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Enter the World of True Value Creation: From–Idea–To–Use Thinking!

Torkel Tallqvist, September 19, 2012

Tallqvist, Torkel: Enter The World Of True Value Creation: From–Idea–To–Use Thinking!

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How often have you heard someone say that your company needs an orderly process in order to turn your ideas into commercial products? And maybe you’ve heard that you’re good at engineering products, but lousy at marketing and selling them. What if these two problems are rooted in the same cause? If you have a poor product, your sales will be equally poor. Neither branding nor marketing will change this fact. Maybe the fallacy is the scope of thinking from idea to product? What if you were to think from idea to use instead? Perhaps that approach would resolve the two inherent problems? When we deal with path-breaking innovation, we’re trying to change the world, in essence, we’re trying to build a new belief system. In mature firms, innovation disrupts present product technologies; production, organization and customer structures; and the value of the offering. For these reasons, the innovation journey can last for many years. “Innovation is the art of interesting an increasing number of allies who will make you stronger and stronger”, said Akrich, Callon and Latour (2002). Figure 1 illustrates an authentic innovation case of a firm providing cargo handling solutions for maritime industry.

Figure 1. Evolutionary path of an innovation. What started from a coffee table discussion internally reached the first deal with the shipping company for the innovation nine years later! “It took far too long”, said the cargo solution firm’s business manager, “we need to put an orderly process in place for turning our ideas into a product”. Although, as any innovation expert would say, a span of nine years is typical. Along the way, the solution was reinvented three times, disqualified internally several times, and the person who initated the innovation had retired. Furthermore, a succeeding manager had been hired, fired, and replaced by a new manager; and instead of a final design, a prototype was launched publicly to attract customers. The contract manufacturing arrangement for the prototype in Taiwan turned out to be a major failure. The first customer was expected to be a ship yard in the Japanese market. The first customer, however, was a

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Chinese ship builder – a firm in a market where copies are made overnight. When the first contract was signed, yet there was no knowledge about real end user experience. In this situation, being first in the market, the cargo solution firm could only guess what the eventual cost level would be, what would be a competitive price and which design would eventually dominate the market. Those questions would remain open for three to four years after the launch. That is, just when they thought they had passed the R&D finishing line, the race for the dominant design had just begun. The principle of dominant design assumes that competitive offerings in the market evolve from a large variety of products to one that dominates, followed by incremental innovations on standardized products. “A dominant design is a specific path, along an industry’s design hierarchy, which establishes dominance among competing design paths”, said Utterback and Suarez (1993; see Figure 2). Technical uniqueness is not necessarily a predictor of an emerging dominant design, because, as these authors argue, there may be numerous other classes of user requirements. There are classes of demands other than the technological, which may be combinations of technological, economic, and organizational aspects comprising the dominant design in an industry.

Figure 2. Design Hierarchies and Dominant Design. The firm cannot decide who becomes the user of an innovation, how the user perceives its novelty, and to what uses it is eventually put. When the merits of innovation are being judged, the beauty is in the eyes of the beholder. Ultimately, the raison d’être of the innovation is given not by the firm itself, but by the external situation in which the innovation is used. When the dominant design evolves, the product knowledge of R&D is overtaken, but not substituted, by the knowledge related to the use of the innovation. It’s time to take off the R&D hat and put on the user’s hat. This leads me back to the raison d’etre of an innovation. The product as an object in the market, no matter how complete, is of no great importance. Tallqvist, Torkel: Enter The World Of True Value Creation: From–Idea–To–Use Thinking!

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Rather, attention should focus on the fact that the value is created in the customer’s usage process—and the full spectrum of value is not realized until individual consumers or industrial users make use of the solution (see Normann & Ramirez, 1993). What function does the product serve? Who is the customer? The first paying customer for an innovation will make a critical difference in the future life of the innovation. And here I want to emphasize the first paying customer, because this customer is the ideal source of financing for the innovation. Not only does the first paying customer bring legitimacy to an uncertain innovation case, but this customer will also help the   cargo solution firm understand what features and benefits of the new design are most valued?  The use of a product is commonly addressed in terms of usability. Usability is generally an ergonomic term and a successor of the term user friendly: “Usability is a product’s degree of efficiency and effectiveness of use within a specified range of users, tasks, tools and environment”, as Bennet and Schakel (1984) said. Commonly, usability discussion focuses on instrumental aspects, such as the new product’s technical and functional features, and its design and performance attributes. But the instrumental aspects omit the human-oriented dimensions of usability. Hassenzahl and Tractinsky (2006) have categorized the human aspects into a proposed pattern, as shown in Figure 3. They have given the human user experience three attributes: 1) beyond the instrumental, 2) emotions and affect, and 3) experiential. 

Figure 3. Dimensions of User Experience.

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Values beyond the instrumental refer to aesthetic, hedonic, and holistic user experience attributes. Beauty and design are examples of this facet. Emotional and affect qualities are those referring to subjective, positive, cause-and-effect attributes, such as personal growth and self-expression. Thorstein Veblen (1899) introduced the notion of conspicuous consumption, referring, for example, to the way goods are chosen for their social value rather than their usefulness. The use of handbags, fashionable clothes, and jewelry fall into this category. Experiential values are situationaly and temporally bound. This view refers to the interaction between the product and internal states of the user: mood, ambitions, and expectations, during a particular interval. It’s like lying awake all night because of a thrilling story, which unfolds while reading. I now shift perspective to the creators of usefulness—the innovation activists themselves. In particular I highlight the pattern of their thinking (Figure 4); the result of my studies provide valuable units of analysis for extending one’s thinking from idea to product to idea to use. In the minds of the innovation activists, the conception of use refers to the act of using the innovative product, the instant experience resulting from use, and the outcome as enduring benefits from the use. This bundle of ideas combine the principles of value creation and user experience. This pattern of thinking reminds me of the importance of considering the influence of location of use (Figure 4).

Figure 4. Cluster of Knowledge Related to the Use of an Innovation. At this point I have to mention that, in their minds, the idea of product engineering, features, and requirement are particularly associated with the discussion about the activity of use. The equation also indicates the connection between the idea of use and the idea of business thinking. When the schema is translated into the language of the innovation activists, you hear them say: Tallqvist, Torkel: Enter The World Of True Value Creation: From–Idea–To–Use Thinking!

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By turning the key, you unlock the door. We are engaged in the act of locking the door, triggering the momentary feeling of safety, as the door is firmly closed. Our business is all about comfortable use of the door. Does this expression not highlight the difference in attention when you compare the idea to product discussion to the idea to use discussion? Broadening the scope to idea to use means, of course, confronting new sets of difficulties: the organization-management-related problems, for example. A common truism in organizations is that the R&D people and the marketing people blame each other for anything that goes wrong. The marketers, so the story goes, are fixated on advertising media, advertising brochures, the attention value of advertising, and trophies to be won in design competitions. And R&D people are preoccupied with technical solutions for making the product work reliably. I argue, then, that the social structure in the firm is the issue, as illustrated in Figure 5, which demonstrates how we are limited by our preoccupations.

Figure 5. The Prison of Our Preoccupations. One pitfall is the categorization of roles into R&D, sales, marketing, production, human resource, and finance departments. The titles assigned to people—VP, Director, Manager—is the same trap on a micro level. The key question is “Who are the prime movers of innovation?” At the end of the day, innovation is work of a few people with creative skills, constructive attitudes, great enthusiasm, and a significant capacity for work. A second pitfall is the modus operandi of a firm. The white-collar employee is constrained by impulses from an individual working environment. That environment is a world apart from that of the user, as illustrated in Figure 6.

Tallqvist, Torkel: Enter The World Of True Value Creation: From–Idea–To–Use Thinking!

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World of the manager / World of the user Figure 6. The Reality Gap. “We do not live our product”, said one innovation activist. And that says it all, doesn’t it? The manager who shares life with the users has a good perspective. To understand the world of the user, the manager spends less time at the office and more time out on the arena of the end user.

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Conclusion. What I’ve said here doesn’t mean, of course, that I believe innovations don’t require courageous people with initiative, laboratories for technical experiments, creation of prototypes, and project management systems. But if managers limit themselves to thinking idea to product, they are simultaneously limiting their chances for success. Furthermore, they are reinforcing the fixation—the silo thinking—that the incapable sellers and marketers are the problem, or that the marketers remain a secondary profession in the organization because they have a Mission Impossible— selling the semi-complete products, limited to those attributes that the R&D people understood.

Tallqvist, Torkel: Enter The World Of True Value Creation: From–Idea–To–Use Thinking!

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Enter the World of True Value Creation: From–Idea–To–Use Thinking!  

Essay September 19, 2012.

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