Frustrated and a bit confused, this led us to break down the costs and time it took to launch the last five products which delivered mediocre sales. One of which was a complete bomb. Needless to say, costs were in excess of $10M, but more shocking was the time impact. Because the organization pursued innovation initiatives in the form of linear go-to-market projects, the last 5 launches were stacked end to end. It takes roughly year to bring a new product to market, so that means five launches = five years of total time. 5 years passed with little to no revenue growth!

So let’s get this straight – the business is sweating spending six figures annually on a front end process that’s already delivered ROI in one year, but it’s more than willing to spend millions over years to achieve at best single digit growth!?

This is the perspective we’re using to convince general management to establish a front end budget distinct from project budgets. Separating the two will lead to a portfolio of concepts from which the business can pursue multiple projects concurrently while achieving higher success rates in market.

Next time you’re having trouble making the case to invest in front end innovation, talk numbers.

Much of the article resonated with us, particularly the primary reason for companies to pursue transformational innovation. Companies that strike “the right balance of core, adjacent, and transformational initiatives across the enterprise” demonstrate moderate growth over the long term.

What most business leaders don’t realize is that the tools and approaches best suited for transformational innovation differ greatly from those of incremental innovation which market research firms have standardized over the years. Incremental tactics pin the future of the enterprise entirely on “a collection of ad hoc, stand-alone efforts that compete with one another for time, money, attention, and prestige.” How many times have we all seen short term, disconnected product proliferation, “split the revenue pie into ever-smaller slices” while never growing the pie? I know we have. It’s typical of almost every CPG business we’ve collaborated with.

Leaders typically respond with a new strategy “aimed at breakthrough product development—at transformational rather than incremental innovations.” However, they all too often fail when they deploy the same tools, techniques and measures (and partners) used for incremental innovation for the purpose of transformational innovation. When transformational ideas are cast into the incremental system, they “end up being diluted beyond recognition, killed outright, or crushed under the weight of the enterprise.”

This waste of resources and time occurs when leaders neglect to recognize or gain “the very different capabilities needed to take a bolder path.”

Nagji and Tuff go on to make a case for managing innovation strategically and shifting from linear, project based stage gate approaches to more effective portfolio approaches… a view point that we advocate. While the tool they advocate to do this, the Innovation Ambition Matrix, isn’t anything new, the fundamentals are effective. Based on a construct created by H. Igor Ansoff to “help companies allocate funds among growth initiatives,” it has been tweaked over the years, most notably by Stratygen in the ’90′s, and deployed as an innovation management tool. The construct is effective but should vary in dynamics based on the type of business you’re in. House of Brand organizations present an even more complex challenge to this construct… one we’ve grappled with for years.

Historically, the most innovative companies “have struck the right balance of core, adjacent, and transformational initiatives across the enterprise.” Our firm, Upstream, has built niche expertise in transformational innovation techniques, tools and measurement that create entirely new businesses. Are you in need of products that have no direct antecedents? Have you ever created a market that had yet to exist? We have, and we’re passionate about helping others do the same.

Building on this guide, we set out to explore how these technology and social trends could be leveraged to afford new ways to reverse the epidemic of Childhood Obesity. We have identified 4 key Technology Trends that we believe show the greatest promise. But first,

WHY CHILDHOOD OBESITY?

We at UPSTREAM believe that the greatest human problems represent growth opportunities for brands that have the vision to embrace them. UPSTREAM has selected this issue because it serves as the causal basis for a host of societal ills, now and into the future. As innovators and design thinkers, we believe that good design is about solving the right problem, and that our innovation expertise creates the most impact when addressing causes instead of symptoms.

Childhood obesity has huge implications for reduced life span and reduced quality of life, robbing children of the basic qualities of childhood, and sentencing them to lifelong battles with largely preventable chronic diseases such as diabetes, heart disease, high blood pressure, and cancer.

Beyond these social costs, the economic costs in both healthcare spending and reduced competitiveness in the workforce have staggering implications for our nation’s ability to sustain itself and compete in the global economy. We believe this issue can’t wait as it ravages our youth and children around the globe.

SHORTER LIFE SPAN
“This generation of American children is the first in 200 years who have shorter life expectancies than their parents, and the major cause is obesity.”
-Kathleen Sebelius, US Secretary of Health and Human Services

DECREASED QUALITY OF LIFE
“In children, obesity rates are about four times higher than they were, say, 40 years ago. Part of the problem is we don’t see the full impact of obesity until many decades later… 20 and 30 years down the road are going to have horrendous problems that we’ve really not seen before.”
-Dr. Walter Willett, nutrition department chair, Harvard School of Public Health

SOARING ECONOMIC COSTS
“About $147 billion a year are spent directly related to obesity and the underlying health conditions related to that. That compares with all the cancers that people have across America, which cost a little under $100 billion a year.”
-Kathleen Sebelius, US Secretary of Health and Human Services

REDUCED COMPETITIVENESS
”Recent studies suggest half of Americans will be obese by 2030… It has an impact at every step along the way, on costs and on quality of life, on a productive workforce. We are really putting ourselves at a huge disadvantage in a global economy by having a nation that is vastly overweight.” -James R. Gavin III, M.D., Ph.D., chairman of the Partnership for a Healthy America’s board of directors
 

OPPORTUNITY IN THE CONVERGENCE OF TRENDS
UPSTREAM sees the convergence of four trends that represent enormous opportunity for impact in this space, and growth for those who act. While each of the four is powerful on its own, when leveraged in concert they have the potential to empower companies to capture opportunities by confronting childhood obesity in exciting new ways. With the alignment of overwhelming human needs, growing awareness, and emerging changes in public policy, we believe the intersection of this issue and these technology trends together represent a huge landscape of growth opportunity for those companies innovative enough to embrace it.

SENSOR INPUTS

Born from the proliferation of sensors that provide streams of input to track and understand our behaviors, movements and preferences, we are now crossing a threshold where the capabilities of ubiquitous computing are limited only by our imaginations.

These unprecedented capabilities to track information will be matched by the ability to coordinate and curate experiences. Just as self-analysis tools such as Fitbit and JawboneUP are allowing adult consumers manage their health, new apps and devices can provide engaging experiences to empower children to achieve fitness targets. The growing presence of Sensor Inputs will provide “data exhaust” from three sources that can be tracked and applied in useful ways:

People: Smartphones and a new breed of wearable products track biometric data

Places: Geo-aware smartphones provide patterns of data on the movements of crowds and individuals

Things: Connected home, smart cities and infrastructure self-report and share information

We have seen a myriad of health monitoring products introduced this year that measure a variety of health indicators including pulse rate, calorie burn rate, oxygen usage, movement, consumption and sleep patterns. Current examples of this trend are targeted at the general, adult consumer population.

As these take root and mature it is easy to imagine how these and new brands could emerge to engage and benefit children. In the future, sensor-fied products will evolve away from the obvious first application as wearable devices that monitor basic body metrics. Some are beginning to monitor aspects of sleep and LumoBack can even monitor posture.

Future Implications for SENSOR INPUTS and childhood obesity:

The living room could recognize a child and determine if they have been inactive for too long. The TV could send a text to a parent, or switch itself off and go into “exercise mode” for active play.

Home security systems could monitor and encourage outdoor play, with lighting and sound systems that engage kids outside, and celebrate active play.

Smart kitchens could provide kids with location-based nutrition guidance, presenting the fruit drawer and discouraging the cookie jar.

Parents can monitor children’s activity levels and help them set and achieve goals such as 60 minutes of outdoor active play a day

MOBILE HEALTH DATA

Demonstrating the cross category opportunity of this trend, companies as diverse as Qualcomm, AT&T, United Health Group, and Ford are all investing in the emerging area of mobile health, creating new partnerships and aggressively pursuing new categories such as bio-monitoring apparel, secure chat services with physicians, and in-car health monitoring.

In addition to leadership from these top corporations, new brands like Withings are emerging. Their Withings Health Cloud is a health and wellness cloud platform that integrates data from not only their own products but dozens of other fitness tracking apps and connected devices to provide innovative ways to help consumers track, share, and manage their health indicators.

The portability, management, and synthesis of this ecosystem of “Big Data” will be central to personal health management, providing useful information to enable parents, caregivers, and children themselves to make better lifestyle choices.

Made possible by data collection through SENSOR INPUTS, advanced personal metrics have become the next big thing. These individual data analytics can be leveraged to both raise awareness of obesity causing behaviors in children, and provide actionable feedback to encourage positive behaviors that improve children’s health.

Future implications for MOBILE HEALTH and childhood obesity:

Big-data will uncover new patterns that will extend our scientific knowledge – such as patterns based on blood-type or customized treatment plans to match personal genomes

Doctors can pre-empt disease with custom advice on preventive medicine and health promotion

Caregivers could get warnings when metrics are off track and attention is needed

Doctor access to “Time-lines” of metrics and specialist data will make diagnoses more holistic and accurate

NATURAL INTERFACES

Continued improvements towards natural and intuitive interfaces such as voice, gesture recognition, and eye-tracking control will make passive monitoring and active engagement ever easier – almost without thought. Control of technology and access to digital content will feel increasingly second nature. These new interfaces use movements and gestures to bridge the gaps between the physical and digital worlds.

As touchscreen, mobile sensing, and accelerometer innovations go mainstream, new opportunities emerge to engage broader segments of the populous, especially children. Gamification of health, enabled first by Wii Fit and now Microsoft Kinect, encourage healthy behaviors with natural interfaces and fun new ways to challenge and engage kids in active play.

Kinect’s voice and motion control capabilities are already being embraced by the hacker community for a stunning variety of new applications, from gait analysis for rehabilitating stroke victims to the beatmixer that lets you convert body movements into sound. The opportunities to create fun, active experiences seem limitless.

Future implications for NATURAL INTERFACES and childhood obesity:

The bathroom of the future could track and communicate key health indicators and provide dietary feedback – passively collecting “time-lines” of data for the eco-system

Augmented reality and new gaming interfaces will make exercise less repetitive and more adventurous with novel experiences made possible by physical and mental engagement

Devices could sense body language, mental attitudes and body metrics during any type of exercise and intelligently adjust a workout program accordingly, providing a tailored experience based on the unique needs of children

SOCIAL APPS

Enabled by mobile “geo-awareness” technology, Social Apps are allowing us to build local and virtual communities around common goals like never before. New communities of supporters comprised of friends, family, like-minded peers and care-givers will help motivate and gamify the experience of making healthier choices. Innovative web apps such as Health Month are leading community supported behavior change in this way. Applications like these show great promise for new ways to help kids live healthier lifestyles and overcome social isolation that can coincide with sedentary lifestyles and stigma.

These technologies enable brands to offer new location and community-based value exchanges with consumers and marketers will be challenged to explore new types of social-interpersonal currency to help people to feel more connected and “valued in-the-moment.” Consumers in turn will reward brands by broadcasting data about their success stories.

As Nike has proven with Nike+, the Human Race, and now the Fuel Band (with its own fitness currency), the community becomes the “product”, and the product, service and brand communications ecosystem all work in concert to support that community.

By providing parents and older children with new ways to connect with one another and build communities around healthy lifestyle behaviors, brands will be rewarded by the healthy communities they help build.

Future implications for SOCIAL APPS and childhood obesity:

Mobile devices may reach object recognition capabilities to identify foods and provide real-time nutritional content to support better eating habits

Parents and kids can be notified when a friends is out playing nearby, facilitating play dates

Virtual communities can passively check in to active play locations like parks and playgrounds, promoting spontaneous, “pick-up” exercise games and helping kids make new friends with similar health goals

CLICK HERE TO VIEW THE PDF

QUANTIFIED SELF & M-HEALTH
Personal biometrics and digital enabled behavior analysis will increasingly let consumers discreetly track and manage their lives more effectively.

GESTURAL INTERFACES & AUGMENTED REALITY
New natural interfaces based on movement will allow more intuitive control of tech, increasing access to information and digital content.

SoLOMo CONTENT + DATA EXCHANGE
Mobile “geo-awareness” technology, will create dramatic paradigm shifts to how we shop, socialize and how we are marketed to.

TELEVISION SOCIALIZED
Integration of Social Media and The Cult of Influence into the TV experience will transform it from a media consumption device to a content curating experience.

D.I.Y. AND DIGITAL OBJECTIFICATION
The “appification of everything”, open source tech and accessible manufacturing merge the tangible product and digital, online worlds.

CLICK HERE TO VIEW THE FULL PDF

Starting with your ideal business end point in mind and working backward can help you build an innovation approach that works for your business.

Your ideal business end point might be captured as market share, revenue, margin, customer acquisition, customer satisfaction or any number of other metrics important to your business. From here ask yourself, your colleagues, and your leadership team what would have to be true if those metrics were achieved. Once you’ve defined what would have to be true, ask what would have to happen for truth to be reality. Focusing on the actions your business can control, ask what you would have to know to take the appropriate actions.

This is intended to be a quick exploratory exercise. It will help you reveal many of the questions that will ultimately need to be answered in order to achieve desired business results through innovation. With these questions defined, it’s possible to prescribe the right methods and techniques to answer them. In the process you’ll create the deductive logic chain often necessary to evoke executive action and unlock budget.

STAYING TRUE TO PEOPLE’S GREATEST NEEDS
It’s where any value proposition is centered, mobile or not. The less relevant and meaningful the tool, the less it’s worth. Since mobile devices are so entrenched in our lives, it should be easy for any of us to rattle off a number of things we’d like to do with them yet can’t for one reason or another. Most of our ‘mobile’ needs and desires vary based on the context we are in, but some transcend the situation. For example:

“I want to simplify my life.” – Leads to aggregation utilities that consolidate content from multiple channels into one interface.

“Speak my language.” - Leads to translation utilities, but not in a literal sense. It’s about translating meaning. For example, if my 68 year old mom visits a computer manufacturer’s website to buy a computer she’s going to see speeds, feeds and a host of other numbers that are meaningless to her. Utilities will get to know their user and the content they are accessing to ultimately translate that content into meaning.

“I only want information relevant to me at this moment.” – Leads to utilities that filter and curate content based on the context of the device owner.

“I want to buy stuff.” – Leads to secure transaction utilities specific to the mobile environment.
“I want to capture stuff” – People want to collect and capture information beyond pictures. This leads to scrapbooking, storage and access utilities.

“What is the best choice?” – Leads to transaction of trust utilities that may leverage clout, ratings or other scores driven by friends and peers. We can all rest assured that Standard & Poor’s will not be responsible for ratings in this world 

Fulfilling some of the needs above not only requires emerging technology, but also a little social incentive. Technology plays the role of enabler while social incentive provides the motivation.

ENABLING PASSIVE INPUT & OUTPUT
This is all about making life easier in a world exploding with data. Technology platforms that enable passive data input and output are precious. They enable users to manually capture and enter much less information on their device, while still communicating effectively. It also means they no longer have to hunt and search for contextually relevant data. Passive input and output is an exciting game changer. It has the potential to make impact a kin to what the internet did to distribution models and service automation.

MOTIVATING ACTIVE INPUT & OUTPUT
Our most important data won’t be passively captured or distributed. We’ll need to motivate people to offer, relay or amplify data. In some cases we may even need to ask their permission to do so. Motivation will increasingly be driven by gamification, clout, reward and reciprocity.

The future of mobile utility can be found where the greatest needs intersect with enabling technology platforms and the appropriate motivation strategy. People are becoming the utility. Utility and marketing are beginning to merge into singular, systemic solutions.

The crux of the issues outlined by Walters center on the definition of design thinking, or lack thereof. When did design thinking get construed as an innovation process? I’m in complete agreement when she says, “Coating design processes atop internal bureaucracy doesn’t help anyone.” And why isn’t design thinking being discussed as a model of thought along the lines of abductive and deductive reasoning, or integrative reasoning as Roger Martin defines in The Opposable Mind? Or could it be that design thinking is just a term created by design industry leaders to reposition their businesses in response to client side organizations transitioning work to low cost centers like China and India?

My goal is not to belittle design or design thinking. It is one of the most critical competencies necessary for a business to succeed. I’m also a designer myself, and have great respect for the profession. I just don’t believe anything related to the actual practice of design has changed as a result of introducing the term ‘design thinking’. It hasn’t enabled untrained designers to practice design. It hasn’t resolved the articulation of value and business fit/function issues that existed prior. At best, it’s elevated the function of design within several organizations and made the practice visible where it previously wasn’t.

I do have a subtle yet important difference of opinion with Walters when she says, “A codified, repeatable, reusable practice contradicts the nature of innovation, which requires difficult, uncomfortable work to challenge the status quo of an industry or, at the very least, an organization.” I empathize with her perspective. On the surface you would think the same process would net the same result each time, not unlike an assembly line spitting out exact duplicates of the same product. When what you really want it to do is spit out radically different products each time. However, repeatable, reusable practices are actually a great way to compartmentalize and manage portions of an often chaotic, unpredictable process. I’m no fan of stage gates, rather I think of innovation process as a systemic approach. No two businesses are alike. They require their own approach, unique to their culture, constraints, and management goals.

Finally, no business can afford to place all their bets on trying to reinvent industries. What they can do is create distinct pathways and manage budgets for both incremental and disruptive innovation applied to creating new offerings, changing business models, changing the marketing chain, and so forth. Each pathway and application requires unique methods and set of decision metrics to be applied at various phases. In isolation, the ‘process’ certainly doesn’t ensure success, but it’s the best way to repeatedly manage a number of innovation bets across various stages of maturity.

Both vision and customer empathy tools align stakeholders to a shared purpose, but their business values couldn’t be more different. Vision aligns stakeholders to a future which has yet to exist, and plays a crucial role in disruptive innovation. In contrast, customer empathy tools align stakeholders to a common understanding of the present customer, and play an important role in incremental innovation. Empathy tools build consensus around the path people take to fulfill their needs and aspirations. The path often accounts for context, hurdles, emotions, influencers and a host of other factors that trigger certain behaviors and actions a person takes to realize an ideal outcome.

Organizations that neglect to align functional silos to a common understanding of their customer tend to flail in 3 ways:

1. The business over focuses on technology – For example, a service business may heavily invest in a back end system that makes life easy for the organization but fails to produce the front end necessary to deliver adequate value to the customer.
2. Functional silos over focus on their discreet metrics – For instance, engineering may be measured by time to market, procurement by delivery cost, and marketing by customer acquisition cost. These metrics fundamentally put all the pressure on the marketing and technical briefs to be innovative and most importantly ‘right’, leaving little incentive for functional collaboration necessary to incrementally innovate once the development process begins.
3. Functional silos procure their own ‘research’ – Groups build dogmas in isolation from one another, resulting in cross-functional friction and finger pointing at data as justification for incompatible actions. To avoid friction, functions toil away in isolation on discreet parts of a customer experience.

All of these scenarios add up to wasteful resource churn and mediocre business impact.

Who’s using customer empathy tools to align teams? It’s fairly common in the CPG world and technology businesses are starting to catch on. One of the latest tools deployed is a real-time customer data dashboard accessible to all employees. Dashboards primarily access social media, so they’re a bit limited in the depth, focus and ‘actionability’ of data they provide. P&G and others have adopted such systems. However the real challenge and the real value can be found in making actionable sense of this streaming data, and augmenting it with deep insights acquired through qualitative research practices. We’ve had success building empathy tools, often in the form of images, video and info-graphics, which make sense of data to communicate the relevant story of the customer in a language applicable to the business, and specific to each functional unit.

Whatever tool may be appropriate for your business, make sure you empathize with your customer. If you’re still not convinced, here are 6 good reasons to build customer empathy:

1. Foster cross-functional collaboration necessary for incremental innovation on roadmap
2. Focus teams and networks on the real challenges, needs and desires of customers
3. Coordinate execution across functional silos to realize ‘systems’ that deliver greater business impact
4. Integrate products, services and social to deliver holistic customer experiences and greater value
5. Discover new opportunities to innovate and connect across the customer journey
6. Translate data and ideas into action