"Sometimes We're Too Busy to Worry About Customers"

A few years ago, I was in Milwaukee with my sons. After visiting the science museum, we went to a nearby Pizza Hut where we placed an order and waited an awfully long time to get our pizza. This restaurant had a sit-down area with tables and several customers, but also obviously had a delivery business as well. During our wait, we watched an angry man who had been there before us finally approach the counter and ask why he still didn't have his pizza after waiting 40 minutes. The clerk pointed to some cardboard boxes and said that his pizza had been there for quite a while already. The man was indignant and asked why he hadn't been told when he had been sitting just a few feet away the whole time. The clerk explained with this simple excuse: "Sometimes we be so busy that we don't have time for customers."

So true!

It's not just pizza places that fall into these priority traps. Companies of all kinds may make this mistake, becoming so busy with operations and cost cutting and other initiatives that they lose track of the customers they may be losing. They lose track of their unmet needs and their frustrations with current offerings. They take them for granted as they focus on their own priorities.

One Fortune 500 company we (IE) met with told us something surprisingly similar - a refreshingly honest admission that numerous companies ought to be making. They admitted that they were complacent about their position and that they lacked initiatives for growth because "We're too busy." The busyness in operations made them strapped for resources in other areas. The result of this short-term focus was that they were unable to develop innovations effectively, and that meant that customers or potential customers were being neglected.

Are you too busy for your customers? Let me know so I can short your stock.

Disruptive Innovations in Financial Services

I was asked today for some examples of disruptive innovations in the financial services industry. Here are a few quick examples to consider:

Exchange-traded funds versus managed mutual funds

Easy, convenient, low-cost. “Worse” for not being professionally managed. Diversity of choices gives an customer freedom to play desired sectors at low cost. Incumbents (managed funds) are motivated to ignore.

Online discount brokerages versus stock brokers

Easy, low cost, “good enough” for low-end users and former non-users, again offering an asymmetric advantage over the services of professional brokers.

PayPal versus traditional payment systems

Simplifies transactions, allows people to make purchases more conveniently and securely. Incumbents are motivated to cooperate or ignore.

Peer-to-Peer lending systems (e.g., Zopa.com)

Lower cost, more convenient for many. Early stages: disruptive?

A Diagnostic for Disruptive Innovation

"A Diagnostic for Disruptive Innovation" by Scott D. Anthony, Mark W. Johnson, and Matt Eyring provides some useful guidelines to help innovators determine how an innovation might be deployed as a disruptive innovation. They offer 3 diagnostics to be considered:

1. Customer diagnostic - assess your customers and non-customers and determine if there are major unmet needs or overserved needs that could be the basis for a disruptive innovation opportunity.
2. Portfolio diagnostic - "This diagnostic involves looking at the technological characteristics of the innovation and at the potential business model by which the innovation might be brought to market." The goal is to find innovations in your portfolio that could be deployed disruptively to meet the needs of current and potential customers.
3. Competitive diagnostic - are there weak spots among your competitors that would prevent them from responding effectively to your innovation? Asymmetry of competitive advantage is what it's all about.

Put all these together and you can find guidance in properly deploying innovations to have disruptive potential.

Just don't forget the role of intellectual assets in doing this - something usually left out in the literature. More on that in our upcoming publication in JPIM.

Patenting a "Non-Infringement Composition"

If Maurizio Porcelli of Bergamo, Italy gets his way, he'll soon the owner of a US patent for a "Non-Infringement Composition." What a great idea! I presume that this composition causes non-infringement wherever it is spread. This could really simplify life for people struggling with patent clearance assessments and pesky infringement suits. And it could reduce the need for creative judges to find new ways to reduce the scope of patents. Let's just use massive amounts of Maurizio's Non-Infringement Composition to grease the wheels of patent-free progress.

One question remains: can we use this composition royalty-free?