Diffusion of Innovation

Diffusion of innovation is an idea that some groups within a market are more ready and willing to adopt a new product than others and that the product is diffused through a society in waves.  




One of the biggest threats to preventing diffusion of a great innovation can lurk within.  In your organization, who are the innovators, early adopters, early majority types, late majority types, and laggards?  One of the challenges most of us face where we work is selling an idea to people in our own organization. 

People who as consumers tend to be laggards or late majority should not be put in positions at work where they can prevent innovation--here's why. 

Your ability to compete is often hindered by the play-it-safe crowd.  Let's stay with our proven "same-old" products and services because they prefer the safety of the familiar. 

The lesson of Kodak is staying with film and not moving forward in their digital innovation gave competitors an the opportunity to kill Kodak with their own sword.  The Kodak "play it safe" in our familiar territory approach to business is at best dangerous, and at worst life ending. 
The four main elements in the diffusion of new ideas are:
(1) The innovation
(2) Communication channels
(3) Time
(4) The social system (context)

Why do new ideas get shut down before they can ever get an opportunity for wider diffusion into the market?  Many times, organizational leadership puts people in positions where they become gatekeepers of innovation.  So, your own company social system can be a threat to your company's success if people who are laggards as consumers are put in positions where their "lagging" personality shuts down communication of ideas, innovation, and entrepreneurship at work.

For example, if you have a person who tends to avoid risk, play it safe, does not want to rock the boat, is controlling and on a power trip, does not like change, does not have a smart phone or use email, or thinks tomorrow will always be the same as yesterday, then it is likely good ideas will be aborted before they ever get a chance to grow by people who are by nature resistant to new ideas. These people are innovation killers.

Laggers will never communicate good ideas coming from those working under them to people above them.  Having naysayers as gatekeepers can lead to competitors having first mover advantage, and taking over your place in the market--can anyone say "Research in Motion?"

A proper balance of taking successful products through their full life cycle, knowing when to cannibalize your own old products, having good research and development, and maintaining the same entrepreneurial spirit that brought you success in the first place are keys to success in your industry!

• The Theory (Parsons The New School of Design) 
• Diffusion Applied: How Great Leaders Inspire Action (Simon Sanek)
• A cool video that explains this in under 4 minutes: Below

Youth Entrepreneurs and More Reads For Today

• All Terrain Brain: Great site for 8-12 Year olds to discover the entrepreneurial spirit (Website)
  
  Read how kids have started their own businesses.  Then, follow the roadmap (great videos--follow the maze).
• Startup Basics--From EIN to Workers Comp   (Business News Daily)
• New Teaching and School Models (Kauffman Foundation)
• The Founders Dilemmas.  Read author intro here.  Watch a sketch by Noam Wasserman here.  

Innovation Steps

The main idea I want you to think about today is this: What problems are people facing in a slow stagnating economy that you can turn into innovation opportunities?  What are people complaining about most?  What solutions are people searching for?  Now think through these innovation steps

Innovation Steps

1. Problems people have are most often the driving force behind innovation.  Problems, in reality, are human needs.  New ideas and ventures start with a problem.  The root of innovation is people want something solved, thus human need is the breeding ground for innovation.

Make a list of problems people have in the present economy.
2.  In many cases, an "aha moment" is the spark that lights the fuse of idea dynamite--exploding creative ideas that are the seed of solutions to solving the problems people have.  

Look at your problem list and brainstorm solutions.  Write them down because you will forget them. 

 3. Ideas alone will not result in innovation.  Ideas go through trials, iterations, and a development process.

The innovation process takes the idea and first prototypes it out to people.  Then, based on feedback, ideas are refined over and over asking "Will this solve your dilemma?"  

Who will you want to show your proto-type solution to?  Are you willing to listen--I mean really listen to people?

An Old Example



Let's make the abstract concrete.  The old Miller Lite beer problem was we want something that tastes great, but is less filling. 

Many businesses face this same challenge today as Americans are thinking more about obesity and health. 

People want healthy food and beverage items that are good for you, and taste good.  The problem is people are feeling pressured by society, wellness programs, and peer pressure to get healthier. 

So, let's say you devise a great idea for a zero carb product.  You roll out your prototype and ask customers and potential customers over and over and over--Does it taste good?  Is it healthy enough to meet your health and taste concerns?  This is how the iteration step works.

4.  Your innovation iteration launches your marketing plan.  As you have people try your products or services, look for which segments of people are responding most positively.  It may not be who you expected. 

Exposing your innovative solution to future customers helps with customer analysis and targeted marketing should you go to market. 

In our company, we were targeting the weight loss segment with a new low calorie "light bread," and in the process discovered diabetics found our product meeting their nutritional needs.  We never thought of that segment till we were doing store event promotions and talked to people receiving our promotional products!

All of the innovation steps described above can take weeks, months, and even years.  If you have an idea that you and many others think is good, be persistent and one day it just may pay big dollars!

Keep innovating! It is what America does best, and is the key to a recovery banging on all cylinders.  Go out and win!

Apple Bigger Than GDP of 160 Nations!

Innovation and entrepreneurship, disruptive and creative destruction.  Apple is what Joseph Schumpeter, Peter Drucker, and Clayton Christensen try to teach us. 

Click the graphic, then click again for large image.  It is worth it.

phttp://dailyinfographic.com/apples-explosion-infographic

20 Largest Private Companies

I think this is the fruit of innovation and entrepreneurship!  What do you think?  I had the opportunity to work for Cox last year and family logistics prevented it.  Sigh...

Milken Conference: Innovation and Entrepreneurship Digest

One of my favorite conferences I plan to attend each year is the Milken Institute Global Conference.  Here is a video digest of this year's sessions on innovation and entrepreneurship. 

• Accelerating Innovation in the Medical Industry
• Financial Innovations for Early-Stage Drug Development
• A Conversation With Visionary Women Entrepreneurs
• Next-Generation Philanthropists and Social Entrepreneurs
• Game-Changing Global Entrepreneurs
• New Strategies for Financing Social Innovation: A Conversation on Engaging Capital Markets and Creating Social Good
• The New Rules of Innovation and Corporate Ingenuity: Adapting to a Changing World
• E-commerce: Emerging Trends and Business Models
• Innovation Super Nation
• What It Means to Be an Entrepreneur: A Conversation With Sumner Redstone
• The Future of Financial Innovation

The Process of Innovation 3

In marketing and innovation, nothing is as important for developing new products than spending time with the consumer.  From 2007-2009, recession times caused me as a manager in my company to pioneer a brand renewal for a product line known in our region for over 50 years--Monks' Bread. 


Made by real Trappist monks who live a cloistered life literally, in order to navigate the difficult grocery environment, we innovated a "free bread giveaway" program at summer festivals and winter indoor vendor events to get "face time" with the customer.  

Our bread tent and booth became one of the most popular fixtures all over the region.  What we learned was about 50% of the 35,000 people who came through our booth during those years had never heard of the product, and of those who had, only 30-40% were regular buyers as defined by purchasing at least once per month.  

So here is what we learned about innovation by giving away bread over three years to get to know buyers and potential buyers of our product:

• The importance of spending face to face time with real customers gave us many new ideas for innovation of products and packaging that would be what the consumer wanted.  Their needs were very different than what we had assumed. 
• We discovered what the consumer what unsatisfied with when they walked down the bread aisle in the grocery store. This led us to keep asking "Why?" at our promo events.  Why do you buy the bread you do?  Why do you buy our bread?  Why do you buy where you buy?

Dealing With Idea Squashers

An acquaintance posted a piece from Darden/UVA about idea squashers. One of the most dangerous people in an organization are the naysayers who resist change, usually because they have failed at innovation and new products so are playing it safe.  When innovation gets stuck--persist!

How To Deal With Idea Squashers (Darden)

Meet the Real Mother Of Invention: Persistence! (Inc)

The Process Of Innovation 2

How Do I Find the Opportunity to Innovate?

In the recovery and counseling world, there is a saying about change: People do not change till the pain of remaining the same is greater the pain of changing. 

Even though a person may have unsatisfied needs, wants, and desires, they may settle for the status quo.  Innovation is all about making people come to the point where they absolutely have to change. 

Remember, people are looking for solutions to problems.  When a consumer buys your product or service, what they are paying for are solutions to something they are trying to accomplish.  Problem: I need to trim my hedges.  Solution?  Hedge clippers that can help an amateur look like a pro.  Why?  I need to have my yard looking better.  Why?  Because the last time my father-in-law was here he made a comment about how overgrown our bushes are and since his yard is always immaculate, I don't want him to think bad of me.  That is the real need!

If you are looking for opportunities to provide innovative solutions for your customers, you have to be always asking, "Why are our customers really buying our product or service?" 

If you want to get ideas how to know your customer better, I highly recommend you watch the show "Undercover Boss." A common theme on that show is how out of touch the front office is with the customer and their needs.  The more we do not know our customer, the more we miss the opportunity for innovation.  

Getting back to our opening statement, where are your customers feeling the pain to change?  How can you make the pain of staying the same greater than the pain of changing?  Price? Peer pressure?  The old model is so outdated that it can hardly be used anymore or you cannot get parts for it.  Wellness programs pressure people to be healthier at work to lower their employer health premiums, so workers are looking for healthy food to buy when they are shopping.

Those are the opportunities for innovation.

The Process of Innovation

Today I begin walking through steps I regularly travel to discover something different that will impact our customers.  I work in the food industry, and people's tastes are my pursuit.  We make one of the world's oldest staples--sliced bread.  We sell it in all the major supermarkets including Walmart in New York, PA, and New England.  We also produce specialty cakes, cookies, and artisan products for resellers and specialty stores.

As a regional producer, we do not have the global resources and scale of our competitors in the bread aisle of the supermarket. Yet, we have three products in the top 50, and are ranked #5 by IRI in branded bread product sales in Buffalo-Rochester--our primary market.  How do we do this?

Where Innovation Begins

1.  We stay close to our customers to know when to create a new status quo.

The relationship of people and food is interesting. In life, people generally resist change.  As children, our parents tried to get us to try something new, and we puckered our faces and spit out anything that was not what we already liked. 

Many people buy the same food every week at the grocery store, order the same Starbucks coffee every morning, and order the same dish when they eat out at one of their few favorite places.  

Yet, market signals do appear from time to time that the thinking and tastes of consumers do indeed change.  When an American society struggling with obesity discovered you could lose weight by not eating bread, we had a major market signal.  WHAT HAVE YOU INNOVATED FOR US?

Here is the catch--we need to know these changes are coming before they actually happen.  This is what authors Clayton Christensen and Scott Anthony term the "innovator's paradox."  When times are good and we have the time and capital to innovate, we often do not.  When times turn bad, it is too late to innovate. 

Although people started eating bread again after Atkins, the market is still signaling we will eat two kinds of bread--indulgence bread and healthy bread.  More and more customers tell us through their food spend "we want to eat healthy." 

The innovator needs to get out in front and innovate, telling their customers "we have heard you, and we know the way."  

TODAY'S LESSON:  Are you one step ahead of your customer?  Are your customers sending you signals that they need a change?  Do you have what they will need ready to go?

Next time:

2.  Identify the problem the customer needs you to solve for them.