Sari van Poelje

personal, expert, consultant, author, Speaker

Smells like the happiest day of your life – anticipation & setting up the looping process… — July 25, 2018

Smells like the happiest day of your life – anticipation & setting up the looping process…

 

 

Smells like the happiest day of your life – anticipation & setting up the looping process…

One of the organisations I consulted for was a leading manufacturer of flavours and fragrances. They are one of the largest unknown companies in the world – their products are integrated in almost every household and luxury item you use. I was asked to help this company at a time when it was slipping from first to fourth place in the ratings. One of the reasons was the incredibly high overhead. Another was its inability to anticipate customer needs. I worked with the company during a three year period helping put into place processes that would help them anticipate, streamlining their innovation platform and increasing cross functional cooperation.

One of the anticipation processes we instigated was a widespread network of students and other volunteers who scoured their local markets, restaurants, and fashionable jaunts to spot the new flavour and fragrance trends in their city. After a short training by the company’s perfumers and flavour engineers they learned to input their impressions into an intuitive app. This raw data was then funnelled to the people in charge of creating new essences.

The most memorable experience I had was participating in a meeting of perfumers, who were using this raw data for the first time. I was in a room with 20 of their leading scent engineers when the head perfumer marched in: “We have to create a washing powder that smells like the happiest day in your life”. From where I sat in the back of the room this seemed an impossible task.

First they reviewed all the data that had come in from their anticipation scouts, in that particular geographical area. They identified a couple of trends. Then they started their introspective work. Each one of them talked about their happiest day, laughing, and sometimes crying together. The birth of a first child. A wedding day in summer. Their partner getting well again. After everyone had had their turn the head perfumer got up, wrote a chemical formula on the board and turned to the group: “So is this about it?” Yes, they all said. I left the room awestruck by what just happened – intuitive anticipation at its best.

What is intuitive anticipation?

Anticipation is the ability to visualize a future event, enabling you to take pro-active initiatives. It consists of two factors: looping and learning.

Looping means that there are organisational processes in place that enable the intuitive sensing of the environment. These processes enable leaders to collect raw data from stakeholders, competitors, customers and the wider market about future trends and developments. Aggregated judgements of many consistently beats the accuracy of the average member of the group. The key is recognizing that useful information is often dispersed widely with each person holding a different scrap (Tetlock & Gardner, 2015).

Learning means that an organisation has ways to create meaning from this raw data, and create transformative strategic scenarios. Linear approaches to strategic planning worked in the 1960-1970s because the environment was relatively stable. Given the rising degree of uncertainty linear approaches don’t suffice anymore. Scenario planning helps in all issues that involve complex dynamics, with a diverse set of stakeholders and varying knowledge bases, with a problem that requires interdisciplinary collaboration to address (Chermack, 2011). Scenario planning recognizes the unpredictable nature of the future as a learning activity.

Looping and learning processes are essential to design an innovative business.

Most entrepreneurs have a finely honed sense of anticipation. They can almost smell the newest trends and customer needs, sometimes even before the customer knows it. They are broadly interested, have a diverse network, share their thinking with like minded entrepreneurs. As a company grows the original founder spends more time looking inwards, throwing up protective barriers to the outside world. When you are able to keep these barriers open, look outside of yourself and the organisation, you can keep a strong connection to your intuitive anticipation.

Radical Agile Transformation Exercise – Train your intuitive anticipation

You and your team can train your intuitive anticipation process – you can improve your looping. Here are 17 quick ideas to help get you started, place a tick next to the ones you are already doing.

  1. Select or create good learning environment, relevant and  exacting.
  2. Seek feedback actively and systematically.
  3. Impose circuit breakers, become mindful of automatic reactions.
  4. Acknowledge emotions, treat them as data.
  5. Explore connections, use narrative or images.
  6. Accept conflict in choice, every decision is a trade-off  between using scarce deliberate system and incomplete information.
  7. Make scientific method intuitive: observe better, speculate  consciously about what you see, test ideas, generalize carefully.
  8. Focus on questions where your work will pay off, so not clock like questions, not too far out.
  9. Unpack question into components.
  10. Distinguish between known and unknown.
  11. Leave no assumption unscrutinized.
  12. Adopt outsider perspective and put problem in comparative view. No problem is unprecedented or unique.
  13. Adopt inside view that plays up uniqueness of problem. Look for clashing causal forces at work in each problem.
  14. Compare similarities and differences between your view and others’.
  15. Synthesize all views into dragonfly vision.
  16. Express probability as finely grained as possible.
  17. Update forecast using many sources of information without under or over reacting.

For all that you haven’t ticked, consider ways you can start building your intuitive anticipation skills.

Bibliography: References & links

Granularity predicts accuracy (Tetlock & Gardner, 2015)

 

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Are you committing any of these innovation monetizing failures? — June 18, 2018

Are you committing any of these innovation monetizing failures?

Are you committing any of these innovation monetizing failures?

One of the companies I worked for is a startup that made 3D goggles for medical applications at the start of the millenium. Better than anything that was on the market then. How cool is that for doctors – being able to actually stand inside a patient’s body and have a real look see? Unfortunately this was a classic startup failure. The two brothers started the company, with their father as financial backing, with a lot of techy know how, but no business know how. They looked for partners to help them commercialize. Their first investor fleeced them. Their second partner ran away with crucial copyrights. And then they found out nobody was willing to pay for their invention. Innovation and commercialisation need to go hand in hand – before the first prototype is launched you have to ask your potential customers: what would you be willing to pay for this?

Companies are face increasing downward pricing pressures leading to job losses and cutbacks. The consumer goods business is particularly vulnerable, with giants such as P&G and Walmart feeling the pressure (see WSJ article in references). An overwhelming majority (83%) of C-suite executives surveyed by Marketing Week (see references) reported they were facing increasing price pressure. Most companies (77%) plan to innovate themselves out of this dilemma with new products, services, and business models.

The need for successful innovation is clear, but plenty of innovative ideas fail, never get off the ground or fall into obscurity. In their book, Monetizing Innovation: How Smart Companies Design the Product Around the Price, Ramanujam and Tacke have noticed four types of monetizing failures:

  1. Feature shock – too many features in one product, that are unwanted by customers, creating overpriced solutions. When a company attempts to create products that are ‘all things to all people’ they often find they are ‘nothing for nobody’. This failure typically occurs in product driven or engineering cultures. A good example is Amazon premium smartphone which was launched in 2014, and included 3D dynamic perspective, mayday technical support, firefly and plenty of other features. It launched in July 2014, at $199 with a two year contract and just four months later it was cut to $0.99.
  2. Minivation – when a company innovates the right product for the right market, but price it too low to achieve full revenue potential. This most frequently occurs in risk averse cultures, where they are more concerned with adding a markup to the component costs to make the product, when they should be looking at the value the components add, and what the customer is willing to pay for it. Playmobil launched Noah’s Ark in 2003, they sold out in just four months, and then customers started selling it on ebay for a 33% markup on the price.
  3. Hidden gem – these are the potential blockbusters never properly brought to market. In traditional business cultures there may be a degree of ‘core business coddling’. Kodak got clobbered in the digital camera arena. Ironically Steven Sasson had invented the technology behind digital cameras, but it threatened core business film, so Kodak didn’t launch their first digital camera until 1995, and didn’t get serious about it until 2001. Kodak declared bankruptcy in 2012. Since 2015 they’ve been trying to resurrect their business around their patents.
  4. Undead – innovation customers don’t want, wrong answer to right question or answer to question no one was asking. This failure often occurs in top-down, discouraging feedback cultures. The Segway, hyped as a breakthrough, personal transporter, was priced much too high. Google Glass was an undead product for a target audience who already had a smartphone.

These four failure mechanisms have common ancestry – the culture of the organisation. Innovation needs the right culture.

Failure to include your customers in your product development process leads to a product nobody wants.

RATE: Radical Agile Transformation Exercise

It is better to sell an optimized innovation, than not sell a maximized innovation. Ask:

  1. What new concepts, processes or products have you developed in the last two years?
  2. How did you know it was the right product?
  3. How did you know it was the right target audience?
  4. How did you check?

Bibliography: References & links

Price War Pressures Consumer-Goods Giants – https://www.wsj.com/articles/p-gs-price-cuts-ripple-through-consumer-products-1516724949

Downward price pressure at ‘unprecedented’ levels – https://www.marketingweek.com/2014/09/12/downward-price-pressure-at-unprecedented-levels/

Monetizing Innovation: How Smart Companies Design the Product Around the Price, Madhavan Ramanujam, Georg Tacke, Wiley, May 2, 2016

Steven Sasson: https://en.wikipedia.org/wiki/Steven_Sasson

 

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The dream customer — May 29, 2018

The dream customer

 

The dream customer

In 2012, the first major collaboration between Chrysler and Fiat produced a brand new version of the classic 1970s Dodge Dart, to a lukewarm reception. Why? At least three reasons: including a manual transmission for a mainly automatic transmission buying audience; installing a European style dual clutch, for mainly American buyers and entering a tough, competitive market. Did they really consider their dream customer?

When developing the SUV Cayenne, Porsche, on the other hand, had their product team do extensive surveys with potential customers, evaluating what features they would pay for and removing features they would not pay for.

So, how did Chrysler get it so wrong? There are five common mistakes in dealing with customers:

  1. Providing an overwhelming number of choices.
  2. Incongruence between promotion and practice.
  3. Relying on technology when they need the human touch.
  4. Inability to do the basics well.
  5. Explaining in overly technical jargon.

When you fail to include your dream customer in your product development process you succeed in creating a product nobody wants. By understanding your dream customer, what they need, their pressing issues, and where their pain is, you can develop products and key innovation projects to serve.

“When you fail to include your dream customer in your product development process you succeed in creating a product nobody wants.”

RATE: Radical Agile Transformation Exercise

Do you know who your dream customer is?

There are 3 steps for understanding your dream customer:

  1. Consider the big issues they are facing – look wider and investigate global issues, such as hunger, environmental sustainability or education.
  2. Identify the industry trends that are affecting them – technology, big data, cyber security, etc.
  3. Describe your customer avatar now – make a collage including their goals and values, demographics, their pain points and challenges.

Now work out how you can help them:

  1. What key innovation opportunities can you offer – what innovation projects will make a real difference, that are market focused, innovative, exciting and inspiring.
  2. Select customers who like, know and can afford you.
  3. Redefine your purpose so you can serve your dream customer.

 

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What are the key learning moments in your leadership? — March 15, 2018

What are the key learning moments in your leadership?

 

What are the key learning moments in your leadership?

When I was a global talent director I sent managers to very expensive training courses but soon realised they were not learning anything. By learning I mean changing behaviour. So I set out to understand what were the key learning moments that actually led to behavioural transformation.

When successful managers are asked how they learned to lead, most of them will say they learned through on the job experiences. Research confirms that on the job experiences contribute significantly more to learning than knowledge or skills oriented training. But what experiences contribute most to their learning?

“Training programs were not mentioned as key learning events, except when accompanied with personal coaching or confrontation of behaviour.”

The Center for Creative Leadership (CCL®) has done a lot of research which shows that there are five key learning events that managers name time and again: mission impossible, set backs, role models, conflicting norms and values, dealing with subordinates. In our research (1998) we added dealing with the political arena and personal experiences as key learning events. Let’s take a quick look at all seven.

  1. Mission impossible: Seemingly impossible assignments which have to be completed under pressure (time, money resources) but eventually lead to success, such as multi-disciplinary projects, switching from staff to a line management job, managing large virtual teams.

One manager recounted having to lay a pipe line through the desert, while having to deal with the fact that the local population kept dismantling the pipes to make water reservoirs. This situation forced the manager to reassess his usual linear engineering approach. He had to call together a multi-disciplinary team including the chieftains of the local population to solve the problem, and has been working that way ever since.

  1. Set backs: Mistakes and failures, demotions or missed opportunities are all examples of setbacks in business.

One manager told of his career move within the music business from a small to a large label, where he became one of the suits. He learned the hard way that being a manager was not half as much fun for him as working with the artists, and applied successfully for his old job.

  1. Role models: Different types of role models exist. The sponsor and the guide are positive examples; the regent and controller are negative examples. Both positive and negative role models have an important effect on learning leadership.

At an early stage of their career managers tend to copy or reject a management identity (I don’t want to be like him). More senior managers choose specific characteristics of their role models that they want to copy e.g. I like the way she gives feedback.

  1. Conflicting norms and values: Situations where the personal values conflict with business interests.

For instance, one manager had to get a deal in a country, where it was quite common to pay bribes to officials. The core value of the company was integrity. This manager learned to take a stand for their own values while negotiating a way to accommodating the national way of doing things.

  1. Dealing with subordinates: Young leaders talk often of managing their first team as a key learning event. Dealing with performance issues comes up time and again.

One manager told of an employee who had stolen from the kitty to pay for a colour television. It was the week of the world championships football. Because the man had been with the company for over 30 years, and had always performed loyally and well, this manager negotiated a deal whereby the man had to pay back in instalments. Meanwhile the television was put in the canteen for all to enjoy. He said he learned to be flexible in his approach to people, but hard on the task because of this event.

  1. Dealing with the political arena: Many professionals who became managers talked of politics as a key learning event.

One manager was responsible for the introduction of a new international product line. During his market research, he discovered that introduction of this product was a bad investment in the Netherlands. Even though it was the Dutch CEO´s baby, he argued his point in the Board. He learned that it would have been wiser to lobby for his point beforehand, but also that the continued support of his manager was his lifeline, and that changed his behaviour towards his employees.

  1. Personal experiences: Many managers spoke of the death of a close family member or the birth of their first child as key learning events.

One manager spoke of the fact that his mother said on her deathbed: “If I look back on my life now I am only sorry I didn’t grab all the chances I got. Why are you always so careful and calculating son – sometimes you just have to take chances.” After she died he found a new job, got married and bought a house. This manager says he learned to take risks and trust people’s process much more because of his mother’s last words.

Radical Agile Transformation Exercise

  1. Look back on your life, what have been the key learning moments?
  2. Can you identify a learning moment in each of the seven categories mentioned?
  3. Write down the event and your interpretation.
  4. How does this learning affect your behaviour as a leader today?

Bibliography: References & links

The Center for Creative Leadership (CCL®) – Lindsey, Holmes and McCall, 1987 – http://www.ccl.org

 

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IntactAcademy.com SarivanPoelje.com TeamAgility.com