Tag Archives: iPhone

Has Apple made NFC irrelevant?

In The future of exchanging value{{1}} I, along with Peter Williams and Ian Harper at Deloitte, pointed out that a successful retail payments strategy should be founded on empowering consumers and merchants to transact when and where they want to. Investing in technologies such as near-field communication (NFC) networks might allow you to shave a couple of seconds off the transaction time once customer was at the till, but it ignores the fact that consumers are increasingly transacting away from the till as mobile phones and ubiquitous connectivity allow them to transact when and where they want to.

[[1]]Peter Evans-Greenwood, Ian Harper, Peter Williams (2012), The future of exchanging value, Deloitte[[1]]

We are seeing a shift from technology acquisition to technology use. Rather than building a payment strategy around the acquisition of a new technology (such as NFC), a successful strategy needs to be based on streamlining the buying journey. While NFC might enable the consumer to save a few seconds at the till, it does not address the far larger time they spent waiting in the queue beforehand. A more valuable solution might avoid the need to queue entirely. This is a design-led approach, focused on the overall problem the customer is solving and the context in which they are solving. Technologies are pulled into the payment strategy as needed, rather than building the strategy around the acquisition of an asset or capability.

Amazon used this approach with the development of the company’s mobile application, one that allows you snap an image of a barcode to purchase a product. Bricks-and-morter retailers see this as showrooming and unsportsmanlike. Many consumers, however, love the idea.

As I pointed out in The destruction of traditional retail{{2}}:

[[2]]The destruction of traditional retail @ PEG[[2]]

If you’re standing in an aisle casually browsing products then Amazon’s till is closer to you than the one at the front of the store[4]. You also don’t need to worry about carrying your purchase home.

The challenge for retailers (from The future of exchanging value) is to:

… manage a portfolio of technologies, from existing payment infrastructure through NFC to emerging tools, combining them to enable customers to transact when and how they need to.

The way for bricks-and-morter retailers to fight showrooming is use a range of low-cost consumer technologies to make it more convenient to transact with them than an internet retailer.

Apple showed how this might be done during the What’s New in Core Location presentation at the company’s recent Worldwide Developers Conference.

Imagine you walk into Jay’s Donut Shop. iBeacons from Core Location are accurate enough for the retailer to be sure that you have walked in, while other location technologies (such as GPS or those based on Wi-Fi) could, at best, provide a list of guesses. You don’t even need to check in. You could order you donuts before you entered the shop. When you reach the counter your iPhone would display a QR code that a clerk uses to verify the purchase. You grab your donuts and leave, the transaction charged to your iTunes account and your receipt already on your phone.

As Mike Elgan points out in his post Why Apple’s ‘indoor GPS’ plan is brilliant{{3}}, it’s not much of stretch to consider some much more interesting scenarios.

[[3]]Mike Elgan (14th September 2013), Why Apple’s ‘indoor GPS’ plan is brilliant, Computer World.[[3]]

A customer could scan the labels on clothing, process the transaction on the phone, then stroll out of the store with purchases in hand (the alarm would be de-activated for those items).

This is a solution that could be supported tomorrow on all iPhone 4Ss through to the new iPhone 5C. The hardware required to create an iBeacon is already available and it’s cheap, often in the 10s of US$.

NFC continues to struggle and it seems that Apple might have pulled together a solution that makes it irrelevent.

The destruction of traditional retail

Le Bon Marché à Paris (1875)

A steady stream of news stories is trying to convince us that online is killing retail, that online has an unfair advantage and show rooming is evil. There’s some handwaving around omni-channel and claims that that if you sharpen your approach a bit then you will be able to stand out from the online crowd and stay alive, but it’s all a distraction. The problem is that ‘retail’ is just not something we need as much as we used to.

It’s not that we no longer need retail stores. We don’t, however, need as many of them as we have today.

Retail stores serve many purposes, but the most common is to be the last stage in someone else’s supply chain. This role – the retail store that is little more than a convenient place to make a purchase – is dying.

The internet and smartphones mean that we can now shop and purchase when and were we want. We’re no longer forced to pick between the meagre offerings at a nearby store.

Browsing is something we do in a spare moment, sitting in front of the TV with our tablet or via smart phone during our commute on the train. We purchase when we realise that we’ve found something we want or need, where ever we are at the time.

The other uses for local shops and businesses will remain:– community gathering places, restaurants etc. Life for your typical retail store is looking grim though, as they are simply something that we no longer need as much of as we used to.

Continue reading The destruction of traditional retail

Observe, Orient, Decide, Act

OODA: Observe, Orient, Decide, Act
OODA: Observe, Orient, Decide, Act

It seems that I’ve shared this with four or five different groups of people over the last couple of weeks, so I thought it worthwhile putting it on the blog. Plus this is one of those instances where the Wikipedia page is not the best launching point.

Anyway, OODA (Observe, Orient, Decide, Act){{1}}, shown above, is a learning framework created by John Boyd{{2}}.

[[1]]John Boyd, The OODA LOOP, The Essence of Winning and Losing, slide 4 @ danford.net[[1]]

[[2]]A John Boyd Biography @ danford.net[[2]]

Colonel Boyd was an interesting bloke who had a huge influence on military tactics. One of his key insights was that success in a rapidly changing environment depends on your ability to adapt to the environment as it changes about you. The successful army is the one that can adapt as the world changes around it, and not necessarily the army with more resources at its disposal. This is interesting as the evidence is in and it shows that – for the vast majority of businesses – your competitors have very little influence on your success or failure; the largest factor is your ability to adapt and stay relevant as the market changes around you. Think Nokia, RIM and the iPhone. Or think in terms of high speed rail and point-to-point buses vs. discount air travel in Europe. The complication here is that today’s environment is changing so rapidly that your art – your product – might only have a shelf life of six months or so.

Continue reading Observe, Orient, Decide, Act

Taking innovation to the edge

Deloitte were kind enough to invite me to present last week at the Melbourne leg of their regular CIO forum. The topic was innovation in IT.

The Innovative CIO: taking the core to the edge

Innovation strikes both dread and elation into the heart of the CIO. How does the CIO embrace and deploy rapid technology changes without falling into the trap of project plans and corporate regulation?

Continue reading Taking innovation to the edge

What recession?

The global financial crisis hit nearly four years ago in 2008 but America and Europe appear to still be stuck in the mud. Even the Asian market has softened. But is this a recession? Or are we seeing a reconfiguration of the economy as the technological seeds laid over the last few generations finally germinated and bear fruit? Prices for made goods are collapsing as the cost of manufacturing has plummeted, while the cost of sourcing and distribution has crashed, caught between globalisation and the Internet. Even innovation, the source of all those sexy new products, has been democratised with the investment required to development new products taking a nosedive. Our existing business models were not designed to thrive, or even survive, this this environment. While the current market is a challenge to navigate, a lot of the problems we're seeing could be result of a collapse of antiquated business models rather than the collapse in demand that these businesses are intended to service.

Continue reading What recession?

What is innovation?

What is innovation? I don’t know, but then I’m not even sure that it’s an interesting question. The yearning so many companies have to be innovative often seems to prevent them from actually doing anything innovative. They get so caught up in trying to come up with the next innovation — the next big product — that they often fail to do anything innovative at all. It’s more productive to define innovation by understanding what it’s not: doing the same thing as the rest of the crowd, while accepting that there are no silver bullets and that you don’t control all the variables.

So, what is innovation? This seems to be a common question thats comes up whenever a company wants to innovate. After all, the first step in solving a problem is usually to define our terms.

Innovation is a bit like quantum theory’s spooky action at a distance,1)Spooky action at a distance? @ Fact and Fiction where stuff we know and understand behaves in a way we don’t expect. It can be easy to spot an innovative outcome (hindsight is a wonderful thing), but it’s hard to predict what will be innovative in the future. Just spend some time browsing Paleo-Future2)Paleo-Future (one of my favourite blogs) to see just how far off the mark we’ve been in the past.

The problem is that as it’s all relative; what’s innovative in one context may (or may not) be innovative in another. You need an environment that brings together a confluence of factors — ideas, skills, the right business and market drivers, the time and space to try something new — before there’s a chance that something innovative might happen.

Unfortunately innovation has been claimed as the engine behind the success of more than a few leading companies, so we all wanted to know what it is (and how to get some). Many books have been written promising to tell you exactly what to do to create innovation, providing you with a twelve step program3)Twelve step programs @ Wikipedia to a happier and more innovative future. If you just do this, then you too can invent the next iPhone.4)iPhone — the Apple innovation everyone expected @ Fast Company

Initially we were told that we just needed to find the big idea, a concept which will form the basis of our industry shattering innovation. We hired consultants to run ideation5)Ideation defined at Wikipedia workshops for us, or even outsourced ideation to an innovation consultancy asking them to hunt down the big idea for us. A whole industry has sprung up around the quest for the big idea, with TED6)TED (which I have mixed feelings about) being the most obvious example.

As I’ve said before, the quest for the new-new thing is pointless.7)Innovation should not be the quest for the new-new thing @ PEG

The challenge when managing innovation is not in capturing ideas before they develop into market shaping innovations. If we see an innovative idea outside our organization, then we must assume that we’re not the first to see it, and ideas are easily copied. If innovation is a transferable good, then we’d all have the latest version.

Ideas are a dime a dozen, so real challenge is to execute on an idea (i.e. pick one and do something meaningful with it). If you get involved in that ideas arms race, then you will come last as someone will always have the idea before you. As Scott McNealy at Sun likes to say:

Statistically, most of the smart people work for somebody else.

More recently our focus has shifted from ideas to method. Realising that a good idea is not enough, we’ve tried to find a repeatable method with which we can manufacture innovation. This is what business does after all; formalise and systematise a skill, and then deploy it at huge scale to generate a profit. Think Henry Ford and the creation of that first production line.

Design Thinking8)Design Thinking … what is that? @ Fast Company is the most popular candidate for method of innovation, due largely to the role of Jonathan Ive9)Jonathan Ive @ Design Museum and design in Apple’s rise from also-ran to market leader. There’s a lot of good stuff in Design Thinking — concepts and practices anyone with an engineering background10)Sorry, software engineering doesn’t count. would recognise. Understand the context that your product or solution must work in. Build up the ideas used in your solution in an incremental and iterative fashion, testing and prototyping as you go. Teamwork and collaboration. And so on…

The fairly obvious problem with this is that Design Thinking does not guarantee an innovative outcome. For every Apple with their iPhone there’s an Apple with a Newton.11)The story behind the Apple Newton @ Gizmodo Or Microsoft with a Kin.12)Microsoft Said to Blame Low Sales, High Price for Kin’s Failure @ Business Week Or a host of other carefully designed and crafted products which failed to have any impact in the market. I’ll let the blog-sphere debate the precise reason for each failure, but we can’t escape the fact the best people with a perfect method cannot guarantee us success.

People make bad decisions. You might have followed the method correctly, but perhaps you didn’t quite identify the right target audience. Or the technology might not quite be where you need it to be. Or something a competitor did might render all your blood sweet and tears irrelevant.

Design Thinking (and innovation) is not chess: a game where all variables are known and we have complete information, allowing us to make perfect decisions. We can’t expect a method like Design Thinking to provide an innovative outcome.

Why then do we try and define innovation in terms of the big idea or perfect methodology? I put this down to the quest for a silver bullet: most people hope that there’s a magic cure for their problems which requires little effort to implement, and they dislike the notion that hard work is key.

This is true in many of life’s facets. We prefer diet pills and magic foods over exercise and eating less. If I pay for this, then it will all come good. If we just can just find that innovative idea in our next facilitated ideation workshop. Or hire more designers and implement Design Thinking across our organisation.

Success with innovation, as with so many things, is more a question of hard work than anything else. We forget that the person behind P&G’s Design Thinking efforts,13)P&G changes it’s game @ Business Week Cindy Tripp, came out of marketing and finance, not design. She chose Design Thinking as the right tool for the problems she needed to solve — Design Thinking didn’t choose her. And she worked hard, pulling in ideas from left, right and centre, to find, test and implement the tools she needed.

So innovation is not the big idea. Nor is it a process like Design Thinking.

For me, innovation is simply:

  • working toward a meaningful goal, and
  • being empower to use whichever tools will be most beneficial.

If I was to try and define innovation more formally, then I would say that innovation is a combination of two key concepts: obliquity14)Obliquity defined at SearchCRM and Jeet Kune Do’s15)Jeet Kune Do, a martial art discipline developed by Bruce Lee @ Wikipedia concept of absorbing what is useful.

Obliquity is the simple idea that the best way to achieve a goal in a complex environment is to take an indirect approach. The fastest and most productive path to the top of the mountain might be to take the path that winds its way around the mountain, rather than to try and walk directly up the steepest face.

Apple is a good example of obliquity in action. Both Steve Jobs and Jonathan Ives are on record as wanting to make “great products that we want to own ourselves,” rather than plotting to build the biggest and most innovative company on the planet. Rather than try and game the financial metrics, they are focusing on making great products.

Bruce Lee16)Bruce Lee: the devine wind came up with the idea of “absorbing what is useful”17)Absorbing what is useful @ Wikipedia when he created Jeet Kune Do. He promoted the idea that students should learn a range of methods and doctrines, experiment to learn what works (and what doesn’t work) for them, “absorb what is useful” while discarding the remainder. The critical point of this principle is that the choice of what to keep is based on personal experimentation. It is not based on how a technique may look or feel, or how precisely the artist can mimic tradition. In the final analysis, if the technique is not beneficial, it is discarded. Lee believed that only the individual could come to understand what worked; based on critical self analysis, and by, “honestly expressing oneself, without lying to oneself.”

Cindy Tripp at P&G is a good example of someone absorbing what is useful. Her career has her investigating different topics and domains, more a sun shaped individual than a t-shaped one.18)T-Shaped + Sun-Shaped People @ Logic + Emotion Starting from a core passion, she accreted a collection of disciplines, tools and techniques which are beneficial. Design Thinking is one of these techniques (which she uses as a reframing tool).

I suppose you could say that I’ve defined innovation by identifying what it’s not: innovation is the courage to find a different way up the hill, while accepting that there are no silver bullets and that you don’t control all the variables.

Updated: Tweeked the wording in the (lucky) 13th paragraph in line with Bill Buxton’s comment.

For every Apple with their iPhone there’s an Apple with a Newton. Or Microsoft with a Kin.

References   [ + ]

Innovation linkage

I gave a talk on innovation at Chisholm tonight in their Business Innovation Seminar Series, and promised to provide links to some of my references. Here they are:

Leave a comment if I’ve missed anything and I’ll try and find a reference.

A nice visual argument for the value of mash-ups

As I’ve mentioned before, I would like a nice, clear, crisp definition for mash-up. A definition which captures the benefits that mash-ups can bring, rather than detailing a collection of tools, technologies and standards that we happen to find interesting at the time. For me, this is the TQM argument of fusing data and process to eliminate unnecessary decisions—make-work or swivel chair integration—to create a more efficient and effective work environment.

It’s Just a Bunch of Stuff That Happens has done a brilliant job of capturing this visually (included below). I like the usability aspect this highlights. A mash-up’s focus is cross-application usability—removing the annoyances of dealing with separate information sources. We could simply take these sources and squish them up against the glass, delivering the content into iGoogle or NetVibes gadgets. But what those original push-pins on a map mash-ups did was improve the usability of these information sources by eliminating the decisions required to navigate across them. Just as Apple did with the iPod and iPhone, eliminating or fusing functions to eliminate the (unnecessary) decisions required to navigate the overly complex and confusing interfaces of the mobile phones that came before them.

iGoogle and NetVibes are the Symbian to a mash-up’s iPhone.

Symplicity

Posted via web from PEG @ Posterous