BUILDING AND SUSTAINING INNOVATIVE
ORGANIZATIONS
RAJ ECHAMBADI
Developing Winning Products
Crossing Over to Mass Market
Dominance
INNOVATION ADOPTION LIFE CYCLE
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EARLY MARKET IS FULL OF TECHNOLOGY-
CURIOUS EXPLORERS
There may be no pain point. Minimum Viable Product is OK
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MOST INNOVATIONS DO NOT SURVIVE!
THEY FALL IN THE CHASM
Chasm
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FOLLOW THE BOWLING ALLEY STRATEGY
Remember the way to a mass market is always through a niche market
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BOIKLING ALLEY STRATEGY
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Emergence of dominant design; scale for volume
Efficiencies become important
7 8 9 10
4 5 6
2 3
More complex
1
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FOLLOW THE BOWLING ALLEY STRATEGY
TO THE MASS MARKET
At the end of the early majority, 50% of the market has adopted
Hyper-growth!
Increasing Volumes and
Moving up the
Experience Curve
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INNOVATION ADOPTION LIFE CYCLE
Mainstream product that
Product Sales Trajectory
is reliable and cheap
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The early market is forgiving of
“buggy” products
Experiment
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The early market is forgiving of
“buggy” products
Experiment
Find a niche
Develop a polished, error-free
total product for this segment
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The early market is forgiving of
“buggy” products
Experiment
Find a niche Generate volumes and harness cost
Develop a polished, error-free advantages so as to develop
total product for this segment reliable products
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BUILDING AND SUSTAINING INNOVATIVE
ORGANIZATIONS
RAJ ECHAMBADI
Developing Winning Products
Customer Journey Maps: Identifying
Moments of Truth
CUSTOMER JOURNEY MAPS
A customer journey map documents customer experiences; helps companies
best understand the emotions and touch points as customers experience a
product
They are good for configuring a specific new product or service and for
prioritizing features in an existing product within a specific price band
Vital for giving organizations the “moments of truth”
It is a living document
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1. NAIL DOWN YOUR PERSONAS
Think of it as a composite sketch of your segment, described in terms of
demographic information, and psychographic profiles including media habits
They are typically described as a range (e.g., 30—45 years old, live in Western
Africa). Give the persona a name
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Creating
Personas
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Site
analytics
Creating
Personas
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Site
analytics
Creating Social
media
Personas listening
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Site
analytics
Creating Social
media
Personas listening
VOC
Research
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Site
analytics
Talk to your Creating Social
company media
personnel Personas listening
VOC
Research
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2. JOURNEY MAP – SEQUENCE OF
CONSUMPTION ACTIVITIES
Maintenance Re-
Need Research Consider Choice Complements
and Disposal purchase
Make the case Stand out Right product Opportunities Maintain, service,
Provide unique
at the right for cross- and upgrade
value
place selling opportunities
at the right time
at the right
price
and right
support
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3. JOURNEY MAP – EMOTIONS INVOLVED
Maintenance Re-
Need Research Consider Choice Complements
and Disposal purchase
PAIN
POINTS
Gains
Touchpoints
(channels)
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JOURNEY MAP FOR ARTIFICIAL
(SYNTHETIC) BLOOD
Regular Blood Artificial Blood
Blood type matching required No blood matching
Checked for diseases No disease transmission possibility
Shelf life of 42 days $1500 / unit
$300 / unit from Blood Banks in
Hospitals
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JOURNEY MAP FOR ARTIFICIAL BLOOD
Maintenance Re-
Need Research Consider Choice Complements
and Disposal purchase
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JOURNEY MAP FOR ARTIFICIAL BLOOD
Maintenance Re-
Need Research Consider Choice Complements
and Disposal purchase
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Journey maps can help you create great value
propositions that deliver exceptional utility
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BUILDING AND SUSTAINING INNOVATIVE
ORGANIZATIONS
RAJ ECHAMBADI
Developing Winning Products
General Philosophy about Building
Great Products
Your innovation should do the “core function” to the
segment really, really well! No compromises here
Develop mechanisms to elicit feedback from the
appropriate market. Voice of the customers
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Do not fall into the “Swiss Army Knife” syndrome
Do the added features detract the consumers from doing
the “core function” effectively? Complexity does not
always add value
Practice tough love when it comes to building
innovations
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The core mantra: It’s always about customer
benefits
Derive the pathway from product features to
customer benefits
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Feature
(What is it?)
New type of a braking system for cars
Digital shower – one that can be
controlled remotely
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Feature Function
(What is it?) (What does it do?)
New type of a braking system for cars The computer onboard the car will
automatically pump the brakes, if the
distance is too short, to avoid collision
Digital shower – one that can be (a) Thermostatically blends cold and
controlled remotely hot water at desired temperatures and
(b) delivers water at the right
pressures
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Feature Function Benefits
(What is it?) (What does it do?) (What primary need
does it satisfy? Pain
point(s) alleviated?)
New type of a braking system for cars The computer onboard the car will Safety for the driver and the
automatically pump the brakes, if the passengers
distance is too short, to avoid collision
Digital shower – one that can be (a) Thermostatically blends cold and (a) Safe and (b) satisfactory showering
controlled remotely hot water at desired temperatures and experiences. No accidental scalding
(b) delivers water at the right
pressures
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STEPS TO THINKING ABOUT BUILDING
GREAT INNOVATIONS
What are? “Table stakes” features
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STEPS TO THINKING ABOUT BUILDING
GREAT INNOVATIONS
What are? “Table stakes” features
Question the status quo to create
What if?
“innovative” features
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STEPS TO THINKING ABOUT BUILDING
GREAT INNOVATIONS
What “Table stakes” features
are?
Question the status quo to create
What if?
“innovative” features
What “Delight” features
wows?
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The dominant customer benefit becomes the
BASIS of competition
Does this matter to your customers?
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BUILDING AND SUSTAINING INNOVATIVE
ORGANIZATIONS
RAJ ECHAMBADI
Developing Winning Products
Product Configuration Maps: How to
Develop Winning Products
PRODUCT CONFIGURATION MAP:
FINDING THE INNOVATION SWEET SPOT
BALANCE
Adapted from Goldenberg, Horowitz, Lovav, & Mazursky, 2003
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PRODUCT CONFIGURATION MAP:
FINDING THE INNOVATION SWEET SPOT
BALANCE
-
Adapted from Goldenberg, Horowitz, Lovav, & Mazursky, 2003
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PRODUCT CONFIGURATION MAP:
FINDING THE INNOVATION SWEET SPOT
BALANCE
-
Adapted from Goldenberg, Horowitz, Lovav, & Mazursky, 2003
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PRODUCT CONFIGURATION MAP:
FINDING THE INNOVATION SWEET SPOT
= BALANCE
-
Adapted from Goldenberg, Horowitz, Lovav, & Mazursky, 2003
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MAINTAIN (=)
These are the table stakes
These features are highly relevant to the customers and
sometimes to the category
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SUBTRACT (-)
(Fernandez, 2016)
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(Wikimedia Commons/arulnathan, 2009) (Wikimedia Commons/Corvettec6r, 2010)
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(GE Healthcare, n. d.)
(Wikimedia Commons/Sebastian Orellana C., 2016)
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ADD (+)
Just adding features does not always
add consumer value.
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SIMPLISTIC: ADDING MORE FEATURES
ADDS COSTS
Adding a new attribute that changes
(Wikimedia Commons/BruceBlaus, 2013)
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BALANCE
Task unification: Defrosting filament in an auto windshield does both defrosting
and serves as a radio antenna
Miniaturizing a PC and adding convenience and making it into a laptop
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DIVIDE ()
Subdividing a system into smaller independent building blocks (called modules)
that can be then separated or combined to be standardized and create
interchangeable products
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vs
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ADVANTAGES OF MODULAR DESIGNS
Product variety from a smaller set of underlying components
When different components change at different rates, modularity is preferred
Automobile form changes more rapidly than underlying power trains
Differential consumption. Razors and blades
Component economies of scale
Supply chain efficiencies
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WHEN THE INNOVATION IS NOT GOOD
ENOUGH VERSUS GOOD ENOUGH
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BALANCE SUPPLY-SIDE AND
DEMAND-SIDE FACTORS
Company-side Customer-side
What are our capabilities? What is it customers like/love about the
What do competitors do well? What are product?
they missing? What is it customers do not like/hate
Are there things that we can borrow about the product?
from other categories that can do the What is in their wish list?
job better?
What about the suppliers? Ecosystem?
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At the end of the day, balance supply-side and demand-
side factors to develop the RIGHT innovation that
best FITS customer needs
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STRATEGY CANVAS FOR NINTENDO WII
Affordable, fun product for the entire family
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HISTORY OF ENCYCLOPEDIAS
Encyclopedias have existed for around
2,000 years; the oldest - Naturalis Historia,
was written in77 AD
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HISTORY OF ENCYCLOPEDIAS
The modern encyclopedia originated around the 17th century. Initially, single
volume works, they became multi-volume works over time
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HISTORY OF ENCYCLOPEDIAS
Encyclopedia Britannica (EB), a general knowledge, English language
encyclopedia, started around 1768, was a dominant player in this market
INCREDIBLE QUALITY as the CVP. Expert-driven model
The last print volume was produced in 2010 spanning 32 volumes (source:
Wikipedia)
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ENCYCLOPEDIA BRITANNICA
THROUGH THE YEARS
For the first 200 years, editorial revisions were made with a variety of manual and
mechanical tools and then in the 1970s, EB was updated using a mainframe
computer
The business model was a combination of upfront cash payment for the multivolume
set plus yearly subscriptions to the yearbook, a volume of updates.
The multivolume set was a break-even proposition with profits coming selling
subscriptions to the yearbook
Sales were booming; in 1990, 100,000 units sold by a 2000-plus strong salesforce
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ENCYCLOPEDIA BRITANNICA IN THE 1990S
The sales model, i.e. door-to-door selling, was becoming obsolete
PC were shipped with general knowledge CD-ROMs. In 1993, Microsoft launches
Encarta
EB was conspicuous consumption. Now the critical CVP was masked by a
digital product
In 1994, EB launched its own CD-ROM encyclopedia for $1200. It was
competing against free CD-ROMS
In 1994, a web-based version called Britannica Online was launched
Print sales fell to 51,000 units in 1994 and 3,000 in 1996
MODULE 3
BUILDING AND SUSTAINING INNOVATIVE
ORGANIZATIONS
RAJ ECHAMBADI
Developing Winning Products
Application Center: Wikipedia
WIKIPEDIA
The forerunner was Nupedia whose articles were written by volunteer
contributors with appropriate subject matter expertise and then peer-reviewed by
expert editors before publication of content as free
Very high quality of articles; comparable to that of professional encyclopedias
Very slow process. Less than one hundred articles were published
In 2001, Wikipedia was formed as a free encyclopedia on the Wiki platform as a
side project to Nupedia
Evolved to a bottom-up approach with the central philosophy that no central
organization should control editing
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COMPETING VALUE CHAINS OF BRITANNICA
VERSUS WIKIPEDIA
Encyclopedia Britannica (print) was a product in the mature stage. Wikipedia was a
nascent online product that needed to cross the chasm
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COMPETING VALUE CHAINS OF BRITANNICA
VERSUS WIKIPEDIA
Encyclopedia Britannica (print) was a product in the mature stage. Wikipedia was a
nascent online product that needed to cross the chasm
EB created an online product that was a replica of its print product. If Wikipedia had
chosen to imitate EB, it would have not succeeded. So it had to be innovative
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COMPETING VALUE CHAINS OF BRITANNICA
VERSUS WIKIPEDIA
Encyclopedia Britannica (print) was a product in the mature stage. Wikipedia was a
nascent online product that needed to cross the chasm
EB created an online product that was a replica of its print product. If Wikipedia had
chosen to imitate EB, it would have not succeeded. So it had to be innovative
Journey map for EB: High quality product. But some pain points: Expensive, not
timely, limited academic topics, restrictive access
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PRODUCT CONFIGURATION MAP: WIKIPEDIA
+
ADD
Wisdom of crowds
Pop culture topics
= -
Length of entries
Real-time updating
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PRODUCT CONFIGURATION MAP: WIKIPEDIA
+
ADD
Wisdom of crowds
Pop culture topics
= -
Length of entries
Real-time updating SUBTRACT
Authority of experts
Sales expenses
Free product
Iterative quality
MODULE 3
PRODUCT CONFIGURATION MAP: WIKIPEDIA
+
ADD
Wisdom of crowds
Pop culture topics
= -
Length of entries
Real-time updating SUBTRACT
Authority of experts
Sales expenses
Free product
Iterative quality
DIVIDE
Division of labor
OWNERSHIP
MODULE 3
PRODUCT CONFIGURATION MAP: WIKIPEDIA
+
ADD
Wisdom of crowds
Pop culture topics
= -
Length of entries
Real-time updating SUBTRACT
MAINTAIN Authority of experts
Academic topics Sales expenses
Global Free product
Iterative quality
DIVIDE
Division of labor.
OWNERSHIP
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(Wikimedia Foundation, n. d.)
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STRATEGIC RENEWAL OF EB
Internet access exploded
Experimentation - a free consumer encyclopedia and a learning portal for K-12
schools – did not work. But allowed EB to understand the Internet and the Web
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BRITANNICA TODAY
Dynamically updated content in minutes and hours rather than weeks and
months by professional experts around the world
Different market from Wikipedia. 85% of revenues come from digital education
services business selling curriculum products in Math and Science; 15% from
being a quality reference source
Sources: Encyclopædia Britannica's President on Killing Off a 244-Year-Old Product.
By: Cauz, Jorge, Harvard Business Review,, Mar2013, Vol. 91, Issue 3; NewYork Times,
http://mediadecoder.blogs.nytimes.com/2012/03/13/after-244-years-encyclopaedia-britannica-stops-the-presses/
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REFERENCES
Alexa. Retrieved from http://www.alexa.com/topsites
Arulnathan. (2009). Nano [Online image]. Retrieved from https://commons.wikimedia.org/wiki/File:Nano.jpg
BruceBlaus. (2013). Blausen 0580 Insulin Syringe&Pen [Online image]. Retrieved from
https://commons.wikimedia.org/wiki/File:Blausen_0580_Insulin_Syringe%26Pen.png
Corvettec6r. (2010). Suzuki Maruti 800 [Online image]. Retrieved from
https://commons.wikimedia.org/wiki/File:Suzuki_Maruti_800.JPG
GE Healthcare. (n. d.) MAC 800 ECG [Online image]. Retrieved from http://www3.gehealthcare.co.uk/en-
gb/products/categories/diagnostic_cardiology/resting_ecgs/mac_800
Fernandez, R. (2016). IPhone 6 and iPhone 7 ports comparison [Online image]. Retrieved from
https://commons.wikimedia.org/wiki/File:IPhone_6_and_iPhone_7_ports_comparison.svg
REFERENCES
Bolo, R, & Bolo, M. (2013). Apple II tranparent 800 [Online image]. Retrieved from
https://commons.wikimedia.org/wiki/File:Apple_II_tranparent_800.png
Sebastian Orellana C. (2016). Cirque du Soleil's Grand Chapiteau in Santiago, Chile [Online image]. Retrieved from
https://commons.wikimedia.org/wiki/File:Cirque_du_Soleil_in_Santiago,_Chile;_2016.jpg
Wikimedia Foundation. (n. d.). Retrieved from https://www.wikipedia.org/
Zarex/Boffy b. (2006). IBM PC 5150 [Online image]. Retrieved from https://commons.wikimedia.org/wiki/File:IBM_PC_5150.jpg
REFERENCES
Goldenberg, J., Horowitz, R., Lovav, A., & Mazursky, D. (2003, March). Finding your innovation sweet spot. Harvard Business
Review.
