Deal out the work." That is, you must divide and conquer. You can't have everyone in your organization do everything. Instead, get them to divvy up the work based on which style is most effective at a given task. You can't have everyone generating ideas, or focusing on planning.


• Recognize that in order to treat everyone the same, you must treat everyone differently. People have different needs in terms of how they like to be managed, how they like to be praised, and how they want to contribute to the organization. In order to attract and retain a well-balanced organization you must be prepared to treat people as they want to be treated. To do this, you must overcome the inertia of your company's personality and embrace the needs of the individual personalities.

I could write a whole book on the value of diverse teams. Oh, wait, I did! My Personality Poker book will be published by Penguin's Portfolio imprint Fall 2010. Throughout, I provide examples of, and evidence for the value of having a diversity of "styles" within your organization.

But what about the third type of diversity: The diversity of disciplines.


Diversity of Discipline

A discipline is any area of expertise like biology, chemistry, physics or mathematics. You can have an organization comprised of diverse innovation styles while sharing only one discipline.

A while back, I spoke with Al Bredenberg, Senior Researcher from ILO Institute. He subsequently wrote an excellent blog entry on the topic of diversity where he quotes me. He also mentions a Harvard Business Review article by Lee Fleming that suggests that companies with less diversity of discipline produce better overall financial results than highly diverse ones.

"The financial value of the innovations resulting from such cross-pollination is lower, on average, than the value of those that come out of more conventional, siloed approaches. In other words, as the distance between the team members' fields or disciplines increases, the overall quality of the innovations falls. But, my research also suggests that the breakthroughs that do arise from such multidisciplinary work, though extremely rare, are frequently of unusually high value - superior to the best innovations achieved by conventional approaches... When members of a team are cut from the same cloth, you don't see many failures, but you don't see many extraordinary breakthroughs either."

However, as the diversity of disciplines increases, "the average value of the team's innovations falls while the variation in value around that average increases. You see more failures, but you also see occasional breakthroughs of unusually high value."

Therefore, although there is value to diversity of disciplines, the challenges seem to outweigh the benefits.

What's the solution to having a diversity of disciplines without having to deal with the inherent complexities?

Open Innovation. By working with companies like InnoCentive, you get the value of discipline diversity while having few of the downsides. You get the take advantage of a wide range of experiences while only paying for successful solutions.

I will write more on Open Innovation in subsequent entries.

The Bottom Line

Diversity can create incredible value for an organization. It can help facilitate the innovation process. It can help increase the quantity and quality of breakthrough ideas. The key is knowing the right way of managing and engaging a diverse set of perspectives.

Related posts:

• Challenges, not Ideas
  
• Process, not Events

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Stephen Shapiro is the author of three books, a popular innovation speaker, and is the Chief Innovation Evangelist for Innocentive, the leader in Open Innovation.

Innovators Welcome Ambiguity

by Paul Sloane

Brilliant thinkers and innovators are very comfortable with ambiguity - they welcome it. Routine thinkers like clarity and simplicity; they dislike ambiguity. There is a tendency in our society to reduce complex issues down to simple issues with obviously clear solutions. We see evidence of this in the tabloid press. There have been some terrible crimes committed in our cities. A violent offender received what is seen to be a lenient sentence. This shows that judges are out of touch with what is needed and that heavy punishment will stop the crime wave. The brilliant thinker is wary of simple nostrums like these. He or she knows that complex issues usually involve many causes and these may need many different and even conflicting solutions.

Routine thinkers are often dogmatic. They see a clear route forward and they want to follow it. The advantage of this is that they can make decisive and effective executives - up to a point. If the simple route happens to be a good one then they get on with the journey. The downside is that they will likely follow the most obvious idea and not consider creative, complex or controversial choices. The exceptional thinker can see many possibilities and relishes reviewing both sides of any argument. They are happy to discuss and explore multiple possibilities and are keen to challenge conventional wisdom. People around them and subordinates can sometimes consider this approach to be frustrating and indecisive.

Albert Einstein was able to conceive his theory of relativity because he thought that time and space might not be immutable. Neils Bohr made breakthroughs in physics because he was able to think of light as both a stream of particles and as a wave. Picasso could paint classical portraits and yet conceive cubist representations of people.

How can you welcome ambiguity? First by admitting that there are few absolute truths and that for most common beliefs the opposite view might also be true. If the general view is that you can either get high quality or low price the brilliant thinker will ask, 'Why can't we get both? How can we deliver great quality at really affordable prices?'

Cognitive dissonance is the concept of holding two very different ideas in your mind at the same time. This is something all the great composers do when they think of two melodic themes and how they can intertwine, adapt and combine them. We would find it very difficult to whistle one tune while thinking of an entirely different one but that is the sort of thing that Beethoven or Mozart would consider trifling.

When we mull over the interaction of two opposing ideas in our minds then the creative possibilities are legion. A wind-up clock and an electrically operated radio are two very different concepts but by imagining their combination Trevor Bayliss was able to conceive of the clockwork radio. Most of us would dismiss such an idea out of hand. It seems incongruous to have a large mechanical winding device inside a small radio. And we can immediately see the drawback that the programme we were listening to would stop when the winder ran down so that we would have to get up and wind the thing again. That appears a very tedious operation.

But Bayliss saw beyond these limitations and considered the needs of people in the developing world who did not have access to reliable mains electricity and who could not afford batteries. For them winding up a radio is a minor inconvenience. The clockwork radio has transformed their lives.

If we want creative solutions and real innovations then we should welcome ambiguity. We should explore the possibilities of two different things interacting together. We should let opposites play.


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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Finding (or Avoiding) Innovators

by Jeffrey Phillips

As always, we'd like to make our readers and clients happy. In that vein, I'd like to introduce how to spot people who are likely innovators. In this way, you can identify them more quickly, and choose to hire them if you want to be more innovative, or you can ignore and avoid them if the status quo is more your scene. Good luck with that strategy, by the way.

Identifying people who are innovators is actually relatively easy. They are the ones who don't actually seem to belong the organization in the first place.

Innovators tend to:

• Reject the standard framing of a problem and restate the problem or opportunity. Rather than work within the given constructs or framing, many innovators want to toss out the framing and start anew. Just like Galileo, this may require working against an orthodoxy, yet nonetheless, it moves and so must we. Those folks who are so problematic about wanting to change or expand the framing of a problem? Probably good innovators.


• Be optimistic. They are almost always the glass half full people. Pessimistic people will focus far too much energy on the "problem" while innovators will acknowledge the problem and move on to find interesting solutions. They believe the problems are merely temporary barriers to more interesting solutions.


• Look to the future for signals rather than to the past. In most businesses, many people will ask "has this been done before" and "what can we learn from that success or failure. Innovators want to know "can we be the first" and what signals in the market or environment give us indications that we'll be successful


• Care about solving unmet or poorly understood challenges. Often innovators are going beyond the obvious, ordinary problems to uncover deeper unmet or poorly understood issues. If your team is captivated by solving an obvious and incremental problem, they aren't innovators.


• Network with people different than they are. Evidence suggests that the best innovators are people who read outside of their industry, interact with people from many different backgrounds and interests and seek to bring solutions from outside their industry to the table. People who are very deep in one industry but ignore signals and solutions from other industries are usually not very innovative.


• Are proactive. Innovators actively seek change while many executives are content to wait and react to what other firms do.


• Are dissatisfied with the status quo and willing to change it rather than simply accept the status quo and merely complain.


• Are very comfortable learning, trying and failing, and then trying again. They aren't stymied by a single failure and are usually very determined to start again, reframe the problem and try a new tack or approach, learning from previous failures and incorporating that knowledge.

So, if you are in the market to hire someone and want to know if he or she is likely to be an innovator, look for these signs:

• Ask them about an existing problem that you have. See if they are perfectly willing to accept your framing, or if they request the opportunity to reframe or change the frame entirely. If the latter, a likely innovator.


• Ask them about existing societal problems or corporate problems or challenges. Listen to how they approach the problem and their willingness to suggest changes or alternatives and the possibilities they suggest for change.


• In the context of a problem, what information do they seek - external, future oriented or internal information about the past?


• Can they name a big failure in their lives and demonstrate what they learned and how that failure helped them gain more insight into an eventual solution?


• Can they name five people in relatively senior positions they interact with on a regular basis who are from different industries? Can they demonstrate an active network outside of their "home" industry?

The kinds of answers you get with these questions will tell you how strong the "innovation" force is within the candidate, and whether you should hire that person or turn the Force against them.


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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Real Reason Amazon Should Acquire Netflix

by Ric Merrifield

Amazon and Netflix might be great together, but not for the reasons you might think.

The way I see this, it's a little bit like peanut butter and chocolate, two great tastes you might not expect to go well together. People are talking about the possible acquisition of video company Netflix by Amazon, and they are speculating that it has to do with movies and streaming media. Maybe, but I don't think that's why this acquisition would be so powerful, and I am frankly surprised I haven't heard more people talking about this.

Here's why.

One of the biggest mistakes I think Amazon has been making all along is ignoring the buying history of customers. They never recommend anything to me based on my buying history. They tell me what other people have bought when I buy a certain book or a tent or a squash racket, but they don't seem to really pay attention to what I buy and what I like. And I buy a LOT on Amazon. They are crazy to have ignored this for so long.

By contrast, Netflix has the most incredible recommendation process ever. While I do have to make the effort to rate movies I have watched (irrespective of whether I watched them through Netflix) based on what I have liked and what I haven't liked, they have the ability to say, for example, that for a movie like Pulp Fiction, while the average viewer gave it three and a half stars out of five, based on my history and preferences, they think I would like it much more, on the order of four and a half stars. What's amazing to me is that they are always right, and I have really unusual taste in movies.

Back to peanut butter and chocolate - if Amazon could use the Netflix recommendation engine innovations to do a better job of tracking my purchases and preferences and recommending everything from books to movies to music to running shoes, it would be amazing.

Is it worth it? Well as of today, Netflix is worth about $3.22 billion, according to Wall Street, and Amazon is about 16 times bigger at $52 billion and to have this incredible way to connect with customers and help them find what they will really like even before they know about it, that would be a huge, much needed, boost for Amazon. The lift in revenue would be significant - just ask anyone in retail about how much upselling is done at the point of purchase.

Overdue rethinking at Amazon, but a great match. I really hope it happens.

P.S. It makes for an interesting side note that if Amazon does buy Netflix, that would probably put founder and CEO Reed Hastings on the board, and he's already on the board of Microsoft. Would he stay on the board of Microsoft?


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Ric Merrifield is known at the "Business Scientist" at Microsoft Corporation in Redmond, WA and is the author of "Rethink". He blogs about ways to rethink through getting out of what he calls "the 'how' trap".

Brainstorming Breakthroughs Require the Right Question!

by Mitch Ditkoff

There's a simple reason why so many brainstorm sessions are a waste of time. The problem statement being pitched to participants is the wrong one.

This is not surprising - especially when you consider how little time most facilitators put into preparing for a session.

Here's what happens: The person who calls the session is usually scrambling - overwhelmed, over-caffeinated, and running from one meeting to the next. Out of breath, they pitch the topic to the group, but the topic is either vague or secondary to a more essential challenge that remains unspoken.

G.K. Chesterton, one of the most influential English writers of the 20th century, distilled the phenomenon down to 13 words. "It's not that they can't see the solution," he said. "They can't see the problem."

Then, of course, there's also the phenomenon of perception bias.

Pitch a challenge to an IT person, and it will be seen as a technology problem. Pitch it to a CFO, and it will be seen as a financial problem. Pitch it to a marketing person and it will be seen as a branding problem.

Or as a wise man once said, "When a pickpocket meets a saint all he sees are pockets."

If you plan on running an ideation session any time soon, don't just stumble into the room and pitch a vague topic to the group. Do your homework. Make the effort to identify the REAL issue before asking for ideas. If it's the WRONG QUESTION you present, no amount of idea generation is going to make a difference.


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Mitch Ditkoff is the Co-Founder and President of Idea Champions and the author of "Awake at the Wheel", as well as the very popular Heart of Innovation blog.

Basically Anything Can Be Innovated

by Hutch Carpenter

In a recent post, Four Quadrants of Innovation, I described one type of innovation as leveraging existing technologies, serving existing customers. In popular culture, this type of innovation is... well, frankly it's boring. No cool new advances, no new stuff you haven't tried before.

But what is compelling about this type of innovation is how well it fits Clayton Christensen's focus on understanding the "job" your product has been hired to do. Companies need to stay on top of their products, and changes in customer behaviors. Sometimes that's sexy new technology advances. Mostly, it's not. Rather, it's good old roll-up-the-sleeves and innovate to meet changing customer needs and expectations.

SlideShare CEO Rashmi Sinha wrote a great post recently where she asked Is it time to reimagine your product or service? She makes the point that many web services reflect their vintage year. They fail to evolve as the market does, ultimately falling further behind the curve of customer expectations.

Rashmi Sinha's post very much reminds me of Clayton's Christensen's point of view. Your customers have:

• Requirements you have not yet discovered at any given point in time


• Changing requirements over time that you need to decide whether to meet

On top of that, there's something deeper in the Sinha's post. There are times you need to push need innovations, even if your customers aren't yet asking for them. Let your customers catch up to you.

These points don't just apply to web services. They apply to all manner of products and services. Everything can be innovated. One key is to understand that sometimes innovation comes in service delivery or business models, not just product features.

Even things you wouldn't expect to be innovated, can indeed be innovated.

In line with this, I came across a great post by Jake Kuramoto of Oracle AppsLab. In Unexpected Innovation, Jake notes two recent innovations he has seen with...

...traffic lights. Of all things.

Yes, Traffic Lights Can Be Innovated

The first innovation is actually not all that surprising, and really is the application of existing technology. New lights use energy efficient LED bulbs. They have some issues to be worked out in terms of their ability to melt accumulated snow. But they make a lot of sense.

The second innovation is one that really speaks to a deeper understanding of what's going with traffic lights. See the pictures at the top of this post? Designer Damjan Stankovic came up with a concept where a timer is added to stoplights. Stankovic posits these benefits of such a timer:

• Less pollution. Drivers can turn their engines off and cut carbon emissions while waiting for the green light.


• Less fuel consumption. Turning off your vehicle while waiting on the traffic light can lower fuel consumption in the long run.


• Less stress. Since you know exactly how long you have to wait you can sit back and clear your head for a while.


• Safer driving. With the Eko light both drivers and pedestrians can be fully aware of how much time they have left before the light changes and that way reduce the chance for potential traffic accidents.

That last bullet is the benefit that intrigues me most, in terms of the job I want a stoplight to do: safer driving. Here in San Francisco, we have walk signals at intersections that include countdowns. When the WALK signals appears, you can see how many seconds are left to cross the street.

Both Jake Kuramoto use these walk signal countdowns in a different way. When you are driving, you can see the countdowns. If you're, say 50 meters out, this gives you something of an advantage in how you approach the intersection. When there are only a few seconds left, you know the light will be yellow well before you get to the intersection. With kids in the car, I slow down to be ready to stop for what will be a late yellow light by the time I reach the intersection.

Now if someone had asked me, I wouldn't have come up with a requirement for traffic lights to have timers. But because someone put those countdowns on the walk signals, I've found myself using them in my driving when they are available. And Stankovic's design makes me realize that, "hey, I want those timers on traffic lights."

Which goes to show you. Everything can be innovated upon. Even the most... uh... pedestrian of products and services.

Finally, I love this quote from Amazon's Jeff Bezos in a Newsweek interview:


"There's a tendency, I think, for executives to think that the right course of action is to stick to the knitting - stick with what you're good at. That may be a generally good rule, but the problem is the world changes out from under you if you're not constantly adding to your skill set."


Markets are always shifting. Don't think that anything is immune from innovation.

Image Credits: John Chuckman, Damjan Stankovic

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Hutch Carpenter is the Vice President of Product at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.

Can Optimism Change the Subway?

by Kevin Roberts

A public art project that links New York's subway system with the idea of "optimism" is bound to attract some cynicism, if not outright ridicule. That's because public transit everywhere in the world is one of the more popular targets for complaint, vitriol and even fist-shaking rage.

However, radical optimists seek out optimism in the hardest places - and where better than the subways of New York?

A campaign instigated by Manhattan designer Reed Seifer to distribute 14 million Metrocards emblazoned with the word "Optimism" to New York commuters kicked off in November last year under the MTA's Arts in Transit program. He's been an optimism promoter since the early 80s after an experience as a young boy with his father and a homeless man. He wrote a thesis on optimism and then started selling buttons. Now he's reached exponential scale. The naysayers were quickly vocal - "I am optimistic that the MTA is mismanaged and the fares will continue to go up while service goes down", and the sarcastic sucker-punch: "I feel better already."

It'll be interesting to see what effect the campaign has. Is simply putting a positive word out there into the atmosphere enough to cause social change? I'm a great believer in the power of language to change the entire conversation. This is how Lovemarks came about - I wanted to change the whole paradigm of brand management which had run out of juice. Love is the most provocative act of all, and people can get remarkably jumpy at the prospect of getting close to Love. One of the ways we started to propagate the idea of Lovemarks in Saatchi & Saatchi was to simply use the word a lot - in emails and conversations. Do it naturally, don't overdo it - but just do it!

Whether Optimism is as compelling as Love is yet to be seen. I've called myself a Radical Optimist - not an everyday garden variety, but a committed evangelist. Reed Seifer is therefore a Radical Optimist, taking the notion beyond the "glass is half full" cliche.

Radical Optimism is not about seeing the world through rose-tinted glasses; it's about taking notice of the roses that are out there - and getting out there to plant some more. Negativity and pessimism is easy. As the MTA campaign reminds us, traveling through life with some optimism in our back pocket is a great idea for us and for those around us.

Oh and here's the thing - the New York transit system is a world-beater, and it deserves better than the relentless negativity that seems to be directed its way. Did you know that New York is one of the most sustainable cities on the planet - per capita greenhouse emissions are around a third of the rest of the USA - and that's largely thanks to the subway system, and the five million people who use it every day.

Image source: http://www.mta.info/mta/aft/about/optimism.html

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Kevin Roberts is the CEO worldwide of The Lovemarks Company, Saatchi & Saatchi. For more information on Kevin, please go to www.saatchikevin.com. To see this blog at its original source, please go to www.krconnect.blogspot.com.

Saving Curiosity from the Guillotine

by Stefan Lindegaard

This great topic was raised by Arthur Lok in a discussion in the Innovation Management group on LinkedIn. It made me wonder and reflect on my own level of curiosity, what this term means to me and how it effects innovation.

I think we lose our sense of curiosity as we begin to build a power base that we feel we need to protect. We have something to lose and then we begin to focus on how to protect this rather than expand and build further on what we have.

So are we just defensively minded? Such a mindset definitely make incumbents more vulnerable to new innovation brought to market by companies and entrepreneurs having nothing to loose.

I think this goes for products, services and thus corporate revenues as well as the knowledge base we build as individuals. If what we know today provides a good living perhaps we are not that open to challenge this and develop new points of view. Unfortunately, this does not work in times where just standing still is the same as getting behind - at a very fast pace.

It is fairly easy to point out what kills curiosity. I gave an example above and you can find others in the LinkedIn discussion. The more interesting question is what we can do to avoid killing our curiosity. I hope we can start a discussion on this here. Let me start off with one of my suggestions;

Try out new technologies. It took me years to get the value of cell phone texting and I am still not that good at it. In retrospect, I see this as a sign of me getting older and losing my curiosity. This lesson taught me to be open towards new technologies and not write them off as fast as I might have done.

Twitter is good example. I was initially annoyed but I stayed in there and today it gives me much value. TweetDeck is a great source of new insights - just use the search function.

What do you do to stay curious?

Editor's note: Check out our Continuous Innovation group for more interesting innovation discussions

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

Emerging Computing Paradigms

by Idris Mootee

HCI (Human-Computer Interactions) science is fast evolving to deal with emerging computing paradigms. Today it is a little Cognitive Science and AI, a lot of anthropology and Social Psychology.

HCI is a fascinating discipline; the field has its origin in the 80s primarily in computer science and cognitive psychology. Today it exists in a confluence with design as a discipline that owes to traditions including human factors, industrial design, architecture, information design and graphic design. HCI contains a number of semi-distinct fields of research and practices in human-centered informatics. One example is the Sixthsense from the MIT Media Lab. An augmented reality (AR) project, that aims to seamlessly integrate digital information with our everyday physical world. A very cool HCI concept, your hands movements are the interfaces.

HCI is about people, interactions and system interfaces... First, people do what people are good at, such as observation, interpreting, determining what is important, and making the final decisions. There are situations human decisions need to be assisted by data visualizations. Second, computers do what they are good at, which are repetitive tasks and routine. Neither people nor computers are forced to do what the other does better. HCI integrates the two so they can compliment each other to achieve more productivity.

There are a few challenges in applying universal design in the context of HCI in order to provide the formative insight needed to design interactive products that can be experienced by the mass in different contexts. The distinctive characteristics of these products may be identified by briefly considering the changes in the socio-technical paradigm, from the early days of computing to the 21st century human interfaces intended to provide a gateway into the world of distributed information paradigm, the scope and context of use of the computer (hard to define what a computer is these days, or what power is required to achieve the distinction), as it becomes a mediating tool for increasing different types of human (both business and personal) activities.

In another 10 years, mini computing devices will be everywhere as medical and consumer devices reach mass adoption. While HCI is still in its infancy, some HCI practitioners are trying to break away from common conception of an "average" user interacting with a laptop in the office to get work done, and to engage in a conscious effort to develop new understanding, methodologies and tools, in order to understand the following:

1. How emerging new distributed computational paradigms will create new challenges for HCI designs? How do we research behavior that does not exist today?


2. How new interaction /interface design can be effectively used to serve an increasing range of system-mediated human activities?


3. When does interactions / interface design cross the line and becoming service design? Interactive artefacts are now being introduced into service settings in a larger degree.


4. How new visceral interactions that driven by interactive paradigms rather than user needs emerge, beyond the imagination of the novice users.


5. What are the emerging threats to privacy that force us to rethink some fundamental concepts in HCI when attackers, ranging from the curious to the highly malicious, might abuse or subvert the system.

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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.

Using Networks to Spread Ideas

by Tim Kastelle

Yesterday I talked about some of the benefits and challenges of distributed innovation within organisations. One of the biggest challenges you face when you make everyone responsible for innovation is this - how do you get new ideas to spread throughout the broader group? This is part of what John and I are studying in our major research project at the moment. We have a three year grant to look at innovation networks within project-based firms. As we're getting further into the research, it is becoming clear that this issue of idea diffusion is one of the biggest problems that these firms face.

Earlier this week, we did a pilot study for a student's part of the project. Their question concerns how people search within their networks for information that they need. Because we haven't made a good video talking about this yet, here is Venessa Miemis explaining some of the issues:



(there's more good stuff from her here)


So the network facilitates innovation, as well as the diffusion of information - but how? That is what we're trying to figure out because the 'how?' part has generally been treated as a black box. To get at this, we will map networks within four groups of people in one firm that share a knowledge area, but who are spread across a number of different locations. This week, we tested the survey on a small group in the firm, and we learned some interesting things even from this.

This is one of the networks that we mapped. It shows the links based on responses to the question 'who provides me with significant knowledge?' In this case, we defined significant knowledge as that which was essential for solving a work-related problem. There are a couple of interesting things that we learn from this.

The first is that it is a relatively sparse network. This surprised the group - the manager thought that we wouldn't learn much from this team because they worked very closely together and they are highly cohesive. Still, even within a highly cohesive team, knowledge is not evenly distributed.

The second issue concerns the diamond formed by the four people in the middle of this network. This group of four was at the core of all of the different networks that we mapped. The surprising thing here is that this structure actually reflects the formal hierarchy of the group pretty closely. Organisational network analysis often shows that the informal networks are quite different from the formal structures of the firm. But that doesn't appear to be the case here. We've actually found this in other parts of our research in other firms as well. So we're starting to think that in distributed innovation networks, hierarchy is actually more important than we expect it to be. This is still very speculative, but it's potentially interesting.

The bottom line is that when our innovation efforts are distributed, it is critical to understand the structure of our knowledge-sharing networks.

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Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

Battlefield Innovation Lessons for Business Leaders

by Paul Sloane

Let's be clear, business is not war. But if you are operating in a fierce marketplace then it can feel like it. Many of the methods we use in our sales campaigns, marketing strategies and competitive tactics are based on military analogies. So what lessons can business leaders today learn from the history of warfare? Here are some that seem particularly relevant.

David vs. Goliath - 1000 BC?

Goliath was a giant and the Philistine's champion at man-to-man combat. David was a young shepherd boy. Goliath expected to overwhelm his opponent in a sword fight but David chose to fight on different terms. He defeated Goliath by using an unusual weapon, the sling, with pinpoint accuracy.

Lessons: It is no use going up against someone who has an 8-ft spear with a 4-ft spear. You need a different weapon. If you are smaller you have to be agile and different. If your competitor is the giant in the market, you need a radical approach so that you can strike rapidly and accurately. This is what Direct Line did when they used telephone technology to sell car insurance directly while the major players were using brokers.

Battle of Crecy - 1346

The English army of about 14,000 men under Edward III had ravaged northern France. They were finally confronted on August 26, 1346 by an army of some 40,000 Frenchmen under Philip VI. Battles were normally fought by knights on horseback and the French, with such a numerical advantage, felt confident. But the English had a new and superior technology, the longbow. Their archers were trained in rapid fire and could sustain a rate of over 10 arrows per minute. Each arrow could penetrate armor. It was the first time that such a mass volley of arrows had been used in warfare. The French attacked in waves and they were cut down relentlessly by the power, speed and range of their opponents' archers.

Lessons: One of the best ways to beat an established competitor is with a new technology. Innovation can overcome a strong opponent. Focus your firepower on the target. Amazon used internet technology to directly address the needs of book buyers and to run rings around the established high street vendors.

Battle of Trafalgar - 1805

Traditionally, naval battles were fought by lining up two fleets in parallel line so that they could deploy the maximum firepower from their canons. At the battle of Trafalgar, Villeneuve, the French admiral, formed his fleet of 33 ships into a line. But Nelson did not line up in parallel. He split his 27 ships into two squadrons and attacked at right angles to the French line. In the hectic battle that ensued Nelson died but the British were victorious and established a naval supremacy that lasted over 100 years.

Lessons: If you do not have a superior force or superior technology then try a different tactic. Surprise your opponent with a fresh approach. Virgin, Benetton and Body Shop are examples of businesses that used surprise tactics to disrupt incumbent market leaders.

First World War - 1914 to 1918

The scale of the slaughter of soldiers in World War I was appalling. Over 8 million military personnel died. The main tactic on the western front was to repeatedly attack strong defensive positions with waves of men. They were massacred. It was believed that with sufficient artillery bombardment and pure weight of numbers a breakthrough could be achieved. But the way to overcome barbed wire defenses and machine gun posts is not with lines of infantrymen. What was needed was the rapid development and effective deployment of the tank.

Lessons: Effort, courage and hard work are not enough. If you are competing with a well-entrenched opponent who has a strong defensive position then you need a new technology or approach to achieve a breakthrough. A long war of attrition debilitates both sides. Retail banking was a stodgy business until Egg, First Direct and Cahoot came along to shake it up and take millions of accounts away from the big players.

Maginot line - 1940

The British and French high commands assumed that the new war with Germany would be similar to the First World War, with huge static armies facing each other. The French built a massive defensive line along the entire border between France the Germany, the Maginot line, consisting of enormous fortifications. But when the Germans attacked in May 1940 they did some lateral thinking. They used fast-moving armored divisions and paratroops. They swept through Holland and Belgium and around the Maginot line. The British and French were outmaneuvered and France fell in five weeks.

Lessons: Assuming that new contests will be similar to previous ones is dangerous. The best way to combat an opponent who has a strong defensive position and barriers to entry in a market is to go around those barriers and find a new way to the market. This is what Direct line, Amazon, Netscape and Easyjet did.

Battle of Britain - 1940

After the fall of France, the British retreated across the Channel, leaving most of their equipment behind. The German army, having raced across Europe was rampant while the British army was demoralized and under-equipped. The Germans planned an aerial assault followed by an invasion, and many thought that Britain would fall as quickly as France, Holland or Poland. But the British had some things that the others had not - the channel, the Spitfire, radar and Winston Churchill. Churchill gave the people a vision, purpose and belief that enabled them to sustain the blitz, oppose the might of Germany and eventually triumph.

Lessons: In tough environments, winning CEOs are those who have a clear vision, can communicate it to their people and motivate them to achieve the goal. Sir Arnold Weinstock, Bill Gates and Jack Welch are recognized as this type of visionary leader.

Defeat of Hitler - 1945

After his great successes in the early part of the war, Hitler was convinced that he was a military genius and the German Wehrmacht could overcome any obstacle. When he attacked Russia in the summer of 1941, he was so confident of victory that there were no plans for a winter campaign; no winter coats for the soldiers and no winter oil for the tanks. He ignored the advice of his generals and pushed his forces down towards Stalingrad and then refused to allow them to withdraw or regroup when the communication lines became overextended. His arrogance and overconfidence built a barrier to criticism and meant that he never used the full talents of his team. Eventually Germany was overwhelmed by the weight of Russian, American and British forces.

Lessons: A narcissist CEO will lead the business to disaster. Plan a fallback scenario. Strong vision and belief are essential but a leader who blocks constructive criticism, ignores the input of his team and fails to build consensus is doomed. To mention them by name would be libelous but take your pick from the CEOs who have led mighty companies to disaster in recent times.

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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

The Selfless Gene

Contrasting expectations of species-level evolution, the classic phyletic gradualism model (left), and the punctuated equilibrium model (right).


by Kevin Roberts

Biology fascinates me. I love the work of Stephen Jay Gould who theorized how change in evolution happens at the edges, the margin, the fringe. He calls this 'punctuated equilibrium', and it explains how evolution doesn't take place on a predictable, linear path but with unpredictable and dramatic bursts coming from the outer reaches of the species. The same can be said of the world of ideas and innovation.

Another biologist, Richard Dawkins, a brilliant communicator, created a lot of confusion when he called his 1976 book on evolution, 'The Selfish Gene'. The book details the brutal efficiency of evolution, but the phrase itself has entered common usage to mean that human beings are genetically programmed for selfishness. It means nothing of the sort - and isn't it great when research comes along that proves the exact opposite.

The NY Times reported last month that research into young babies demonstrates that we are born with an in-built instinct to help others. Before parents have even begun to teach the rules of social behavior, researchers saw kids as young as 12 or 18 months in small, selfless acts of kindness. This innate generosity and willingness to share and cooperate is unique to humans; even our closest ancestors have no interest in helping out a fellow chimpanzee unless there is something in it for them.

Researchers are quick to point out that there is ample evidence that selfishness plays a part in our make-up too. As one of the researchers puts it, "That's why we have moral dilemmas, because we are both selfish and altruistic at the same time."

These findings confirm what radical optimists already believe, and it's nice to have some science to put in the back pocket.


Image source: http://communities-dominate.blogs.com/brands/2007/08/index.html

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Kevin Roberts is the CEO worldwide of The Lovemarks Company, Saatchi & Saatchi. For more information on Kevin, please go to www.saatchikevin.com. To see this blog at its original source, please go to www.krconnect.blogspot.com.

An Out of Body Innovation Experience

by Drew Boyd

People are fascinated with the idea of human cloning after researchers cloned a sheep in 1997. The debate about the risks and benefits of human cloning rages on. What if you could clone yourself in a virtual sense? Even better, imagine cloning yourself into another person's body? What would you feel? What would you learn? How would your life be better?

Dr. Henrik Ehrsson, a neuroscientist from Karolinska Institute in Sweden, has pioneered a method of allowing us to get out of our bodies and into the body of someone else...virtually...so that you sense whatever the other person senses. We "clone" ourselves everyday with simple technologies like a mirror or camera. But this is different. This technique clones you into another form so you can experience life from that point-of-view. From CNN:





This is an example of the innovation template, Multiplication. It works by taking a component of a product or service, then creating copies of it that are different in some way. Using SOLUTION-TO-PROBLEM innovation, we imagine potential benefits of the hypothetical solution. Dr. Ehrsson believes this technique could help us improve our self-esteem. It might help amputees put a sense of feeling into a prosthetic limb. Or it might help us identify with other cultural, racial, or gender groups by "living" in their bodies.

This last idea is particularly intriguing. Imagine you had the ability to mandate when someone else uses the technique to become YOU. You would use this is critical situations when it is essential the other person understands your point-of-view: spouse, lawyer, negotiating partner, customer, boss, etc. The ultimate cloning experience is not making another copy of yourself, but rather having others clone to become you.

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Drew Boyd is Director of Marketing Mastery for Johnson & Johnson (Ethicon Endo-Surgery division). He is also Visiting Assistant Professor of Marketing and Innovation at the University of Cincinnati and Executive Director of the MS-Marketing program. Follow him at www.innovationinpractice.com and at http://twitter.com/drewboyd

Open Innovation Bullies

by Stefan Lindegaard

Large companies have always used their size and power to get things their way. This is no different with open innovation. So I am not surprised when I listen to people from smaller companies complain about the behaviours of large companies when they start working together.

Such behaviours were confirmed by several large companies at the recent Open Innovation Summit. They shared stories on how they had used their size and corporate power to get deals that favoured themselves and they even admitted that some deals could be so lop-sided that they could discourage other smaller companies from working with them.

This made me wonder whether it is just human nature to be a bully and use the power at hand. I reached the conclusion this is often the case and in terms of open innovation this is just what smaller companies should expect when they engage with large companies.

This is not to say that I approve of such behaviour. I prefer an ideal world in which all companies get along and share the pie in a fair and nice manner. But the problem is that we do not live in an ideal world. So what should smaller companies do about this?

I do not think they can do much to change the behaviours of the large companies. But they can prepare better. They should expect a bully-like behaviour and prepare for this rather than cross their fingers and hope for the opposite. They need to analyze the level of resources needed to work with the larger company and they need to weigh the pros and cons on potential deals. Some deals might not be worth the trouble.

At least some larger companies are aware of this situation. They understand how important it is to be perceived as the preferred partner within their industry. This was illustrated by the fact that some of the companies that admitted to loop-sided deals at the recent summit work to rectify those.

At the summit, a representative from a large company also shared that increasing the leadership position that comes with the perception of being the "preferred partner of choice" is an area of improvement to them.

On this, he mentioned that the company recently commissioned a third party to conduct a blind survey in which they asked a range of potential partner companies that had not yet worked with the given company whether they would like to do so. A large majority replied positively. Later in the same survey they asked companies that had already worked with the given company by revealing their name. Would they like to work with them again in the future? Although still in the high end, the reply here was lower than the first one.

This gives reasons to worry. Hopefully, it seems as if this company is up for the challenge as they show a willingness to confront and rectify this. This is most likely not the case at many other large companies, but let's hope for the best - and tell smaller companies to prepare well...

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

Creating Conditions for an Innovation Culture

by Jeffrey Phillips

I've been thinking a lot lately about "creating a culture of innovation", which is what a lot of firms suggest they want to do. Of course this is a very lofty goal. Changing a corporate culture doesn't happen easily, and it certainly doesn't happen overnight. Yet clearly one of the most significant barriers to innovation is the entrenched culture of effectiveness and efficiency, of risk-avoidance and following rather than leading.

So, that led me to think about when teams and groups within an organization can be innovative, and what the conditions were when that happened. We regularly lead teams on trend spotting and scenario planning exercises that create some really radical future scenarios, with little resistance, and often lead ideation and brainstorming programs that achieve a large number of disruptive or radical ideas. These small programs demonstrate that innovation can happen in any organization under certain conditions. Let's first look at what makes these small programs effective.

We find that we can be most effective with these discovery and idea generation programs when we set very clear expectations about our goals and prepare the team carefully for the work, setting out specific rules and expectations. Typically when we go into the work, we'll close the door and tell the team that anything that happens in the room is fair game, and open for discussion, and we aren't bound by the "normal" rules. This helps get the team out of the "day to day" thinking and encourage their creative thinking. They know that no one will be allowed to ridicule an idea or submit challenges that will block the consideration of an idea. For those few moments or days, we have created a "micro-climate" for innovation, probably akin to a hothouse in the wintertime.

So, if we can create some assorted micro-climates where teams can spot opportunities and emerging trends, and effectively generate ideas, can we build on the "micro-climate" concept to create more areas where conditions are ripe for innovation? Using the flower analogy, can we move the ideas from one hothouse to another, gradually exposing the ideas to the elements and improving the chances for survival, while we try to change the conditions of the organization at large (change the cultural attitudes to innovation)?

I'd like to suggest the first step may be to create a number of "micro-climates" - safe locations to generate, develop and evaluate ideas that exist specifically to give ideas the necessary environments to grow. Some firms use a designated space for innovation. Perhaps the best way to change the culture is to start small, with several micro-climates that establish conditions for innovation and allow the process to prove its worth.

Eventually the idea needs to be exposed to the conditions, and planted where it will bear fruit. That is, it must make a transition from an interesting idea to a new product or service, and that means it must work its way through the product or service development process. There are two considerations here: either the existing product or service development process must be adjusted to accept and manage new, possibly more disruptive and fragile concepts, or new product and service development models must be developed for more radical ideas. To carry the plant analogy further, any farmer worth his salt will cover plants in the field that are susceptible to a killing frost or unexpected conditions. So, too, must an organization provide more cover and care for a radical idea as it moves through a traditional product development process.

The point here is that too many times we talk about "changing the culture" and immediately reject the concept, since it is such a Herculean task. Perhaps what we should do is establish small teams and locations where the conditions are beneficial to innovation - small micro-climates where ideas can succeed, and string them together. Once we've demonstrated success, we won't have to worry about changing the culture, because slowly the organization will recognize success and begin to adapt to the best concepts that the conditions in the micro-climates offer them.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Killer Small Business Social CRM

by Hutch Carpenter

Parker Smith wrote a piece that got me thinking. In Foursquare: Democratizing the Loyalty Program, he posits that Foursquare could be the loyalty program provider to small businesses. I think he's right.

Then I noticed these identical product benefits touted by the companies themselves, Foursquare and Jack Dorsey's Square:


"For example, foursquare can tell you how many times a customer has been to your venue or the frequency of their visits. Many venues are now using this data to reward their most loyal customers with freebies or discounts." - Foursquare

"If you frequent a place that accepts Square, we'll let them know you're a repeat customer. That 10th cappuccino may be on the house, no paper coffee card required." - Square


Would you look at that? Are these guys going to end up competing with one another?

A few years back, I was the personalized marketing product manager at Pay By Touch, which offered the ability to pay for items with biometrics (i.e. your finger). Once you could identify the customer and her spending, interesting loyalty program solutions became available.

Which brings me to what Foursquare and Square are doing. Square is still in beta mode, so it's hard to predict fully its uptake in the market. But let's assume Twitter co-founder Jack Dorsey and his backer, Khosla Ventures, are on top of this opportunity. And Foursquare is growing quickly.

Each provides pieces of what would be needed for a small business CRM. The companies are independent, but I can see new value created if they were to work together.


There is no CRM for offline small businesses

At least, not for businesses that operate in the physical world. Dry cleaners, restaurateurs, retailers and other small businesses. They may have loyalty punch cards, but generally don't have any programmatic way to track and engage customers.

But they could use CRM as much as a large business does. I like this customer lifecycle framework by Gary Hawkins in Customer Intelligence:



It shows the stages of a business's customers: new, existing, declining, lapsing. And the ability to tier active customers also is valuable. Each tier has its own dynamics. There is much more to CRM than a simple frequency loyalty program. It's a deeper level understanding of the customer base. Understanding the statuses of customers from this point of view is powerful marketing information.

Modern CRM is more than the analytics and outbound campaigns. The social CRM movement is gaining strength, and it's incorporating many social network principles into the customer engagement process.

And it's not readily available for small businesses that operate primarily in the "offline" world. Unlike the digital platforms of e-commerce, offline transactions are not measured. At least not beyond the credit card transaction for consumer transactions.

This is an area of enormous opportunity. The company that solves the CRM issue for the 4.3 million small businesses in the U.S. has an enormous opportunity in front of it.


Complementary CRM strengths of Foursquare and Square

The two services each bring unique strengths to a small business CRM solution. Take a look:


Start with the commonality Diagram. Foursquare and Square both provide:

• Customer identity = who are your customers?


• Visit frequency = Foursquare check-ins, or Square credit card swipes

When you see them both tout free products for repeat customers, this is how they’d do it. Identity + frequency = loyalty punch card.

But what about the services' other features?


Foursquare provides the social fuel:

• Social incentives: It's fun to build up points relative to your friends, show off your Foursquare badges. And who doesn't want to be Mayor of some local business?


• Social interactions: People use Foursquare to to broadcast their location. This lets other meet up with them. Or in the case of crowded venues, find someone else there.


• Game dynamics: This reporting in on your locations is an addictive game for many. It's cool to get your first check-in daily bonus, to unlock a new location (hooray!) and oust someone as the Mayor of a place.


• Social media word of mouth: By following people on Foursquare or Twitter, you can see where your network hangs out. This raise awareness for businesses, an incredibly important benefit.

Here's an example on that last point. Socialtext CEO Eugene Lee often tweets this:


"I'm at Coupa Cafe (538 Ramona St, at University Ave, Palo Alto). http://4sq.com/IITeJ"


I don't spend much time in Palo Alto, and I'd never heard of Coupa Cafe. But you know what? If I find myself in Palo Alto needing lunch or a coffee, guess which place I'd specifically look for?

Square provides the transaction processing power:

• Dollar spend: Incredibly valuable information to track. Does someone come in a couple times a week, but spend heavily on food? Or do they frequent the cafe more often, but only buy coffee? Dollars spent is an important complement to simple visit frequency.


• In-the-flow process: Square captures its information in-the-flow. That is, you don't have to do anything extra. You're have to pay, it's part of the normal process. Foursquare requires a check-in, which is outside-the-flow of regular small business-customer interactions.


• Transaction handling: By owning the transaction handling, Square can implement low-maintenance marketing programs. Businesses can create promotions tied to specific accounts, and execute them at the point-of-sale via Square.


• Merchant account process: The process of getting businesses signed up for these programs isn't trivial. It is standardized, but there's a lot to tackle to provide good service. Some early reports indicate that Square has a superior merchant account set-up process, which may be its best innovation.

The in-the-flow nature of Square should not be underestimated. Getting adoption for any service is tough, and removing whatever friction to participation that exists is a critical element. This commenter on a post about Foursquare makes a good point:


"The sort of people who will stop and record their restaurant visits and who have friends who also stop and record their restaurant visits and then write reviews of same. And while that's a prime demographic, I'm thinking it's not nearly as large as you'd hope. Most people just don't have the time or inclination to 'play' FourSquare."


This is why putting the process of playing Foursquare in-the-flow would be valuable.


Making it happen

The challenge is in connecting a credit card transaction to a person's Foursquare account. Then I realized Square's intentions are much bigger than a simple transaction swipe. The company lets people set up their personal accounts on Square. I assume you will enter your credit card number online, and when that number comes through in a transaction, it's associated to your Square account. Thus Square can manage loyalty punch card programs.

Well, why not associate your Foursquare account to your Square account? When you swipe your credit card at the local business, Square processes the transaction the way it normally does. But it also does something else. It prompts an update to your Foursquare account.

I'm not talking a Blippy-style broadcast of your credit card purchase amount. Rather, your location status is updated automatically on Foursquare. Just as if you'd updated from your iPhone.

The small business then gets the social part of the CRM program.

What do you think? Two great tastes that taste great together? Small business could use the combined elements of Foursquare and Square.

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Hutch Carpenter is the Vice President of Product at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.