Applied Ethnography and the Ecosystem of Demand

They Don’t Want Your Product innovation and the ecosystem of demand

Royce Johnson

27FEB2013 © Royce Johnson “If I had asked my customers what they wanted, they would have asked for faster horses”

Henry Ford

27FEB2013 © Royce Johnson Universe of what they want

27FEB2013 © Royce Johnson Built on “will say”

Disregarded “won’t say”

27FEB2013 © Royce Johnson 27FEB2013 © Royce Johnson An ecosystem of demand, look from the outside in

Points of Pain / Delight Clinician’s Goals

Clinician’s Daily Life Activities

27FEB2013 © Royce Johnson And your response space is far more powerful than ‘just’ new offerings

2. Platform Use common components or building blocks to create 1. Offerings derivative offerings develop innovative new products 3. Solutions or services Create integrated and customized 12. Brand offerings that Leverage a brand solve end-to-end customer into new domains problems

4. Customers 11. Networking Discover unmet needs or Create network-centric identify underserved intelligent and integrated customer segments offerings

5. Customer 10. Presence Experience Create new channels or Redesign customer innovative points of interactions across all presence, including the touch points and all places where offerings can moments of contact be bought or used by customers 6. Value Capture Redefine how company gets paid or create innovative 9. Supply Chain new Think differently about revenue streams sourcing and fulfillment 7. Processes Redesign core operating 8. Organization processes to improve Change form, function or efficiency and effectiveness activity scope of the firm Sawhney, M. et al, The Twelve Different Ways for Companies to Innovate, MIT Sloan Mgt Rev, 2006 7 27FEB2013 © Royce Johnson Methods to find the “Can’t Say‘s”

Method Typified by BUT .. Design Think IDEO They don’t just want Things Outcome Driven Innovation (ODI) Strategyn They don’t live to do ‘jobs’ Demand-first Innovation (DIG) Vivaldi What they want is complicated: and Growth Group you have to immerse in daily lives

27FEB2013 © Royce Johnson patientvoices.uk.org

27FEB2013 © Royce Johnson Customer Centric Immersion is distinct from other types of research • Customer-centric immersion drives innovation by providing and rich and nuanced view of customers’ daily life activities • Unlike other self-report techniques, immersions enable us to tap into customers’ articulated and unarticulated goals, points of pain and points of delight

Customer centric Focus Group Quantitative Research immersion

Identifies areas for Unearths explicit needs Validates opportunity Objective innovation areas

Understands the Understands a specific Validates specific need ecosystem of demand area of interest areas identified in qualitative research Outcome e.g. How Doctors interact e.g. What Doctors want to across the wound care improve in wound care e.g. Confirm Doctors are process most frustrated by xx in wound care In-context Out-of-context Out-of-context Context e.g. Doctors in hospitals e.g. Doctors in a focus e.g. Doctors on-line group facility survey Taps into latent needs Taps into self-expressed Taps into self-expressed needs needs Benefits e.g. Observe doctors and see needs they are e.g. Doctors tell you their e.g. Doctors select needs unaware of problems they most identify with

10 27FEB2013 © Royce Johnson Demand-first Innovative Growth

Immersion Customer Customer Research Goals Points of Pain Desired Benefits + and Delight

Existing Customer

Immersive Customer

Understanding Research

Opportunity Growth Platform Growth Platform Landscape Development Assessment

Competitor Company

Customer

Identify and Assess andIdentify Opportunity Spaces Opportunity

Solution Ideation Prioritization Rapid Testing

Develop Develop Innovation

27FEB2013 © Royce Johnson Outside-In Progeny: Opportunities

from *&^(&^$@#!!! to Carestation

from Toothpaste to OralCare

from Point of to Point of Purchase Purpose

27FEB2013 © Royce Johnson Qualitative data as input to Analytical Anthropology

• Demand – Statements of goal, task, need, desired result, feelings – Always translate “remedy thought starters”

• Supply – Statements of frustration and aggravation, problems

“What are we really doing here?”

27FEB2013 © Royce Johnson A case study

[healthcare insurance ] FOR THE [small business owner]

27FEB2013 © Royce Johnson Required: a Framing Question, narrow and broad foci need to be considered:

Our new Insurance Demand Landscape should be about …. More Narrow More Broad Breadth of Focus

More Emotional

How do they feel about Insurance? Why do they do

what they do?

What do they experience Is it about coverage? in their day?

What factors lead their choices when faced Why do they make the Why do policies cover some with many? decisions they make? Emphasis of Value procedures and not others ?

Features? Procedures? What drives their Access to Care? How do coordinators RX/TX decisions? control & communicate?

More Functional

27FEB2013 © Royce Johnson Multi-dimensional immersion approach includes journals, interviews and observations with customers

Homework Interview Observation Data Capture What it is • Journal participants fill out • In-depth interview conducted • Observation of • A standard capture prior to the interview at the hospital site customers across sheet used for every the day’s journey interview Purpose • To understand the • To understand participants’ • To identify latent • To collect the data in a context around which latent unmet needs, wants unmet needs systematic way that can participants live within the and perceptions • To understand the be can be easily frame of reference • To go into detail on points of ecosystem of transferred from all the • To identify points of pain pain identified in the journal demand around the interviews and shared to and latent unmet needs frame of reference build the Demand participants experience in Landscape their daily lives around the frame of reference Actions • Develop the journal • Interviewer: • Observe customers • Take literal notes during • Distribute it to participants – Review homework for key items at the site interviews and for completion prior to to probe • Take detailed notes observation interviews – Bond with participant of observations in • Finalize the data – Active listening / probing data capture capture template • Scribe: template • Synthesize notes from – Capture details of interview • Probe customers data capture sheet after conversation into template before and after each interview their decisions

16 27FEB2013 © Royce Johnson Case 1

27FEB2013 © Royce Johnson 17 The Customer Demand Landscape is composed of customer motivations related to activities, choices and decisions

Frame of Pain Inputs

Immersion Research Demands Landscape •Journals •Observations •Interviews

Existing Research •Consulting projects •Points of Pain Detailed Goal Meta- •Primary Research •Points of Delight Goals Cluster Goal •Scientific Studies •Published Studies

Points of Pain / Detailed Goals Goal Clusters Meta-Goals Collected data Delight

Journals submitted. What are the What goals are How do these What are the most Interview notes"es. barriers / customers trying goals group primary types of Interview videos. facilitators for to fulfill as they together to define customer Photographs. customers to meet overcome barriers a discrete range of motivations in Observations notes"es. their own and reinforce meaningful regards to meeting Mkt research reports. demands? facilitators to motivations? their demands? achievement?

27FEB2013 © Royce Johnson Group Detailed Goals into Goal Clusters

Process

Detailed Goals are affinity diagrammed

Detailed Goals are then clustered by common themes to form Goal Clusters

Goal Clusters are then affinity diagrammed to develop Meta-Goals

Meta-Goals are sorted by Frame of Reference or other relevant drivers

27FEB2013 © Royce Johnson 19 Demand Landscape (Demand Space)

27FEB2013 © Royce Johnson 20 World of Pain (Supply Issues)

How do small business owner’s select health insurance programs for their employees??

C1. How and where to H start leading a healthy B1. Uncertainty about how to life find the right medical care

H L B2. Frustration about not M A2. Application process is getting enough personal C2. How to maintain a attention A1. Overwhelming quantity of cumbersome healthy lifestyle as I information on health insurance get older H A3. Confusion around communication of insurance plan A8. Training and tools not M always available when C3. Education on alternatives needed [A] A4. Customer service M H to traditional medical care experience with health B3. Concern about insurance companies is trustworthiness of some A. Core: keeping them covered unpleasant doctors

M C4. Desire to have A7. Feel undervalued by coverage for the full range A6. Anxiety over medical care H insurance carrier [A] H of health & wellness alternatives A5. Frustration over costs and coverage significant premium increases M B4. Medical treatment process is B. Extended: logistics H overwhelming C5. Offer me a B5. Frustration about being plan which fits my athletic the middle man lifestyle

C6. Reward me for pro- C. Further Out: quality-of-lifestyle actively taking care of my health 27FEB2013 © Royce Johnson 21 Themes of Pains in Health Insurance: Overwhelming Quantity of Information When Choosing Health Insurance Plan

Overwhelming Quantity of Information When Choosing Health A1 Insurance Plan

Perceived Relevant Quotes: Points of Pain Intensity

• I am confused because there is a “We googled “low-cost, low deductible. It H was difficult to know where to start. They large quantity of complex insurance just put as much information on their information to sort through websites as they can. You don’t really have anyone to ask.” – Anthony (IM), Raleigh • I am frustrated by how hard it is to M get the information I need “There are always more questions I could have asked. There is just so much to understand. I never got into nitty-gritty • I am frustrated because I don’t M about what would happen if someone got have the basic knowledge in order injured at my store.” – Husein (GM), Dallas to buy (or sell) insurance

“I am still just starting to grow my health L insurance business, and I need to know • I am annoyed that I don’t have the which carriers offer the best plans. I saw information I need to target clients something on TV the other day that looked in a more focused way (info is not interesting because it cheap. I wondered focused) [A] how and wanted to know more.” – Fred (A), Chicago Overall Intensity M 27FEB2013 © Royce Johnson 22

Opportunity is found at the collision of Demand and Frustration

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To protect my businessTo run my businessTo be responsive To be recognized To be in control and employees smoothlyLevel of Involvement and true to values and respected

To create growth platforms, identify opportunity spaces for innovation

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To protect my businessTo run my businessTo be responsive To be recognized To be in control and employees smoothlyLevel of Involvement and true to values and respected

• Ideas ≠ Products • Opportunity ≠ Growth

“Business is done when orders are taken”

“If you want to keep getting what you have been getting, keep doing what you have been doing”

Key Questions Activities Deliverables

What innovative and Revisit opportunity spaces to Long list of idea seedlings breakthrough solutions could include additional global Short list of copy-written be developed to serve the perspective, if needed concepts, ready to be needs identified in the Prepare and facilitate 2-day presented to customers and opportunity spaces? Ideation Workshop with project internal audiences for How can existing solutions (both team, “smart customers” and prioritization internal and external) could be relevant outside experts improved, enhanced or Develop idea seedlings into repackaged? copy-written concepts

Key Questions Activities Deliverables

How can we determine which Customer research on impact Prioritized concepts solutions will have the best potential of top concepts (RNI Growth Playbook trade-off of impact vs. ease of testing methodology through recommendation implementation? qualitative research) How can we build an attractive Internal assessment of and balanced Growth implementation ease, Playbook? leveraging “Company Lens” information from Phase 2

Core Team Workshop

Key Questions Activities Deliverables

Are we really right about Rapid prototyping through any Enriched, Prioritized and customer response? relevant means to simulate Optimized Growth Playbook value proposition. Can we enrich the Playbook with recommendation new insights? External “wild type” assessment of perceived value If we build it, will they come? Core Team Workshop to

weed&feed

In-context pressure testing Perceived value of conceptual solutions Optimized Playbook

Beyond Existing Customers

Beyond Existing Brand

Beyond the Category

Beyond the Industry

Beyond Silos and Functions

Beyond the Strategic Business Unit

Beyond Habitual Domains