The Heretech

Want innovation? Hire a good SE.

Service companies definitely understand business problems better than product companies. Case in point: I've been talking a lot lately to both kinds of companies about innovation. When you ask vendors the question, "How do you approach the innovation process?" service companies, on average, say something about business problems first. Product companies, on average, talk about technology.

By no small coincidence, many product companies are now trying to figure out the kind of solutions in which they might play a role. That question has two sides:

1. How do we fit into solutions where we already play a part? If we were to learn how customers really use our technology, we might have an easier time marketing and selling it to them. We might make better investments in our product roadmap, or in our larger portfolio.
2. How might we fit into other solutions where we could play a part? The path of least resistance for market development is finding new business problems to address in our existing accounts. But do these opportunities really exist?

While "technology in search of a problem" might sound silly, that's exactly the challenge that product companies face. They might genuinely want to understand customers better, but they're starting from a greater distance from the actual use of technology than service companies.

Happily, within product companies, there are shortcuts to understanding the customer better, and learning how to think about solutions first and technology second. In product companies, there are employees who deal with customers on a daily basis. They see how technology snaps into place as part of a larger solution architecture.

Many heads of PM teams have told me that sales engineers often make the best new product managers. They've been close to both the customer's use cases and the vendor's technology. They've learned how to speak the customer's language, and they've met the business and IT stakeholders who play critical roles in projects.

Therefore, if you want to hire someone who can help innovation start with customer problems, SEs are good candidates. Unlike support technicians, they participate in both the successes and failures. Unlike consultants, they have greater participation in the phases when the customer is struggling to figure out how the technology will be part of the solution. They have the technical bona fides to deal with the development team directly.

SEs also have a good sense of the features and capabilities that are essential to delivering value to the customer. Many good SEs can help filter enhancement requests better than someone who has not had as much direct experience with customers. For any tech vendor who wants the biggest bang for the smallest development buck, that's a pretty valuable skill.

[Cross-posted at The Forrester product management blog.]

What kind of innovation should you pursue?

This morning at the Business of Software 2009 conference, I heard an excellent talk by Geoffrey Moore on (surprise!) how technology company should use innovation to achieve company success. The emphasis in the previous sentence is important, since a lot of companies struggle, or even fail, because they don't make the connection between the idea and the company.

The core idea of Moore's talk was, Not all forms of innovation are the same. For example, some innovations help companies differentiate themselves from the competition. Other innovations keep companies in play, when prospective customers are pondering which vendors they should take seriously. Finally, there are innovations that increase operational efficiencies.

You'll notice that the way in which Moore is using the term innovation has less to do with the idea itself, and more with the outcome of bringing the idea to market. That shouldn't be surprising, if you've kept the difference between invention and innovation clear in your mind. The idea--big or small, prosaic or revolutionary--is the basis of invention, not innovation.

People in the business of innovation management tools certainly are getting this message. Accept Software, for example, is certainly one of many ISVs in this area who realize that the innovation process that they model, support, streamline, etc.  is bigger than just the idea. Suggesting and voting on ideas is a process worth supporting, but so too is quickly translating the idea into concrete requirements, and fitting the idea into the larger portfolio. That, according to the people at Accept, is why they have products in all three areas.

Unfortunately, in the technology industry, we're still a significant distance from a collective understanding of what innovation really means. The speaker right after Moore, Paul Graham, asserted that the founders in technology companies will play a stronger role, over time. Even if it were true, as Graham argued, that "hackers" can understand business more easily than business people can understand "hacking," it's not the case that the same people should focus on generating new ideas and nurturing the business. Even the greatest minds among us aren't good at everything, and they definitely don't have time for everything.

Companies that make the right guesses about the type of innovation they should emphasize, build the strategy that spells what to do next, and succeed at executing this strategy, are the collective triumph of some people who generate ideas, others who fit them into the company strategy, and make sure that the company acts quickly and successfully on all fronts.

How an ISV uses "inbound" social media

In this week's Heretech podcast, I spoke with Alex Bender of Archer Technologies about the role the Archer community plays in the development process, all the way through the release. If you click the thumbnail shown here, you'll see their process in graphic detail. While Alex and I didn't get into all the specifics of how they do it, we did cover most of their "social product management" approach in the podcast.

Among other interesting aspects of how they use their community as a resource for innovation and adoption, the role of partners really stands out. Of course, in the governance, risk, and compliance (GRC) space, you have an ecology of partners who are experts in things like Sarbanes-Oxley and risk management best practices. They'll tell you in plenty of detail why your product isn't really doing the job it should as a GRC tool.

GRC implementers and advisers have a very explicit kind of domain knowledge. However, if you stop to think about it, almost any partner has domain knowledge that's valuable to ISVs. To cite an obvious example, how does the average organization implementing your technology define the project? What obstacles do you impose at the critical landmarks in the implementation?

We usually talk about communities as consisting of customers. However, I think it's worth including partners whenever you talk about your community strategy.

Are platforms a drag on innovation?

I agree with about half of this op-ed about Microsoft and innovation. A sample disagreement: being second to market with a technology is not a bad thing, innovation-wise. Not only can you work out the kinks in the core invention, but you can learn from your competitors' efforts to get sales and adoption.

I do agree, though, that Microsoft often takes good ideas and makes them very Microsoft-centric. Of course, they're hardly the only company to be guilty of that particular sin. IBM, Oracle, SAP, and other technology companies have taken very good ideas and tied them too exclusively to the platform, or slowed the natural trajectory of new technologies so that, at every step, they stay firmly attached to the company's underlying platform.

Of course, from the vendor's point of view, selling the platform is the goal. While there may be some business benefits to the customer (simpler vendor management, fewer risks dealing with smaller vendors, etc.), there are big and obvious down sides, too.

For example, not everyone is thrilled about moving to the next generation platform, and the next generation after that, at the pace the vendor fervently wishes you would. Frictions between customers and vendors result, along with the occasionally perverse business outcome. (Apple's market share of operating systems declined slightly in 2008, for reasons that had nothing to do with Apple. Most netbooks run Windows XP, the OS that customers have preferred over Vista.)

Anything that becomes an end in itself for the vendor becomes an obstacle for innovation, almost by definition. The pace of invention may continue, but the aggressive arm-twisting about the platform on which these inventions run can slow down adoption. As I mentioned earlier, platform-centric product strategies sacrifice development in any particular technology area (BI, CRM, content management, identity management, cloud computing, you name it) in the name of staying in pace with developments in the platform. Limited time, limited resources--development teams can't do everything that both customers and their corporate masters demand.

The XBox, Microsoft's successful venture into home entertainment hardware, provides further proof. The XBox is not your home entertainment platform, around which your TV, DVR, DVD player, MP3 player, receiver, and other components revolve. It's a very good console game system, and that's why, in part, it's still a raging success, because all the hardware in your family room doesn't depend on it.

That product strategy may not have been what Microsoft intended when it launched the XBox. However, how many times have products failed because over-enthusiastic executives thought, "Why, with this platform technology, I can rule the world!"

Mind your own business

On Twitter, Jim Holland asked an excellent question: "Should CEOs also act as chief innovators?" (Click here to read the article that inspired Jim's message.) My short answer is, start with the assumption that the answer is an unequivocal No.

If the CEO isn't able to focus on minding the business, who is? Many brilliant inventors do not have the skills to be captains of industry. And even if they had the skills, these wannabe-CEOs might inadvertantly let their personal investment in the technology distort their perspective on the business. For example, if you're not making the big money you expected, is the problem that the product lacks key features, or that you've failed to market or sell it correctly?

Obviously, it'd be silly to argue that no one could ever juggle both roles, because there's no small number of people who have succeeded at being the CEO/inventor. (Whispered aside: as a mental exercise, try not to mention Steve Jobs the next time you're in a discussion of this topic.) My argument is, your chances of success increase if you start with a different model in mind, and work your way backwards to the CEO/inventor.

When 109 is too small a number

Jorge Barba posted a list of 109 innovation-stopping phrases. Come on, people, you can think of more! Here are my additions:

• There's no time! (You might call this the Jack Bauer excuse.)
• Where's the supporting evidence? (Often stated by people who steadfastly refuse to provide any evidence for their position.)
• Customers don't know what they want.
• Customers don't know a good innovation until they see it. (Sometimes used to quash good ideas, when used as a synonym for the previous excuse.)
• You have no appreciation for what Development does. (While it may be true, this statement does not ipso facto invalidate the idea.)
• The CEO hates that sort of thing.
• But we have to invest our precious resources in beating the competition. (Rather than trying to differentiate yourself from the competition.)
• That's a pretty long-pole project. (Sometimes a synonym for, "I wouldn't enjoy working on that project.")
• We'll take that under consideration. (As opposed to, "Let's talk about the next steps.")
• If this works, we'll be heroes! (Which raises the question, why is a heroic effort required?)

Innovation and social media

Last week, I did a presentation that linked the recent research on inbound social media to the innovation process. Many thanks to Accept Software for inviting me. Here's the recording, and here's the written Q&A that followed.

Innovation's moment of truth

You just got out of the meeting with potential customers, and they're not big fans of your Big Idea. You were sure it was brilliant, but they just don't get it. Or they applaud the effort, but they think you're going approaching it from the wrong angle.

Here's the moment of truth when many projects go bad, and sometimes drag companies down with them. The crisis isn't unique to the technology industry--there's the cautionary tale of New Coke, after all, from a well-established industry that should have known better--but given the immaturity of the technology industry, and the plasticity of the work product, it happens quite often.

At this moment of truth, development teams choose from among the following responses:

• "These people are idiots. Let's go."
• "They're not idiots, but they're not our market. Let's keep setting meetings until we find people who can appreciate what we're trying to do."
• "Maybe if we talk more, they'll finally get it."
• "Maybe we didn't put enough into the first version. Let's go back and see what enhancements will make the product more appealing."
• "We've committed too much into this project to stop now. Forward! We'll work out the sales and marketing later."
• "Maybe we had a good idea, but we went about it the wrong way."
• "Maybe there isn't the market for this idea."

Adam Smith, meet Sigmund Freud and Niccolo Machiavelli
At moments like this, we can see why the simplistic economic model of the firm as a unified, rational actor makes zero sense. All of these responses might be the correct one. A rational,  unified actor should select among them impartially, based on their inherent risks and rewards. For example, if there really isn't a market for the idea, the consequences are dire. (If you were a game theorist, you'd work as hard as possible to prevent this kind of "nuclear option," even if the risks were low.)

Unfortunately, companies are not rational, nor are they unified. People have strong emotional attachments to their ideas, the people with whom they work, and the work itself. They also worry about the politics within their organization. For example, what happens to your reputation as a Wunderkind if your latest great idea turns out to be a flop? And what will the investors, or Management, think?

Market test early and often
This is exactly when the organization needs professional product management and product marketing, as long as you're serious about getting someone's honest assessment. Is the problem with the invention itself? If so, you need someone who can do an objective, credible appraisal of the problem, if it exists, with the product. Is the problem with your explanation of its value? If so, it's critical now to address that problem quickly and professionally, if you're going to build any market momentum, pre- and post-launch.

Inventors need product management and product marketing as early as possible. Unfortunately, in the history of the technology industry, that scenario doesn't happen as often as it should. Companies commit people and resources to an idea before it gets real market testing, or even a clear picture of who's going to use it, who's going to buy it, and why.

Innovation is more than just inspiration
Innovation--the art and science of converting inspiration into adoption--doesn't really start until someone performs these tasks. Therefore, the moment of truth depends on admitting the possibility that you don't know your target market as well as you should.

When the market feedback is disappointing, you need to establish some emotional distance from your idea. The invention still may have a bright future, but the consequences of being wrong might be disastrous. If you find yourself looking for reasons why you were right all along, without taking any time to question your ideas, or even the people with whom you're working, then you know you're setting yourself up for failure.

[P.S. If you're looking for other examples of this principle in practice, let's just say that the point is as valid in US foreign policy as it is in the technology industry.]

[Cross-posted at The Forrester product management blog.]

Learning from failure

In a business culture dominated by "success stories," we don't hear enough about the experiments that didn't work. Here's one of those refreshingly candid and very useful exceptions.

The Heretech podcast, episode 2

In this second episode, I interview Peter Burris, a principal analyst at Forrester Research. Peter leads a group of analysts (myself included) focused on product management and product marketing issues in the technology industry. Topics include community marketing, the real meaning of innovation (as opposed to invention), the effect of the economic crisis on the technology industry, and the mediocre genius of Lionel Richie.

Separating invention from innovation

It's not clear when it happened, but at some point in the history of the technology industry, people lost the distinction between invention and innovation. While insisting on the difference between the two words may seem like a minor semantic difference, it's as fundamental as distinguishing between speed and velocity as the same thing. In fact, mixing up invention and innovation is potentially as dangerous as confusing chemicals and medicines, if you prescribe one when you really need the other.

Tesla, Shmesla
Both Nikola Tesla and Thomas Edison were inventors. However, Edison was the better innovator. Fannish biographies of Tesla that complain about history's indifference to Tesla's genius are missing the point. Both Nikola Tesla and Thomas Edison were inventors. However, Edison was the better innovator. Fannish biographies of Tesla that complain about history's indifference to Tesla's genius are missing the point. Even if everything Tesla had invented exceeded Edison's in brilliance, Edison was much better at getting his inventions developed, sold, and distributed. (Throw in Tesla's unproven inventions, like the death ray and ion-powered aircraft, too, if you want.)

The story of Edison and Tesla should be iconic for today's technology industry, but it's not. Instead, many (perhaps most) technology companies act as though invention is all they need. When they face challenges--from competitors, the economy, or customer rejection--these vendors reflexively turn to invention as the solution. Increase features in the product, add new products, add new service offerings--these are inventions that, ipso facto, people will not necessarily adopt.

Ingres, Shmingres
Over the years, I've worked with a few veterans of Ingres who voiced a complaint that sounds a lot like the grudge Tesla fans hold against Edison. Ingres, they believed, was the better database, far superior in features and design than its chief competitor, the Oracle RDBMS. Y'know, they may be right--and that conclusion, however justified, would be irrelevant. Oracle's advantages, such as its famously aggressive salesforce, decided the issue.

You might conclude from the Oracle-Ingres battle that the technologists and salespeople just need to keep on executing for the company to be successful. For a variety of reasons, innovation is much trickier.

Inventions Are Not Projectiles
For example, Development can't just throw new technology over the wall to Marketing and Sales, and expect good things to happen. Someone always needs to mediate between Development and Sales. In the technology industry, that job function is spread across product managers, product marketers, sales engineers, and people in other roles. Activity in this middle layer needs to flow both ways, tuning the invention to better fit the market, as well as getting the invention sold and implemented.

Once you disentangle invention from innovation, many fallacies of the technology industry fall out. For example, being the first to market with an invention isn't necessarily the best strategy. To go back to the computer game industry for a moment, LucasArts often followed in the draft of other companies that invented new types of games (air combat simulators, graphical adventure games, etc.). Learning from their competitors' successes and mistakes, LucasArts was often happy to be the second to market.

So, the next time you hear someone praised as an innovator, ask yourself, Is this person really an inventor? And if so, who helped turn the invention into an innovation?

[Cross-posted at The Forrester product management blog.]