Want to disrupt the competition AND increase share price? Keep it simple.

1 11 2012

Chris van der Hoven writes:

A recent survey of 6000 consumers has resulted in a “Brand Simplicity” ranking. In the UK we would relate to the global ranking which puts Google at No.1 and includes McDonalds, ALDI, Carrefour, Apple, Nokia, Amazon and  IKEA in the top 10. The US rank has Subway at N0.1 ahead of Google (No.3) and Amazon (No.4).

US Ranking – Ref: Siegel+Gale 2012

The report authors claim that the share prices of their previously top ranked (simple) brands have outperformed those of more complex offerings since 2009 by 99%+. They suggest that this is explained by the fact that consumers are 80% more likely to recommend a brand with a simple experience and communication. So, the business case for simplicity is potentially clear.

In our own work, we constantly emphasize the use of techniques that help to A. differentiate in contested markets, and B. seek out disruptions as a way to create ‘uncontested markets’. The very definition of disruption is that value propositions should be relatively less costly, more accessible, and SIMPLER.

You don’t have to be a stats boffin to notice that Facebook.com is now ranked No.118 (out of 125 brands) having plunged 31 places from last year! By contrast Yahoo! has moved up 15 places into the global top 10. Why? Well Facebook is looking more complex and Yahoo (under new leadership) is getting simpler. It’s true that 2 data points don’t make a trend, so lets not get too carried away – however, intuitively it feels right.

So, if you want to disrupt the competition where should you begin? Well, for starters take a look at the listing of US industry sectors by complexity.

Complexity by sector – Ref: Siegel+Gale 2012

If you have a scouting capability within R&D or marketing, get them on the case of investigating these complex sectors first. That’s where there are potentially richest pickings for disruptors. Match a Customer Value Proposition your targeted Customer Segment and design a “simple” offering using a business model canvas.

Recent research in HBR (May 2012) pointed out that you should have around 10% of your total investment targeting transformational (white space) prospects. Within that you should only expect a hit rate of roughly 1 in 10 projects delivering breakthrough products and services. The important point to note from the research is that 70% of the returns emanate from this 10% investment.

So, if you buy into the notion that disruption is more likely in sectors that are over complex (and over-priced as in insurance and healthcare etc), then step one is to target those prospects. To make sure you succeed, step two would be to nurture a culture that can allocate 10% of investment to high risk ideas – i.e. where 9/10 projects fail! The other 90% of the business can get on with ‘exploiting‘ the core (and next space) offerings in a culture which tolerates lower levels of risk.


The funkiest seminar in Malaysia

29 10 2012

Chris van der Hoven writes:











This month we delivered a series of seminars in Kuala Lampur in Malaysia (check out the brochure). These programmes were set up by our colleagues (Tim Ringrose and Bill Shedden) in Cranfield Customised Executive Development in collaboration with local partners K-Pintar. The seminars were very well attended. The first was targeted at big business and the second at SMEs. In both seminars we used the newly minted CitizenM case study which you can see (and use if you like) at http://www.ecch.com/CitizenMcase (or click here to link directly) . Delegates worked in teams to define a strategy and design a business model for the entry of CitizenM (the ‘funkiest hotel in the world’) into Asia. This process highlighted the need for clarity of strategy in selecting combinations of customer segments and customer value propositions (and by definition which combinations to deselect). Delegates debated the problems of disruption and differentiation in what is already a very ‘red ocean’ of competition. There were excellent insights.

It was also really wonderful to catch up with some local loyal alums – e.g. Dr. Amin Khan and CK Tan et al.

“Dynamic technology leadership – the adaptive role of the CTO”

11 10 2012

Chris van der Hoven wrote:

IRI Logo

This month Keith and I have another article in Research Technology Management  (The IRI’s Journal) co-authored with 2 Cambridge colleagues (Dave Probert and Rob Phaal). The article is called “Dynamic Technology Leadership – The Adaptive Role of the CTO” and is the feature article in the September-October 2012 edition of RTM (Volume 55, No. 5).

In essence we set out an alternative paradigm for CTO’s and Innovation Leaders in their quest to manage business critical discontinuities. We suggest that reliance on economic cycle, product / technology life-cycle, and business life-cycle models, for making strategic decisions is less useful than an understanding of what we have called “Technology Transition Points”.


“The Italian Job” …Goffin style

11 10 2012

Chris van der Hoven wrote:

We are very proud to report that Keith Goffin has been asked by the Italian National Agency for the Evaluation of Universities and Research Institutes (ANVAR) to join the panel of academics assessing the research output of Italian universities. This assessment, similar to the REF (Research Excellence Framework) currently running in the UK, is designed to increase both the quality and relevance of research. He will be assessing research papers on new product development and innovation.

Shanghai breakthrough – “Designed in China” will replace “Made in China”

11 10 2012

Keith Goffin wrote:

I have just got back from leading a 2-day seminar on “Customers’ Hidden Needs” in Shanghai. Had a group of about 20, including several international brands from the food, healthcare and high-tech industries. All were very interested in new methods to understand customer needs and all delegates perceived that “Made in China” (just manufacturing) was going to be replaced by “Designed in China”, with companies developing the skills to do in-depth market research on Asian customer requirements. Similar to South Korea, where I was in January, it looks like the interest in new methods of market research is booming.

Beyond the voice of the customer

21 08 2012

Chris van der Hoven wrote:

We are delighted that our collaboration with Copenhagen Business School (Dr. Claus Varnes) and Zeppelin University (Dr. Ursula Koners) has resulted in a publication in the July – August 2012 edition of Research Technology Management (RTM). It is a Feature Article on page 45 of the journal. RTM is the journal of the Industrial Research Institute in the US which has been in existence since 1938. It has over 200 members and is made up of large businesses with an interest in R&D, innovation and industrial marketing.
Our research explains the key elements of ethnographic market research. We make the case for the use of the approach in the face of stagnation in use of techniques for surfacing deep insights into customer needs. We also argue that alternative configurations are required to surface so-called “hidden needs”. The article title is “Beyond the Voice of the Customer: Ethnographic Market Research” by Goffin, Varnes, van der Hoven & Koners – in Volume 55, No.4 (July-August 2012). The journal library can be accessed via the RTM website.

Can “Breakout Nations” use ‘leapfrog’ innovations?

31 07 2012

Chris van der Hoven writes:

The UK government is debating whether speed, or access to broadband are more worthy uses of tax payers money. They compare connectivity speeds between the UK and Western Europe, but… Read the rest of this entry »