Times are rapidly changing and with it, the way corporations go about business. In these times where the finest are fighting for a bite into the ever-growing consumer market, what differentiates the leaders from the also-rans is the value add – that little something extra! That something new, something different that makes you stand out. Pricing wars were the old ways of corporate battles, nowadays, they are about those extra zings that can be offered, with a good price point creating a bigger consumer pool.
This is where being innovative kicks in. Billions of dollars are pumped into R&D, infusing new ideas and nurturing creativity, because innovating is the only way forward. A simple Google search of the “top 500 firms in 2000 and 2020” will reveal that less than 15 percent of these firms are a constant on the list. The others chose to stick with business as usual, or realized the importance of adapting to the rapidly evolving world too late.
Being innovative and constantly adapting makes you stand apart from your competitors, but is innovation alone enough? Innovation is more about execution than it is about creation. Look at Apple for instance. They not only come out with one innovative product after the other, but also have a peculiar way of pushing those products into the market: avoiding price wars and emphasizing their unique value proposition.
Let’s dive deeper into why innovation alone is not enough by taking a look at the wearables industry. When it comes to fitness trackers, brands like Apple, Fitbit and Mi are household names. However, most of us have never heard of Nike+ FuelBand – the prodigal son that kick-started the multibillion-dollar wearables industry. Why not?
Apple Watch reportedly generated USD 6 billion in sales the year it was introduced, 2015, which is USD 1.5 billion more than what Rolex generated in a year. Fitness bands changed the way we measure our fitness goals. They provide the means to quantify and track your performance and are considered a great innovation in the field of technology and fitness, especially with the addition of features like a heart rate monitor, calorie counter and ECG capability on its way. Incremental features were introduced which incorporated psychological techniques associated with behavior change like social support, rewards, badges, sharing your progress, etc.
Wearables were the innovation the health and fitness industry needed, but little is known about the product that started it all – Nike+ FuelBand. It launched in 2012 when the wearables market was just about USD 330 million with not much competition. It was a great product with innovative features for its time, such as Nike Fuels, pedometer, movement tracker, incentive-based targets, built-in micro USB charging port and so on. FuelBand even had the first-mover advantage, but even with everything going for it, it still failed to leave a mark. Just two years later, the product was scrapped. Nike fired most of the hardware team in charge of the gadget (who later went on to join the Apple Watch team) without any clear explanation.
At the time, Tim Cook – Apple’s current CEO – was a board member at Nike and a big fan of the gadget. Soon after FuelBand was scrapped, Apple introduced its first-ever Watch. Interestingly, during the design of iWatch, Apple design chief Ive and other design team members requested boxes of high-end sport watches from Nike to draw inspiration and understand the materials and processes. Unlike Nike+ FuelBand, the first Apple Watch turned out to be a great success.
Innovation Is About Continuous Improvement
Apple grabbed the opportunities Nike couldn’t envision. So, what went wrong with FuelBand? In a nutshell, gross negligence when it came to customer feedback and failure to adapt. Below are some of the major flaws that Nike could have corrected/eliminated through continuous improvement tools.
Problem 1: Lack of clarity and vision. It had an iOS-only compatible app, losing out on more than 700 million potential android users. They never clarified whether they would extend to other platforms. The executive team also lacked a clear vision for the product. Some say they just wanted the consumer base and later integrate with other fitness devices, which could be right considering that they later partnered with Apple Watch.
Solution: Catchball is the best technique to solve the lack of clarity and vision in a product/project. The idea of catchball is quite simple. Someone starts a rapid improvement or planning project. They define the purpose, goals, background and challenges, and then “throw” them to other stakeholders for opinions, help and action. At every point, it is clear who has ownership of the idea (ball). The ball can bounce around back and forth among all the players until the improvement or plan is complete.
What’s the point of all this “extra” effort? You hire smart, capable employees for a reason — and it’s not just to pull levers or move patients. These people all can contribute ideas and experience in pursuit of achieving your strategic organizational goals. One of the most effective ways to develop a culture where everyone is working toward the same goals is to connect each layer of the organization with the corporate strategy. When this alignment is achieved, everyone can work together to deliver value to customers. Catchball is a simple yet powerful tool for rolling out the strategy in such a way that it touches every individual in a meaningful way.
Problem 2: Lack of clear and concise communication. A user could simply wave his hand and accumulate Fuels. Moreover, most of the users did not understand how Fuels were calculated in the first place. Nike never addressed this.
Solution: Every project / product must have a 5 W’s and 1 H communication checklist. These are the questions that the communication and/or project team should go through once they have a product. Let us analyze these questions:
- What am I required to communicate?
- What is in it for me and the audience?
- What should be the source of my data?
- What should the message be?
- What action is the audience required to take as a result of the communication?
- Why am I required to communicate? (understanding the trigger)
- Why communicate now?
- Why this audience?
- Why is this communication important?
- When should the message be delivered?
- When is the communication required?
- When is the action or result required?
- Where is the communication coming from?
- Where can I get more information?
- Where is this communication going to lead?
- Who is my audience?
- Who will be affected as a result of my communication?
- Who will take the required action?
- How am I going to communicate? (aids available and type of audience)
- How am I going to convince?
- How am I going to handle difficult audience or questions?
- How should action be taken?
Problem 3: Failure to improve. Even with the third version of the product, there were no significant new features compared to first-gen products. The changes were more aesthetic in nature.
Solution: Follow the A3 methodology to create product vision and a roadmap. The A3 process is a problem-solving tool Toyota developed to foster learning and collaboration. In most organizations, on most teams, we aren’t collaborating as strategically as we could be. We leave meetings with ideas half-baked. We often move hastily to begin working on implementing a solution, without aligning around important details. Projects move slowly due to rework and duplicate effort, two symptoms of a lack of alignment.
The A3 process allows groups of people to actively collaborate on the purpose, goals and strategy of a project. It encourages in-depth problem solving throughout the process and adjusting as needed to ensure that the project most accurately meets its intended goal. Steps involved in A3 are capturing current state of situation → conducting a root cause analysis → devise countermeasure to address root causes → define your target state → develop a plan for implementation → develop a follow-up plan with predicted outcomes → get everyone on board → implement → evaluate results.
Apple steadily kept an eye on these opportunities and fixed most of them, with the addition of the heart-sensor functionality as the icing on the cake. They hired some top leaders from Nike’s FuelBand project to work on their first wearable device. Furthermore, they built on customer feedbacks and introduced additional features. This is why wearables contribute more toward Apple’s overall revenue than their iPhones. Nike’s failures were Apple’s learnings.
Nike+ FuelBand was no doubt an innovative product. It had all the ingredients for being a game changer, but instead ended up becoming no more than the precursor to a larger revolution. This demonstrates that a unique product or service alone does not guarantee success; it’s merely a ticket to the actual show. Innovation encompasses a much broader horizon. It’s an amalgamation of many things – starting from an inspiration of the idea, to its execution, to understanding the customers’ needs and finally continuous improvement based on feedback of those in need of that. Tim Cook put all this perfectly into the now immortal words: “a seamless integration of hardware, software and services.”