A few months ago Mentors Montreal, an organisation I founded, was drafted to help provide and manage mentors for the Cooperathon; an open innovation competition organised by the Desjardins Group, in collaboration with Hacking Health and CIC.
Desjardins is the largest association of credit unions in North America. Hacking Health organises hackathons in the health sector around the world and CIC is a financial services group under the umbrella of the French Crédit Mutuel Bank.
The competition is loosely based on the hackathon model and lasts a full month. The goal is to bring everyday people, entrepreneurs, intrapreneurs, startups, organisations and companies of all sizes together to solve social challenges and hopefully create new, viable, companies and organisations rather than just software.
In my view, open innovation is one of the most useful growth tools in an organisation’s arsenal. Open innovation has come to mean different things to different people. Originally it was used specifically for technological innovations. The expression was applied mostly in large organisations and it basically meant having an external party contribute to the development of a new technology or furthering an existing one.
Today open innovation (sometimes referred to as collaborative innovation) is more a mindset than a specific concept.
It is also applied to all types of innovations, in all sectors, and not only technological ones. The only part of the original definition that still stands is that it requires collaboration between, at least, two distinct (ownership wise) entities.
How can open innovation help my organisation?
Companies and organisations that do not practice some form of open innovation will most likely not prosper or even survive the next decade. This because scientific and technological progress is happening at such a fast pace (compared to recent history) that no single organisation can keep up on its own.
How open innovation can benefit a startup
Collaborating with an established business or organisation of any size can help you:
- Find your product/market fit sooner
- Discover new markets
- Get access to expensive equipment/machinery/ resources/expertise faster
- Find the most efficient business model
- Grow your network/eco-system
- Grow at a faster pace
How open innovation can benefit companies and organisations
if you’re an established company or organisation, open innovation can help you:
- Get faster (and cheaper) access to new markets and/or hard to find expertise
- Witness and/or Integrate a new business model
- Understand and implement more efficient processes/equipment
- Accelerate the development of new products
How the Cooperathon does open innovation
As mentioned, the Cooperathon brings startups, companies and organisations together to innovate. It has taken the hackathon concept and adapted it with the specific goal to create lasting companies or organisations that will have a significant positive impact on society.
Desjardins Group (mostly their Desjardins Lab innovation team) and Hacking Health created the concept of the Cooperathon 3 years ago. Every year they evolve and grow it. The Cooperathon is thus a startup itself going through very similar stages as the more traditional startup. It would appear that 2017 was the year they found their product/market fit.
From a couple dozen teams, in Montreal, in 2015, the 2017 edition of Cooperathon brought together;
- over 600 participants in 3 cities (Montreal and Québec, in Canada and Lyon in France)
- 111 teams
- 135 mentors and experts from various entrepreneurial eco-systems
- 18 sponsors
- over 100 contributing partners (companies, organisations -public and NPO – and communities such as Mentors Montreal)
They invited other companies, organisations and governments to submit challenges and employees to coach/work with the teams, created during the Cooperathon, to solve these challenges.
The focus was on 4 different sectors; Health, Fintech, Smart City and Education.
During the course of the competition the teams are offered pertinent workshops on the newest entrepreneurial management methods (including Lean Startup type approaches) and access to experts and business mentors to help them create and start executing on their business model.
The financial cost to the participants is limited to the registration fee (ranges between 15 and 50CAD). The money collected from those fees is donated to a local charity. This year the Dr Julien Foundation was the recipient.
Desjardins has a coop, social-democratic culture and this reflects on the criteria used to evaluate the projects.
Sustainability, environmental awareness and positive social impact are as important as the financial viability of a project. This type of event serves to show that open innovation can also be used to better society as a whole and bring companies, large and small, onboard to work on social issues.
Total prizes exceeded 100 000 CAD divided in multiple categories. Individual cash prizes ranged from 5 000 to 12 500CAD.
Other prizes included admission to a Silicon Valley accelerator program (with flight and lodging) for the Startup track, as well as incubator program admission and workspace for the other tracks.
Social impact of the Cooperathon
Such open innovation competitions serve multiple purposes.
- They bring out of basements great initiatives and projects that may otherwise not see the light of day.
- They help train fledgling entrepreneurs and quickly expand their network.
- They increase, at an exponential rate, the cross-pollination and communication between various fields of study, business sectors, community organisations (public or private) and government.
- They help bring to light and solve (or at least attempt to) the most pressing social issues
- They allow large organisations, including governments, to better understand the local entrepreneurial eco-system and get their feet wet with open innovation
- They expose companies of all sizes to cutting edge innovation management techniques and expertise
- They strengthen the entrepreneurial and innovation eco-systems of their community
The Cooperathon, and other such open innovation initiatives, serve not only to accelerate innovation in a given society, they also help educate and empower entrepreneurs and intrapreneurs alike who want to make this world a better place.
My personal experience with the 2017 Cooperathon was amazing. I learnt so much and expanded my network at a record pace. I also got to meet an incredible amount of everyday people doing extraordinary deeds and surpassing themselves in a way they didn’t even know possible.
I strongly recommend you get involved in open innovation events in your community. I am certain it will make your life better as well.
 Hackathons are intensive events (usually held over a weekend) that gather various professionals to create a software application that will solve a specific problem.
 Hydra-type organisations such as Alphabet are doing a better job at innovating than traditional organisations because they mimic an entire eco-system that has incorporated open innovation in their business model.
Ça vous arrive de réaliser qu’une série de rencontres, qui à première vue sont sans lien entre elles, ont un fil conducteur très concret? C’est ce qui m’est arrivé récemment.
Dans une période de 48 heures j’ai assisté à l’enregistrement d’un podcast, dont la thématique était la responsabilité sociale vs la rentabilité, ai rencontré un mentoré où nous avons discuté de l’avancement de son projet, et ai assisté à un meetup entrepreneurial où un conférencier parlait de la procrastination. Ce n’est que quelques heures après que je me suis rendu compte que tous ces sujets avaient une même trame de fond; la motivation entrepreneuriale.
Nos valeurs comme source de motivation entrepreneuriale
Nous savons tous, en tant qu’entrepreneur ce que c’est que d’être motivé, et encore plus, de perdre notre motivation (ça nous arrive tous à l’occasion). Ce qui nous échappe, pour la plupart d’entre nous, c’est d’où vient notre motivation. Quelles sont les sources qui l’alimentent?
Dans le cadre du podcast, l’animateur demande aux entrepreneurs ce qui les motive à agir de manière socialement responsable dans les situations où cela impacte leur profitabilité négativement. La réponse se résume aux valeurs fondamentales qui animent les entrepreneurs.
Il en ressort également que leurs valeurs sont responsables, en majeure partie, de leur persévérance lorsque tout va mal ou lorsque leurs décisions sont attaquées de toute part.
Une constatation importante de la part des entrepreneurs est qu’il doit s’agir de LEURS valeurs et non celles que la société ‘’imposent’’ aux entrepreneurs.
Lorsqu’une entreprise adopte des valeurs bien vues socialement mais qui ne reflètent pas étroitement les valeurs des fondateurs (principaux gestionnaires) elle ne sera pas motivée à agir éthiquement (en accord avec ses valeurs) lorsque le coût sera trop élevé. Il en va de même, dans les grandes entreprises, lorsque ses employés ne partagent pas les valeurs corporatives. L’expression utilisée par un des entrepreneurs lors du podcast illustre ceci très clairement. Il a dit ‘’À un moment donné, le miroir craque’’.
C’est alors qu’on voit apparaître des comportements d’entreprises totalement dissonants des messages véhiculés par celles-ci.
On a qu’à penser à ce qui se passe présentement avec, entre autres, les grandes sociétés pétrolières, de télécommunications ou pharmaceutiques.
L’objectif comme source de motivation entrepreneuriale
Il n’y a en soit rien de mal à se fixer des objectifs pour se motiver. Ça fonctionne plus souvent qu’autrement.
Le problème survient lorsque l’atteinte de nos objectifs devient la principale, voir la seule, source de notre motivation.
L’adage qui dit La fin justifie les moyens met alors la scène pour des comportements non éthiques.
Afin d’atteindre notre objectif, nous sommes alors prêts à agir ‘’temporairement’’ à l’encontre de nos valeurs.
Le hic est que le chemin pour atteindre nos objectifs représente la quasi-totalité du temps passé au travail.
Nous en venons donc qu’à oublier nos valeurs afin de faire ce qu’il faut pour atteindre nos objectifs.
Je n’ai pas besoin de vous citer d’études, bien qu’il y en ait quelques unes, pour vous convaincre que d’agir à l’encontre de ses valeurs au quotidien est épuisant, voir drainant. C’est aussi une très bonne recette pour s’assurer d’être malheureux (ou du moins peu satisfait de notre situation).
Les motivations entrepreneuriales intrinsèques vs extrinsèques
Lors de ma rencontre avec mon mentoré, nous avons discuté de l’avancement de son projet, qui stagnait au moment de notre rencontre précédente. Ce dernier réalise que sa motivation initiale (faire beaucoup d’argent) n’était plus assez forte pour le faire avancer. De plus, il se présentait à lui de plus en plus de choix où le meilleur, afin d’atteindre son objectif, le rendait sérieusement inconfortable.
Il a donc cherché une autre source de motivation. Ce qu’il a trouvé en identifiant les valeurs sur lesquelles il veut que son projet repose. Elles ont été puisées à partir de ses propres valeurs. Cette prise de conscience lui a non seulement permis de reprendre son momentum entrepreneurial, mais elle a significativement changé le plan qu’il s’était fait pour atteindre ses objectifs (dont un reste faire beaucoup d’argent). Il réalise que la façon d’atteindre ses objectifs revêt une importance tout aussi grande, sinon plus, que l’atteinte de ses objectifs. Un quotidien plus agréable, où il se sent confortable avec ses décisions, impacte positivement sa motivation.
Ce qu’il faut retenir est que les sources intrinsèques de motivation, telles nos valeurs fondamentales, assurent une motivation entrepreneuriale plus forte et plus pérenne que les sources extrinsèques, tels les objectifs, incitatifs ou valeurs qui ne sont pas les nôtres.
Les sources extrinsèques de motivation sont utiles et bénéfiques dans la mesure où ce ne sont pas les seules ou principales sources de motivation.
Dans la seconde partie de ce billet, nous examinerons de plus près l’identification de nos valeurs et leur impact sur la raison principale de l’échec entrepreneurial.
 L’épisode sera rendue public le 4 octobre sur le site www.lesderangeants.com
 Le conférencier est Mathias Durand de www.procastination.com pendant le meetup de Digital Entrepreneurs
In our last post we looked at various management approaches to reduce risks. One of them pertained to business experiments. In this post, we’ll dig a bit deeper to better understand this approach.
You have most likely heard of business experiments. The Harvard Business Review, as well as many other business management publications, published multiple articles on the topic in the last few years. They were mostly in the context of innovation.
What is a business experiment?
If you have not, a business experiment is simply testing a concept (idea, program, process, design, product, strategy, etc.) with stakeholders (customers, suppliers, distributors, employees, etc.). The experiment’s goal is to provide pertinent data to assist with decision making (usually with go/no go decisions or sometimes fine-tuning).
So yes, you do know what a business experiment is. It’s been around for, well, pretty much ever. Now you’re asking yourself; Why this article is drawing my attention to it?
The reason is that business experiments are no longer used as an occasional management tool, they are transforming into the way businesses are managed.
Why are companies experimenting at an increasing rate?
As we mentioned, business experiments are used to collect data that assists management with decision-making.
Decision-making in the business world is becoming a more demanding task (to say the least).
- Companies are significantly leaner (i.e. less resources and more work for everyone, including managers).
- The amount of information available, from secondary sources, is enough to make any manager’s head spin.
- There is a higher supply than demand for managers hence making bad decisions is a riskier proposition for your longevity in a given company than ever.
- In many sectors, markets are moving at a faster pace than ever before with competitors coming in from everywhere and customers’ choices exploding.
Hence managers are turning to ways to reduce the time and the risk involved to make the best possible decisions.
Running a business experiment to gather pertinent and timely data quickly answers the needs of over-burdened managers to reduce the risks of the decisions they make.
This explains, in part, why organisations are experimenting. What explains the increasing rate at which they are doing it, and transforming it into a management approach, has more to do with the following reasons:
- It’s cheaper and faster than ever to run business experiments (many can be done in minutes with free tools)
- An increasing number of employees or outside consultants have the skills to run experiments, analyse and interpret the collected data
- The costs to store, process and communicate the data/result are very low (compared to a decade ago) and falling constantly.
Business experiments and the Lean Startup framework
So how does an organisation go about implementing business experiments as a managerial approach? There is no one way to do so. There are however experimentation frameworks out there that can structure your approach.
One of these is the Lean Startup framework.
The base of Lean Startup is the experiment. The Lean Startup experiment is based on the scientific experiment model. It follows a build, measure, learn process.
Build (designing your experiment)
Building your experiment is a 3 step process
1. Identify the critical assumption associated with the concept to be tested
When you stop to think about it, there are thousands of assumptions we could test to assist with decision making when managing a business. If we tested all of our assumptions there would be no time or other resources left to run the business. Hence, you only want to test the critical assumptions. The ones that, if not validated, pose a business risk that you (or your organisation) are not willing to take.
2. Transform your critical assumption into a hypothesis statement
Your critical assumption was a thought you put into words. Your hypothesis statement is one sentence that can be validated (or invalidated).
3. Design the experiment that will validate (or invalidate) your hypothesis
Designing your experiment is only limited by your (and/or your team’s) imagination. The way you choose to render the concept of your hypothesis (how you present it or illustrate it) is called your Minimum Viable Product (MVP).
An important part of the MVP is the minimum part of it. In the design of your experiment, you will be aiming at spending the least amount of resources in order to obtain the maximum amount of learnings from your experiment.
This doesn’t necessarily mean bootstrapping your experiment. It simply means that you will make sure that whatever learnings you need to get from your experiment, you get by using the least amount of resources possible.
This can mean it will cost you nothing but a few minutes of the time of one person or tens of thousands of dollars, if that’s the only way to go about getting the information you need. Of course, the cost of your experiment must be proportionate to the financial risk associated with it.
The reason you are making the experiment is to get data that will help you with your decision making. Hence, you want that data to be reliable.
This is where you need a bit of knowledge about primary data gathering. You need to make sure the data you collect is not biased. You won’t be looking to get statistical quality data. That would take too long, cost too much and be an over kill for your purpose.
You’ll simply need the clear direction that your data in headed for.
In business experimentation instead of gathering a lot of data once, you gather a small amount of data repetitively. Although not as precise as statistical data it does provide you with a sufficient amount of information to de-risk, to a great extent, your decision. It is also a more suited approach to an environment that changes rapidly.
When deciding on the data you will be capturing in your experiment, remember these three important rules.
Your data should be:
If it doesn’t go in the direction you thought it would then you can change something in your business strategy or product or program that will make the data go in the direction you want.
You need to be able to re-produce the exact same experiment, in similar conditions and get similar results. For example, if you are testing the design of a snow shovel and are doing it during the storm of the century, the data you collect won’t be accountable.
The more people who interpret the data you collect, the deeper and richer your learnings will be. So make sure that the data captured during your business experiments is shared throughout your organisation. Ensure that everyone knows they are welcome to share their interpretations on the data. Making your experiments, the data collected and the results accessible throughout your organisation will also accelerate business experiments process as some parts/resources of one experiment can be used for others.
The more experience one has at conducting experiments, the faster and more accurately they are done.
This part of business experiments, although it may seem like the easiest, is the hardest. Learning means you are either
- absorbing completely new information (rarely the case) or
- you are changing in some way (sometimes drastically) already stored information in your brain
The second type of learning is the hardest. The more contradictory the data you have is to the one you previously had, the more difficult it is to learn from it.
This stored information in your brain will create a filter that will impact how you interpret new data.
Also, the more resources that has already been invested in a project, the more difficult it is to pivot on a previous course of action.
The benefits of using business experiments to manage
The main benefit, as mentioned previously, is to reduce the risk of your business decisions. This in turn will minimise your losses on various projects.
Another benefit, that is not obvious, is the improvement in work relationships. This happens for multiple reasons.
First, employees get a sense of empowerment. If they submit ideas to upper management with supporting empirical data, they know their idea will be considered.
Also, managers don’t need to spend as much time justifying their decisions. They let the data speak for itself. They do however need to include questioning the quality of the data into their process.
Finally, as mentioned, organisations that use business experiments on a daily basis to manage usually encourage employees to share the results of their experiments. This not only improves internal communication and efficiency it also creates an environment where mistakes, that bring new learnings, are valued.
This type of environment is essential to not only foster innovation but pro-activity.
Getting started with business experiments
If you think that using business experiments may be a profitable management approach for your business, start with one project (which will be a meta experiment) during which all higher risk decisions will be taken with supporting data. The project you select should be one that has high inherent risk within it (like launching a product in a new and different market). It should also be a type of project that is somewhat recurrent in your organisation. This will help you have a baseline scenario in order to compare the results of the meta experiment. Make sure to identify the metrics you’ll be evaluating before starting your meta experiment.
Some metrics (there are many others) you may want to look at would be:
- How long the project took from start to finish
- Overall budget
- What % of the initial planed output was achieved
- Variables pertaining to team cohesion
- Variables pertaining to employee (the ones who worked on the project directly and indirectly) satisfaction
- ROI projected vs achieved on a timeline (3, 6, 12, 24 months)
Implementing any new management approach takes a while. There is no one-size-fits-all recipe. You need to…yes you got it…experiment and find the approach best suited for your organisation.
If you need coaching or help getting started with your first experiment Baker Marketing can definitely help.
 Although MVP most often refers to a prototype of a product, it also means the representation of your hypothesis you will present to participants of your experience.
On Lean Startup, Business Experimentation and Data Driven Organisations
Entrepreneurs know that managing a business today isn’t anything like it was 10 years ago.
Business risks are still there but managing them got a lot harder.
New market realities and business risks
Today’s new market realities such as:
- Break-neck speed technological progress (specially IP related)
- Lowering of barriers to entry in most sectors
- Exponential amount of available data
- Plummeting costs of storing/processing/crunching data
- Omnipresence of social media
Impact every aspect of running a business.
Burying your head in the sand and ignoring these new realities prevents you from hedging the serious business risks they represent.
Risks such as:
- Inability to see new competitors coming fast enough to adjust
- Having higher input/production costs than your competitors
- Fast changing customer needs/habits/preferences
- Developing and marketing unwanted/non optimal products or services
- Sinking money into ineffective sales and marketing
- Inadequate/useless employee training
- Recruiting employees with the wrong skill set
Any of these situations, if not managed for long periods, can put you out of business.
Combinations of these risks managed badly, even for a short time, can have the same effect.
New management approaches to better manage risks
Old management approaches developed over 30 years ago are no longer suited to manage business risks effectively in current market conditions.
New management approaches, techniques and tools, developed specifically to deal with current market realities are much better suited to manage today’s business risks.
Lean Startup, business experimentation and management based on data (resulting in data driven organisations) are such management approaches.
In a nutshell, here are what they are about and how they can help you manage your business risks.
Overall management approach, based on the scientific method, best suited for projects (including starting a new business) that involve market uncertainties or volatility.
It uses fast iterative business experimentation to gather data in order to prove hypotheses and lucrative market existence before launching a full product/service. It uses concepts from other management theories such at lean production, customer management, design thinking and agile development.
It also applies innovation accounting to reduce the financial risk associated with high risk projects.
Risk management aspect
It will help your organisation avoid or manage the following risks
- Inability to see new competitors coming fast enough to adjust
- Fast changing customer needs/habits/preferences
- Developing and marketing unwanted/non optimal products or services
- Sinking money into ineffective sales and marketing
- Starting a company/organisation that isn’t viable in the market
Business experimentation is simply doing small scale versions or parts of a project by testing it out first. You then gather data to support your original plan before going forward with your project.
The subjects taking part in these experiments can be any stakeholder in an organisation such as suppliers, employees, customers, etc.
It is often used to convince the purse holders in an organisation to invest in a project or idea.
Whenever possible, it is done with a scientific approach gathering solid data.
Risk management aspect
When done correctly, business experimentation can help to reduce, but not eliminate, almost all types of business risks.
Management with data (for data driven organisations)
Management with data consists of making all decisions, whenever possible, with data. This data can be of secondary (existing data) or primary sources (comes from analytics, accounting, connected objects or experiments). The data is both external and internal to an organisation.
Risk management aspect
Just like experimentation, which is a necessary aspect of a data driven organisation, management based on data can help alleviate all types of business risks.
Many organisations, especially larger ones, have been using data for management purposes for decades now. This approach is now accessible to small organisations thanks to significantly lower costs of gathering, storing and treating data so it can be useful for decision-making. It does however require a skill set that is not yet prevalent in the workforce.
As you can see these approaches are not distinct from one another. Data driven organisations that fully apply management with data need to be experiment based to gather primary data. Experiment based organisation that apply the approach to new product/service or existing ones, that they wish to keep pertinent in the market, will need a Lean Startup approach.
Lean Startup, business experimentation and management with data are, by far, the most prevalent new management approaches helpful to reduce business risks in current market environments. They are not the only ones. Although many business schools teach (sometimes badly) some or all of these new approaches, many still don’t. Hence you’re mostly on your own to research and learn about them.
A good place to go learn about new management approaches are local Meetups and conferences such as; Lean Startup Circles, Data Driven Meetups and business conferences (such as the Lean Startup Conference, the Intrapreneurship Conference, C2 Montreal or C2 Melbourne).
Transforming your business to use these management approaches is a long term project. In many cases, it requires a shift in the corporate culture. Hence, you should start now.
If you are just starting your business, start it on the right foot by using a management approach that will enable you to properly manage the risks of doing business in today’s fast-paced environments.
If you are starting a company in global fast-paced markets where the competition will be coming from everywhere, or even harder, transforming a long-existing company that is now facing global competition, you need to read this.
In the last few years globalisation increased the pace of innovation in most markets. Hence, predicting future consumer behaviours with traditional market research tools and techniques is not only difficult, it is now nearly impossible.
The yearly market study, based on historical data, has long been the tool on which a large portion of the important decisions have been based on. Although still useful to get an overall picture on your industry, historical data is not suited for the important decision making job in fast-paced markets that are highly competitive.
In order to make quick, pertinent decisions efficiently, you need a different type of information. Given there are many ocean’s worth of information out there, you need to know which information to focus on to ensure you are at the top of your decision-making game.
The market information you don’t need
Statistical market data
Traditionally the first thing one did when doing a market research was to ‘’size the market’’. You’d go to your local library and find census data to identify how many people (or companies) fit in your customer segments. This data was anywhere from one to 5 years old.
Then you’d look at the socio-demographic variables and consumption habits attached to this segment. This data was usually at least 2 to 3 years old. Even when paying big money for market studies done by the big market research firms, you still get information that is, at the very best, 9-12 months old.
This outdate information can send you in a hard concrete wall when you launch products/services that are already outdated when they hit the market. In fast-paced markets this is an almost certain kiss of death; one that will have you spinning and spending all your (and often borrowed) resources, including time and energy, until none are left.
It sounds trite but irrelevant market data, which used to be a small nuisance, can now paralyse a company’s decision making process or at the very least slow it down significantly.
Thanks to the internet, the proliferation of market data applications, tools and connected objects, the amount of market information available is mind boggling. Hence taking the time (and having the expertise) so only (or almost only) relevant data comes in from your pipelines is essential.
The market information you need
This is not a one-size-fits-all proposition. Different organisations will need to focus on different types of information. With this in mind, I’ll elaborate on two of the most common types of information needed to make daily decisions in fast-paced markets.
Customer behaviour information
You need to collect this information throughout your customers’ lifecycle.
- Before they become customers (potential customers – take a look at this previous post to understand the different stages)
- As they are becoming customers (on boarding)
- During the time they are customers (active customers)
- After they finish being your customers ( former customers – focusing on the ones who went to the competition or a substitute solution)
The following table will give you an idea of the various techniques/tools used to gather this information at each stage.
Click for larger image
Competitive landscape information
In fast-paced markets one of the best predictor of change in customer behaviour (and often future revenue decline) is new innovative competitors in the market.
These innovators will bring more efficient technologies, new processes, and better/different value propositions in the market, most often at an equal or cheaper price. These are all heavy influencers of customer behaviours.
Ideally, you would want to know what competitors are coming into your market before they get there. This isn’t always possible but the investment made (not necessarily very big) to keep as informed as possible will yield some of your most useful market information.
These are some places to find information on upcoming competitors:
- Industry blogs/webzines/magazines
- Accelerators alumni or cohort lists
- VC (venture capitalists) investment lists
- National patent office websites
- Social media
Don’t forget, your competition is global so extend your search to countries where competitors are most likely to come from.
Acting on the information you collect
Gathering the right information is not enough of course. You need to make it useful for decision-making purposes.
Before you get to the decision making part, there is an entire path that needs to be followed. The path entails the following:
- Processing and storing the data
- Analysing the data
- Reporting it
- Diffusing it to the right decision-makers at the right time
- Interpreting the crunched data, and finally
- Quickly acting on it
Each of these steps is the subject of a multitude of books and graduate university programs. Many of these steps require different tools, processes and expertise. The task is daunting for certain. In turbulent markets, it is unfortunately essential for your organisation’s survival. As I often tell entrepreneurs I work with the only way to eat an elephant is to start with the first bite.
Where to start
If you’re building a sky-scraper, you won’t start digging a hole with a shovel. You’ll get the equipment, expertise to run that equipment and (implied) processes that make you as efficient as possible to dig the hole.
What you won’t do however is to rent every single tool and piece of equipment you need for the entire project on day 1.
Hence, when you are starting your company or re-inventing it, you’ll need to not only get the right tools, expertise and processes in place to act quickly but also do it in the right sequence and get your timing right. Just in time is the way to go on this one.
Again, there is no recipe or one size-fits-all tool that will answer your needs. You’ll initially need to dig around and look for applications that will help you do whatever tasks you need to accomplish to set your market information based decision system. There will be trials, errors and some frustrations along the way. You will become intimately familiar with the term API.
Eventually, when the time is right (and it makes financial sense), you’ll migrate towards large integrated software solutions and experience a different set of frustrations. There are no ‘’nothing but blue sky’’ solutions to do this that I know of. I would also be very weary of anyone trying to sell me one.
Organisations, big and small, have traditionally based their important decisions on market studies (I should know I have done hundreds of them). These market studies are no longer the right management tools to keep your competitive edge in fast-paced markets.
Market research and information management tools that allow you to acquire and maintain constant intimate knowledge of your customers (current and potential) are now essential to making the right decisions for your organisation.
Fast-paced markets that are global and highly competitive require a different type of information, a different approach and different decision making tools in order to make timely decisions. Fast-paced markets require fast-paced decision making ability. Do you have the right tools, processes and competences in your organisation to enable this?
 If you are serving B2B markets and your customers are mid to large size companies this is still a valuable approach
 Application programming interface: A string of software code that enable two applications to communicate with each other.
The core of every business organisation’s mission is to answer customer needs. In order to do so you must first identify and understand them.
Understanding your customers’ needs is essential but superficial knowledge is not enough to ensure your organisation’s profitability. To achieve product/market fit, the point where you answer needs better than your competitors, you must get to a deeper level of understanding of those needs.
Benefits of understanding customer needs
An added bonus to mastering customer needs (and providing a solution that fulfills them) is that every marketing dollar spent will yield higher returns than those of your competitors, who don’t have the same depth of knowledge.
A deeper level of understanding your customers’ needs will also ensure an overall better customer experience, which we already saw in a previous post on the customer experience journey, leads to higher profitability.
Ok, so now that you are convinced understanding customer needs is in your organisation’s best interest, the question you may be asking is how to go about mastering them.
First you have to identify the needs you will be fulfilling (hint; don’t stop at the needs attached directly to your product/service, also look at the ones surrounding the entire customer experience). Once you have zoomed in on the needs to fulfill, you must not only understand the needs but the whole story around them. This process requires lots of effort, time and knowledge of data gathering techniques. It isn’t as straightforward as it may seem.
As a marketer a huge part of my role, aside from finding the right customers, is to identify and understand their needs. Over the years, I learned that there are three steps to any quest aiming to either identify or understand customers’ needs.
Those steps are; Listen, observe, and empathise
The very first thing you should do when you have a business idea is to talk informally with potential customers. This mostly means listen to their answers. It also helps you figure out who your early adopters are. If it’s not possible for you to talk directly to potential customers, find people who know your potential customers inside out, and talk with them.
Don’t forget to set objectives for your conversation. Examples of conversation objectives are; to see whether the needs you think exist actually do, how they are being filled and the relative importance of those needs. In order to maximise the amount of information you take in, not only do you have to limit how much talking you will do, but you need the proper mindset. Your mind should be open and devoid of as many filters as possible. Always remember that explaining your project in length and your view of the world is just taking time away from achieving your goal. Listen.
On a side note, many of the entrepreneurs I meet are worried that someone will steal their idea before they get a chance to develop it. Unless you have a truly patentable solution (very few are), and potential customers can either beat you to market (they already operate a company in the same field) or spill the beans (to an existing competitor), you have nothing to worry about. Honestly, initial business ideas are very rarely marketable. Even if they were, almost no one wants to put in the blood, sweat, tears and go through the hell that starting a new business entails. Furthermore, even if they did, they’d most likely end up with a completely different business than yours in the end. Lastly if the threat of theft is real, there are still ways to explore the needs of potential corporate customers without spilling your own beans.
Please do not let the fear of someone stealing your business idea prevent you from engaging with potential customers.
Observation is essential to identify less obvious needs and understand all pertinent customer needs at a deeper level. Asking potential customers won’t yield the information you seek because people don’t or can’t always tell you the truth.
There are many categories of observation techniques.
Natural observation techniques allow you to observe your potential customers while they are naturally fulfilling the needs you want to address. Ideally, without them noticing you too much so their behaviours are not altered.
Such observation experiments will yield huge amounts of customer knowledge. Hence you need to ensure you set observation goals for your experiments. Your observation goals can pertain not only to your subjects’ actions but also their interactions, environments, and the tools they use.
You will most likely need to repeat such experiments many times to take in all the knowledge you will need. Alternatively, you can task multiple people to observe the same situation while giving them different observation goals.
Two of my favorite natural observation techniques are shadowing and A day in the life.
These techniques are associated with a goal of understanding a specific thought process or behaviour in a given circumstance.
They require putting the customer in a specific situation or assigning him, or her, a task and then observing. This can be followed by a question period to help interpret what you observed. It can be done face to face, remotely with cameras or on the web (such as A/B testing).
Third person observation
This technique is used in addition to one of the previous ones where the observer is someone who has a vision of the world that is significantly different from you or anyone in your industry. This technique yields much richer interpretation/insights from the data you collect.
Whenever possible, put yourself in your customers’ shoes or, even better; take the time to get to know some of your favorite customers personally. This will enable a relationship of trust and maybe even friendship (personal bonus for you) to develop over time.
Get involved in activities or causes your customers are passionate about. This will give you an even deeper understanding of their values and what is important to them.
Sharing your customers’ values is a requirement to attract them into your community. If you are unsure of what I am referring to here, see this previous post on community marketing.
The 360 view of customer needs
Applying all of these techniques to understand your customers’ needs is required to get a 360 degree view of them. Using many different perspectives to master your customers’ needs will yield rich and actionable information. It will also facilitate innovation in your organisation.
Customer Feedback Flow
Striving to understand customer needs is a continuous process. Set up processes and assign resources in your organisation to make it an integral part of your business activities.
These processes can be as simple as a quick questionnaire you send out on a regular basis, or an automatic feedback one, after a certain task is completed. Analytics reports, comments on social medias summaries or a managed (live or online) community feedback or observation reports are all valid continuous feedback processes that can yield precious information on your customers’ needs.
Be aware that this feedback is highly valuable to your organisation, if you act on it. Hence, reward your customers adequately (often a simple thank you is enough) for sharing their thoughts and concerns.
Mastering the understanding of customer needs is no small task. Your rewards for listening, observing and empathising with your customers, will be a tighter product/market fit, greater customer satisfaction and higher profitability.
 Needs are always dependant other factors. E.g. The need for a given medicine will be dependant on experiencing specific symptoms at a level that requires relief and not being allergic or prone to adverse effects to said medicine.
 The following book describes these techniques : This is Service Design Thinking – M. Stickdorn, J. Schneider et al. – John Wiley & Son