You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new. Steve Jobs
I was talking to a university administrator the other day, and he was describing the differences between traditional (4 year on-campus) and online students. He told me online enrollment was around 90% of total enrollment. However, the university was spending over 60% of their total expenses on the traditional on-campus students. This is a telling example of how we analyze our businesses in terms of outdated parameters. We misallocate resources, underestimate the need for change, and avoid potential solutions. There are a number of other examples that are affecting our personal and business lives including:
- The “traditional” family with two parents, two children, and a dog is now a minority. Many families are now single parent homes.
- Many still think of the U.S. as a white dominated population. However, over 50% of current births and about 45% of the overall population are non-white.
- Over recent years, America lost over 12 million manufacturing jobs. The work force is dominated by service and technical jobs, and union membership is at its lowest level in decades.
- The female work force has grown from 39% in 1973 to 47% in 2009.
- Between 2010 and 2030, the U.S. population over 45 years old will grow from 39% to 45%.
- 70% of the world and 90% of the U.S. population now have mobile phones. In addition, there are between one and two billion personal computers in the world– up from a few hundred thousand in the 1970’s.
In short, markets need to be described as spectrums or segments involving products, technology, and demographics. Programs need to include new definitions of operations, customers, competition, and marketing. In addition, they need to offer integrated solutions to recognize changing demand, consumers, and opportunities. For example, the decline of print advertising and the availability of other detailed marketing information require new marketing strategies and approaches. A few examples illustrate how organizations are using new paradigms in their efforts:
Retail stores illustrate the new complexity. While stores like Best Buy, J.C. Penney, and Sears have uncertain futures, retailers like Wal-Mart, Target, Amazon, Costco, Macys, and Nordstrom’s seem to be thriving. However, they each have quite different models and strategies. Their marketing, pricing, margin, and inventory practices are all significantly different. It is important to recognize that the same consumer frequently shops all of these outlets with varying expectations and results. It is the development and execution of the strategy that causes success rather than determining which strategy is best.
The IPhone and Android-based smart phones are probably the best examples of the new paradigms. It is not really an IPhone. Rather it is a phone, map, shopping vehicle, game board, search vehicle, e-mail and texting tool, and camera–amongst many other things. In an informal survey of how people use these devices I found 80-90% of those questioned described their primary use as something other than a traditional phone.
Ideo is an award winning global design firm that takes a human-centered design based approach to helping organizations in public and private settings innovate and grow. They identify new ways to serve and support people by uncovering latent needs, behaviors, and desires. Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success .The design thinking process is best thought of as a system of overlapping spaces rather than a sequence of orderly steps. There are three spaces to keep in mind: inspiration, ideation, and implementation.
In short, while qualities like experience, best practices, and reputation are still critical determinants of success, the “we have always done it that way” approach is dead. Even Apple and Facebook, the poster children for innovation and growth, saw their stocks dramatically decline recently. What is needed is a constant focus on innovation, feedback, research, and measurement. We simply need to accept that paradigms and traditions are changing faster than ever and that individuals and organizations need to react to those changes.
The statement by John F. Kennedy, “some people see things as they are and I see them as they could be” represents a concise and relevant statement on the dynamics of change and innovation.