Yesterday I took the main stage at our 2011 Consumer Forum here in Chicago to introduce the 500+ members of the audience to digital disruptors. You can read about the guts of my presentation in my blog post and learn more about the effect of digital disruptors in "Beware the Digital Disruptors," my Mashable piece from earlier this week.
But what I really want you to do is participate in our Digital Disruption Readiness Assessment. It's found at forr.com/digitalreadiness and takes just five minutes to complete. We launched it yesterday as part of my speech, and many thanks to the hundreds of you who have already hit the survey (even those of you who just checked out the first page and didn't proceed; I want you back). The results are already fascinating and will only get better as we get more of you to participate, so please pass this along to your friends and let's collect enough data that I can share more nuggets as they come through. Here's a teaser:
You're very optimistic: 43% think it's very likely that "My company will be a top provider of its goods and services in five years." Yet only 21% of you think it's very likely that "My company will be more innovative than other firms in our industry or category over the next five years." Red flag: How will your company lead in products if it doesn't lead in innovation?
In our assessment, we ask you to evaluate your industry, your company, and your individual readiness for (or vulnerability to) digital disruption. And here's the real kicker: When we get to the level of the individual, the answers are sure to trigger empathy.
All through the past decade, observers in industry and on Wall Street have offered reasons to discount Netflix’s efforts. Supposed obstacles ranged from Blockbuster to scant streaming options to recent rate hikes on DVD renters. When will these people ever learn? We understand why people cheer against disruptive players like Netflix — it would be nice if we could pretend all these digital disruptions will go away. But they won’t, and neither will Netflix. We’ve written about this in our latest report that people who keep an eye on content strategy will find valuable (see our newest report on Netflix).
But it’s not really written for them – it’s written for people who take an even bigger view, as do we. These people – today’s product strategists – know that Netflix is a powerful example of disruptive digital product strategy and are eager to learn how to act like Netflix in their own context and industry. In our report, we extract three specific lessons from Netflix:
Control the product experience. The company that controls the user’s total product experience will win, whether retailer, producer, distributor, or platform. That company will have ultimate control over what options people have, what prices they pay, and what value they believe they are getting. It’s a big responsibility, but it’s one that people charged with product strategy must be willing to accept. Makers of products as wide-ranging as sleeping pills, running shoes, and auto insurance should all follow Netflix’s lead and control the total product experience they deliver.
We live in a world punctuated by big innovations. From fire and the wheel down to the light bulb and the iPad, we mark the march of history by the steady beat of transformative innovations. Except that steady beat is no longer so steady. The rate at which these life-altering innovations are coming to market is accelerating so quickly that it's no longer sufficient to invoke even Moore's Law to explain them.
Not only are new things being introduced more swiftly than before but consumers are adopting them more rapidly than before. I make my living studying early adopters, but recently I've had to throw many hard-earned lessons out the window. Because in a world where Microsoft sold 8 million Kinect cameras for the Xbox 360 in just two months, traditional definitions of "early adopter" became irrelevant after about week two.
This is both exciting and maddening. We've spent that last several years watching the acceleration of innovation to figure out what is making this rate of innovation possible and we've discovered that innovating at this pace is tricky, but doable, with the right approach.
Every year, people talk about the future of IT, which is shorthand for, "Some big changes may be in the works." In the last year, we've had to revise that sentence to read, "Some big changes are definitely in the works." Agile practices will be a critical tool for making this transition successfully, but not because of velocity. At least, that won't be the primary virtue of Agile that helps with the transition.
One of the Founding Fathers of Agile, Jim Highsmith, recently commented on his blog about an MIT study that surveyed one face of this mountain of change:
The implications of these changes in emphasis could be significant in terms of mindset and capabilities in and out of IT departments. From a focus on standardization, optimization, and cost control, the focus shifts to innovative uses of emerging technologies such as social media, cloud computing, and mobile devices; speed to market; flexibility to follow changing opportunities, and building new products and services.
This article on consumerinnovation that appeared in The New York Times over the weekend was fascinating. It points to a new study conducted in the UK on the role customers play in innovation in consumer markets. A key finding was that:
“6.2% of UK consumers — 2.9 million individuals — have engaged in consumer product innovation during the prior 3 years. In aggregate, consumers’ annual product development expenditures are 2.3 times larger than the annual consumer product R&D expenditures of all firms in the UK combined.”
Study author Eric A. Von Hippell, of the MIT Sloan School of Management, said, “We’ve been missing the dark matter of innovation. This is a new pattern for how innovations come about.”
Well, maybe not so new. The NYT journalist, Patricia Cohen, goes on to point out that “The very study of collaborative user innovation is a relatively new phenomenon that began only in the mid-1990s when advocates for open-source software began to argue that computer code should be freely available for thousands of independent minds to play with and improve.” “They overturned the widely held model,” Ms. Cohen quoted Carliss Y. Baldwin, a business administration professor at the Harvard Business School, adding: “What makes Eric’s work so significant is that it is unprecedented to try to measure the extent of user innovation. He shows that we’ve had on a set of mental blinders.”