1. Satisfy important unmet needs
2. Convince people that they are doing #1 (whether or not they actually are)
3. Exploit a human weakness
4. Exploit cracks in the system (creating them if necessary)

You might want to think about this a bit.  What types of companies epitomize each?

The focus of this blog and my company is succeeding on the basis of method #1, satisfying important unmet needs.  It’s the sustainable, no-BS way to go about it.

But we must acknowledge that companies can and do succeed — at least from a financial standpoint — without actually having to do so.  You can, in fact, make a good living selling snake oil.

How about you?  How does your company succeed?  What type of business do you, personally, like to be involved in?  Which of the four are you personally driven to, and which are you repulsed by?

A commenter asked, and I paraphrase, “The question is, will people care? Is existing voice quality ‘good enough’ that a jump in quality won’t matter that much?”

What is important about this question is that it gets to the product vision skill of being able to distinguish revolutionary technologies from those that only sound revolutionary.

One guy seemed to think HD audio was radical, “This is a bigger innovation than cameras on handsets or app stores for the industry.”

Is he right?  Here was my response on Steve’s blog:

Will customers care about HD audio? I like to think about these things in terms of needs. The HD audio people cited in the NYTimes thinks that this is more revolutionary than the camera in the mobile or the app store.

The guy is wrong. The cellphone camera and the app store are important because they enable the satisfaction of a host of new needs and scenarios. You can now email a picture of a sinking airplane from a boat on the Hudson river.  The innovation is valuable to customers because more real needs are being met.  Simple as that.

HD audio,while difficult to do and very welcome, is still an incremental innovation to customers, because it merely does a better job of addressing needs that were adequately covered for the last 70 years.

In the market, incremental refinements like HD Audio are not irrelevant, but they tend to be tie-breakers.  Given two otherwise equal offerings, a customer might as well choose the more refined one.

Eventually the competition responds, and the refinement becomes table stakes for all players.  But until the advantage is neutralized, the company with the more refined solution has bragging rights that can distract customers from more important unmet needs.

It may be fairly obvious that HD audio is a nice-to-have, because we are all intimate users of telephony.  However this way of thinking — connecting the technology back to scenarios and needs — applies to less familiar ideas.  It’s a useful way to break through reality distortion fields and make predictions about the true relevance of exciting looking technologies to customers.

Nokia reported a $1.36 billion loss in the third quarter as the company wrote down the value of its wireless networks venture by $1.35 billion and global sales declined 20 percent.

The company [..] acknowledged that its lead in smartphones, the fastest-growing segment of the market, had fallen to 35 percent from 41 percent, losing ground to Apple’s iPhone and Research in Motion’s BlackBerry devices.

Nokia’s problem is not execution.  It knows how to build things and bring them to market: it cranks out new models by the dozen.  Its problem is not innovation, at least not at the tactical level: every feature you’ve heard has made it into a shipping Nokia device.  Nokia’s problem is in product vision, of being able to imagine a coherent future reality with an ideal smartphone.

You might think that Nokia, with 25 years in the business, wouldn’t have allowed itself to be surpassed so easily.  But we should expect it.  It’s common pattern among big, old, successful companies.  Sony, Dell, GM, Motorola and countless others have fallen into the product vision trap, opening the door to disruptors.

Product vision becomes a bigger factor the more dials there are to turn in product formulation.

Sony traveled a similar arc in consumer electronics.  Sony was untouchable when their gadgets did only one or two things.  Like Nokia, it could master those core capabilities and move on to providing a variety of product variants for every segment, on marketing and on operations.  These were the business drivers as long as there was a steady state in the market.

But as technology enabled new classes of products, those old recipes no longer worked.  As the number of dials to turn in product formulation increase, the tried-and-true approach of cranking out incrementally better products breaks down.  Leadership gets overwhelmed by the plethora of choice.  In lieu of product vision to guide the way, they resort to guesswork, throwing everything against the wall to see what might stick.

Without a clear, coherent image of how things should be, design suffers.   Nokia’s products (and Sony’s, and Motorola’s, etc.) became complex, incoherent, and frustrating to use.  When products take on more capabilities, keeping things simple gets exponentially harder, because every feature relates to every other feature.  The possible associations grows with the square of the number of features.  (Even the best-of-class iPhone and Palm Pre are not immune.  Both could do their core tasks considerably easier.)

When products get more and more capable, the only way to cut through the jungle of choice, and the only way to keep the user experience coherent is with a clear product vision.

PS: Nokia has the market power but not the product vision.  Palm has the vision but not the market power.  I’m hungry for my Reese’s Peanut Butter Cup.  When will Nokia acquire Palm?

—

Philip Haine is principal of Product Vision Associates, a product innovation consultancy that helps product leaders and their teams envision new, breakthrough products and reboot older ones.  To follow him on Twitter click here.

Let’s focus on a great Yahoo! Our average user is just trying to get through the day…looking to find out what’s going on in the big world and their own world. They want their Internet site to be great, and to work. They don’t care about how or about deals. They care that we are a trusted dependable site.

That is our simple mission. Focus on it!!!

Let’s itemize that.  Yahoo’s simple mission is to:

1. Help users get through the day
2. Help users find out what’s going on in the world and their own world
3. Make an Internet site that is great, and works
4. Have a site that is trusted and dependable

That’s a rather hazy vision to try and focus on.  Only #2 provides a modicum of guidance.  And even that amounts to, “Let’s do more of what we’ve been doing for the past 10 years.”  If that was the right strategy I doubt Yahoo would be where they are now.

Someone could use a little help with their product vision.

After all, they permitted the competition to consistently be superior in quality, not for a few quarters or years, but for a few decades. Their best efforts at innovation were directed not towards better cars, but the problem of preserving the status quo.  And they willfully ignored the writing on the wall with respect to future oil crises and the latent demand for efficiency.

Did you know that, as a result of progressive legislation, GM had an early lead not just in electrical vehicles like the EV1, but in hybrids as well? As soon as lobbyists managed to squelch California’s strict emissions standards (with the aid of the White House at the time) GM yanked the plug on electrics.

The incredible postscript to this story is that it was America’s call-to-arms for efficient vehicles that panicked Honda and Toyota into action.  The Japanese manufacturers invested heavily in hybrids, leading to Toyota’s years-long lead in hybrid vehicles and the birth of the Prius.  While the American auto execs congratulated themselves for persuading government not to force it to invest in the inevitable future, Toyota went ahead and invented it.  Hybrids “make no economic sense,” said GM vice-chairman Bob Lutz.  Oops.

And so an epic failure of product vision it certainly was. But that is not the heart of the story, or its root cause. The root cause is a cancerous corporate culture.

It’s a corporate culture where dissenting opinion is marginalized and only the yes-men survive. (For a taste of this, check out the sycophantic employee comments at GM’s own blog.)

It’s a corporate culture that’s driven by PR rather than product.  It’s a culture with a cynical view of customers that says that you don’t have to actually deliver the best products to them.  You only have to convince customers that they are the best products. You don’t have to actually be a green company.  Job #1 is to convince everybody that you’re green.  The first act of a supposedly chastened GM?  Yet another PR campaign stating (yet again) how it’s turned the corner.  At GM, image follows product.

This culture neglects the fact that between what you say and the money you want to make, you actually have to provide significant value to customers.  Making a lot of money in a sustainable fashion requires consistently satisfying important unmet customer needs.

GM’s is a corporate culture that resolves the cognitive dissonance between the claimed and actual quality by truly believing that they are delivering quality. A company that believes its own BS sets sail from the reality-based community.  If it cannot be honest with itself, so loses its ability to self-correct and goes increasingly off-course.

GM’s is a corporate culture that is in denial about its own and failures and limitations, where everyone else is the scapegoat.  No failure is admitted, except perhaps the failure to get their message across to the public.

“G.M., for all these decades, has been a ‘know-it-all’ company that had all the answers [..] I think it’s been proven that they really didn’t know it all.” – David Lewis

GM’s culture is a systemic cancer that is not easily cured.

That’s why I was not very hopeful that a new GM, radically cut back, would be much different than the old, bloated GM. The only hope of turning around a corporate culture around like this is by decapitation.  The old leadership is simply too vested in their past decisions, too stewed in ancient assumptions and attitudes.  For fundamental change, the company’s values, reward system and world view must be turned upside down.  That is only possible with strong new leadership.

And that’s why it’s encouraging news that the shareholders of GM — i.e. us, the American public, as represented by our government — are replacing its leadership.  Not just the CEO, but the entire board of directors, which somehow — someone please tell me how — tolerated the destruction of billions of dollars of value before their eyes over decades.

It won’t be easy to turn GM’s culture around.  Old habits die hard, and remember, it’s the yes-men who survived at GM, not the innovative rebels.  But at least now, with new leadership, it stands chance.

For the rest of us, GM’s insidious corporate culture is worth pondering and comparing against the institutions over which we have influence.

Update 6/10/09 nytimes has more on the challenges of reinventing GM’s culture.

—

Philip Haine is principal of Product Vision Associates, a product innovation consultancy that helps product leaders and their teams envision new, breakthrough products and reboot older ones.  To follow him on Twitter click here.

Now I’d like to take it a step forward and show how to rate and visualize those needs.  This will help to formalize our needs analysis, laying down another stepping stone in our quest for a systematic way to approach product vision.

Grading how well each need is addressed

Whether a need is addressed is not a black and white thing.  A product might do well on some needs, poorly on others, and in-between on others.  We can grade each need numerically.  I prefer to use a limited scale of 0 to 3, which makes assigning a value easy and avoids splitting hairs:

• 0 – The product does not attempt to address the need.
• 1 – The product addresses the need at a basic level.
• 2 – The product does a decent job of addressing the need, but there is still room for improvement.
• 3 – The product fully satisfies the customer need, or the product is significantly ahead of the competition in doing so.

Needs Profile of the Prius

When discussing the Prius I spoke loosely of several customer needs: the needs for comfort, safety, fuel economy, and so on.  Let’s now enumerate and rate each one relative to other mid-size sedans and efficient vehicles that would serve as comparison points for a customer considering a Prius.

• Need for comfort – The Prius is surprisingly comfortable, but it’s not a luxury car.  So let’s give it a 2 for comfort and reserve the 3 for the more cushy rides.
• Need for performance – The Prius has plenty of power to climb hills and pass, but it’s not a performance automobile.  We’ll give it a 2 out of 3.
• Need for safety – It’s got a full compliment of safety features so we’ll give a 3.
• Need for long range – The Prius’s range is excellent for a sedan, so it gets a 3.
• Need for low fuel cost – Compared with regular sedans, the Prius has excellent fuel economy, so we’ll give it a 3.
• Need for eco-friendliness – It’s rated as a Super Ultra Low Emissions Vehicle (SULEV), so it gets 3 on need for eco-friendliness.
• Need for distinctive styling -The Prius stands out among sedans, but it’s not showy.  We’ll give it a 2. (And we’ll say more about aesthetics later.)
• Need for passenger capacity – The Prius comfortably sits five people.  We’ll give it a full 3 for passenger capacity.  (If we included minivans in the comparison set we’d have to give the Prius only a 2.)
  
• Need for cargo capacity – the Prius has a large trunk and fold down back seats.  Quite good for a sedan, so we’ll give it 3 for cargo capacity.
• Need for ease of learning and use – Part of the Prius’s appeal is that it operates like any regular car.   Unlike some alternative fuel vehicles, it requires no special training or change of habits.  We’ll give it 3 for learnability and usability.
• Need for refueling convenience – With an electric car, you better make sure you’re near an outlet at the end of the day.  The Prius, on the other hand, is gassed up like any other car at any gas station. We’ll give it a 3 for refueling convenience.
• Need for low initial costs – The sophisticated new engine on the Prius adds a couple of thousand dollars to the sticker price.  We’ll give it a 1 for low initial cost.
• Need for low maintenance cost – More sophisticated cars require special training on the part of car shops, and are therefore more expensive to repair.  We’ll assign the Prius a 1.

We can now visualize these values in a table:

This is the needs profile of the Toyota Prius. The set of dimensions along the top is called the needs space and it will serve as the basis for comparison between products.

Notice that needs are always expressed in the positive. Bigger and darker numbers are always better.  Standardizing on this scale makes it easy to read the table and make comparisons.

What’s going on here?

Thinking of a product in terms of its needs profile forces us to think at a higher conceptual level.  for the Prius, we see beyond the details of its hybrid engine technology, funky styling and other features to the relevance those features have to the customer at the end of the day.  The needs viewpoint is intrinsically customer-centric.  When thinking needs, we can’t help but think of our product from the viewpoint of the people whom we want to have buy it.

The needs profile is a much more manageable way of understanding a product.  Thousands of minute variables are synthesized down into a reasonable set of dimensions that we can wrap our head around.

Using needs for our dimensions is not arbitrary.  We don’t just make up the needs.  Needs ultimately come from customers in particular situations (see SSNiF Analysis). The features of the Prius or any other product can be traced to specific needs that fall out of specific situations that are experienced by a specific set of customers (or stakeholders).  Even a feature as minute as a wide cupholder is traceable to a situation (buying Big Gulp at the drive-thru) and a resulting need (to put it down somewhere stable while traveling in a moving vehicle).  Because needs are always traceable to SSNiFs they are less arbitrary and more reliability.

We now have a the beginnings of a new conceptual model for dealing with product vision.  I call this approach to looking at products (and soon, customers), Formal Needs Analysis.  Things get more interesting when we use the same basis of needs to compare products, so let’s do that next.

See also

• Choosing the Right Problem to Solve
• Other examples of needs analysis: Reusable shopping bags | Moviegoing
• SSNiF analysis (Modeling scenarios in terms of Stakeholders, Situations and Needs, and connecting them to Features)

—

Philip Haine is principal of Product Vision Associates, a product innovation consultancy that helps product leaders and their teams envision new, breakthrough products and reboot older ones.  To follow him on Twitter click here.

]]> http://productvision.org/blog/products-by-needs/feed/ 4 http://productvision.org/blog/choosing-the-right-problem-to-solve/ http://productvision.org/blog/choosing-the-right-problem-to-solve/#comments Thu, 13 Nov 2008 18:25:38 +0000 Philip Haine http://productvision.org/blog/?p=192 Product vision can seem impenetrable. How did the breakthrough products in the Product Vision Hall of Fame manage to achieve something so much more advanced than the competition?  It is mysterious when we look at products at a surface level.  But things start to make sense when we shift our focus from the how we solve problems, to the choice of which problems to solve.

Normally when we look at any product, we see the tangible and concrete: the features, design, and technologies.  This is natural.  But it’s important to recognize that these things exist for a purpose, which is to solve a problem for someone.  When we scratch past the surface, we see that it’s this selection of the problem, not how it’s solved, that determines so much of a product’s fate.

When we look at the breakthrough products, we see that they didn’t merely do a better job of addressing the same customer needs.  They chose a a different set of needs.  And when we look at the spectacular failures, we find that the problems that they chose to solve were not especially important to customers.  Envisioning great products is about choosing the right set of problems to solve.

Deconstructing the problem

We can always take a product and look beyond its surface to figure out what problems it is endeavoring to solve.  A corkscrew solves the problem of removing a cork from a bottle. A hammer and nails solves the problem of fastening large things together.

Toyota Prius

For a more sophisticated product, we can trace each individual feature to specific problems. Let’s take one of the Product Vision Hall of Fame, the Toyota Prius.

Looking at the distinguishing features of the Prius, we see a funky looking car that operates and performs like any other sedan, except that it has a a hybrid gas-electric engine.  Each of these key features exists to address some customer need:

• The hybrid engine saves fuel, which addresses the problem of high gas costs.  Phrased in terms of needs, we can say that it addresses the customer’s need for fuel economy.
• The hybrid engine helps to qualify the Prius as a Super-Ultra Low Emissions Vehicle.  This help address the problem of greenhouse gas emissions and global warming. It helps address the customer need to minimize the impact on the environment, or, for brevity, the need for eco-friendliness.
• The fact that the Prius drives like any other car solves the customer’s needs for comfort, safety, performance and range.  The driving experience is not compromised for the sake of economy, unlike earlier efficient vehicles.
• The Prius is operated like any other vehicle: gas it up, step on the pedal, and go.  It does not require the driver to learn any new skills or change any habits,  Electric cars have a limited range and require that the driver plan out where the next charge will come from.  The Prius solves the customer need for ease of learning and, shall we say, the need for refueling convenience.
• 

  2010 Honda Insight

  What need is served by the Prius’s unusual styling?  To achieve it’s high mileage rating, Toyota was impelled by the laws of aerodynamics to deviate from the current fashion in automobile styling.  The weird body shape helped address the need for fuel economy.  But it also advanced Toyota’s need to have a distinctive automobile that stood out and declared to the world a new era in cars had arrived.  Now, several years after the Prius’s North American introduction, the body shape is iconic and is even being copied by Honda with the 2010 Insight.

• The funky body styling turns out to address a second customer need as well. According to the New York Times:

..more than half of the Prius buyers surveyed [..] said the main reason they purchased their car was that “it makes a statement about me.  [..] “I really want people to know that I care about the environment,” said Joy Feasley of Philadelphia, owner of a green 2006 Prius. “I like that people stop and ask me how I like my car.”

So it turns out that many customers had a couple of ulterior motives for buying a Prius: to make a personal statement, and to influence others into thinking about the environment and making progressive choices, too. The unusual body styling helped address these needs.

Making Trade-offs

Nothing comes for free in product design.  There are always trade-offs to be made.  And so it goes with product vision.  In the case of the Prius, the more complex engine and batteries come with a higher initial price, and possibly greater maintenance costs.

This set of trade-offs, with some needs addressed well and others addressed less well or not at all is what I call the product’s needs profile.  It is the blueprint of the product’s vision.

The Prius has a fundamentally different product vision, because its needs profile is unique.  None of the predecessors make the same set of trade-offs. Regular sedans are comfortable and safe, but do not address the need for fuel economy as well. Small cars address the need for fuel-efficiency but not the needs for space and comfort. Early electric vehicles like the Ford EV1 were extremely efficient, but sacrificed internal passenger and cargo capacity, performance, range and refueling convenience.  Each comparison point makes a different balance of trade-offs and has a different  needs profile.

This will be a central theme in our study of product vision.  Sculpting the needs profile of future products will be a key tool in our arsenal for defining breakthrough products.

Try this at home

You can try this exercise of deconstructing products by needs yourself.  Pick up any simple product around you like a mechanical pencil or your coffee mug.  First ask yourself, what features or design elements or technologies make it unique among its peers?  Then ask, what problem does each feature solve that the others do not?  Then try and express the problem in terms of a customer need as I did for the Prius.

When you start to get good at this, you will develop an x-ray vision that lets you see past a product’s superficial skin to its essence and the reason that it exists. This is a core perspective for doing product vision work.

To summarize, envisioning great products is not about solving problems better, but choosing the right problems to solve.  Choose the wrong problems and your product will be doomed before the project begins.  Choose the right set of problems and you have the blueprint for a breakthrough product

See also:

• Picking a frame: Activities vs. Goals vs. Needs needs
• The First Rule of Product Vision
• Introduction to SSNiF Analysis

—

Philip Haine is principal of Product Vision Associates, a product innovation consultancy that helps product leaders and their teams envision new, breakthrough products and reboot older ones.  To follow him on Twitter click here.