Book publishing faces turbulent times. While the market is growing, key parts of the business model are coming apart at the seams. Market segments are fragmenting, price points are changing, channel power is shifting, and barriers to entry are lowering. Even the definition of "a book" is in question. Is it the medium (printed pages between two pieces of cardboard, electronic, online)? Or is it the message (the story, the characters, the themes)? When an industry faces turmoil, there is only one thing to do - innovate!
For this month's LAB, lets innovate the plain old, everyday book, an idea that goes back 5000 years. We will use the corporate innovation method, S.I.T.. It is based on five patterns. We use the patterns to create hypothetical, abstract "solutions." Then we work backwards from the solution to try and identify potential problems that it solves. This works well because there is an asymmetry in people's thought process effectiveness when it comes to creativity. People are more fluent and easier with searching for benefits for given configurations than finding the best configuration for a given benefit or function. The term for it is called Function Follows Form.
Airline service innovation seems like an oxymoron considering the industry's reputation for low quality. But the industry is fighting back to improve its image. Companies that specialize in inflight entertainment as well as airframe manufacturers are accelerating the use of new technologies to deliver more value in the air. That's good news for an industry that has focused way too long on cost-cutting. The next battle for supremacy will be won by airlines and aviation companies that innovate services across the experiential "journey" in a sustained way. For this month's LAB, we will create new-to-the-world concepts for the inflight service experience using the S.I.T. tool set.
We begin by creating a list of the components of the product or service. We select a component and we further break it down to its sub-components or attributes that we can focus on. We then apply a tool to that component to change it in some way. Working backwards ("Function Follows Form"), we envision potential benefits of the modified service to both the customer and the company.
Here is a list of components:
Business model innovation was one of many hot topics at Innovation Suite 2011. The conference hosted thirty two invitees from nine countries and a variety of companies including GE, Bayer, Kraft, and SAP. On the minds of many was how to create new business models to transform a company and move to higher ground.
Business Model Innovation is defined as follows (from Wikipedia):
Business model innovation results in an entirely different type of company that competes not only on the value proposition of its offerings, but aligns its profit formula, resources and processes to enhance that value proposition, capture new market segments and alienate competitors.
Here are four ways to conceptualize a new business model:
Facebook innovated its way to become the dominate social network with 600 million users in just six years since launch. What will it do for an encore? More importantly, how will it continue to innovate? For this month's LAB, we will apply the Attribute Dependency tool to demonstrate how Facebook might continue re-inventing itself.
To use Attribute Dependency, make two lists. The first is a list of internal attributes. The second is a list of external attributes - those factors that are not under your control, but that vary in the context of how the product or service is used. Then create a matrix with the internal and external attributes on one axis, and the internal attributes only on the other axis. The matrix creates combinations of internal-to-internal and internal-to-external attributes that we will use to innovate. We take these virtual combinations and envision them in two ways. If no dependency exists between the attributes, we create one. If a dependency exists, we break it. Using Function Follows Form, we envision what the benefit or potential value might be from the new (or broken) dependency between the two attributes.
Here are attributes of the Facebook experience:
The cosmetic industry thrives on innovation and fashion design especially in the areas of product development and retail merchandising. It generates nearly US$200 billion worldwide and is growing. For this month's LAB, we will use the corporate innovation method, S.I.T., to create new innovations for lipstick, a product that dates back to the ancient Egyptians.
S.I.T. works by taking one of the five patterns (subtraction, task unification, division, multiplication, and attribute dependency) and applying it to an existing product or service. This morphs it into a "virtual product," which is an abstract, ambiguous notion with no clear purpose. We then work backwards (Function Follows Form) to find new and useful benefits or markets for the virtual product.
Here are five innovations created by *students at the University of Cincinnati as part of the innovation tools course.
Here is a nice example of the Subtraction tool of the corporate innovation method, S.I.T.. Imagine painting a picture without the paint. From PSFK:
From metal to billboards, Portuguese artist Alexandre Farto aka Vhils is regarded for his work across a variety of mediums. However, his “Scratching the Surface” style (which we first noticed here) is particularly remarkable. Using decrepit city walls as his canvas, the artist carved faces from the concrete, unmasking the beauty inherent to even the most neglected spaces. The pictures below are taken from Moscow, London, and all over Italy.
To use Subtraction, start by listing the components of the situation, product, service, process, etc. (The method works with just about anything that can be conceptualized into components). In this case, the innovator (artist) would create a list something like this:
In 1817, Sir William Cubitt innovated the treadmill as a method of reforming prison convicts who got out of line. Today, that "torture" continues. According to the Sporting Goods Manufacturers Association, fifty million Americans use a treadmill. Sales of treadmills are $1 billion annually of the total $4 billion fitness equipment industry. For this month's LAB, we will use the corporate innovation method, S.I.T., to create new-to-the-world concepts for the ubiquitous treadmill.
S.I.T. works by taking one of five patterns (subtraction, task unification, division, multiplication, and attribute dependency) and applying it to an existing product or service. This morphs it into a "virtual product," which is an abstract, ambiguous notion with no clear purpose. We then work backwards (Function Follows Form) to find new and useful benefits or markets for the virtual product.
Pro-Form's Le Tour de France Indoor Cycle lets users choose or create real-world routes, then adjusts the angle of the riding platform to replicate the experience of riding up and down those roads. This new product has three different features using the Attribute Dependency Tool of the corporate innovation method, SIT.
Corporate training is a $60 billion dollar industry and growing as the economy recovers. As with any industry, significant changes are occurring. Companies spend less on fixed internal resources and are outsourcing more. Learners are changing in the way they learn, perhaps due to the generational shift. And of course, technology has made the social side of learning more available and effective. Training executives, those who manage company training resources and programs, must continue to innovate to address these changes to stay relevant.
For this month's LAB, we will apply the corporate innovation method, S.I.T., to a training program. Our goal is to find new-to-the-world concepts that improve a company's training efforts. The method works by applying one of five innovation patterns to components within the training environment. The pattern has the effect of morphing the component into something that seems unrecognizable or ambiguous. We take that "virtual product" and work backwards to uncover potential benefits or markets served, a process called "Function Follows Form."
Software runs much of our lives. It runs everyday items like computers, automobiles, banking, telephones, and even kitchen appliances. Software will affect more of our daily routines in the future. According to market researcher DataMonitor, the global software market will grow to $457 billion, an increase of 50.5% since 2008.
The problem with software is you cannot see it. The term was coined originally as a prank to contrast the term, "hardware." Unlike hardware, software is intangible - it cannot be touched. So how do you innovate software especially with a corporate innovation method like S.I.T.? This method uses the components of the product or service as the starting point. Companies sometimes struggle creating new applications because software seems too abstract.
The secret to using S.I.T. on software is this. Don't innovate the software code; rather, use the innovation method on what the software does. Apply the method to the products and processes that the software affects. This will create new-to-the-world innovations. Then, write the software code that implements these new applications.
Here is an example with the software program, Quicken. We start with a component list of a routine process within the software - creating an invoice.