Plausible/Impossible: Value Your Constraints to Innovation

I keep six honest serving-men
(They taught me all I knew);
Their names are What and Why and When
And How and Where and Who.

- Rudyard Kipling

In the last article, I explored why noncustomers are the fountainhead of the plausible impossible. Yet we must navigate deeper. What makes great innovators great is their ability to connect insights hidden in plain sight. Steve Jobs described this process best when he famously said, innovation is just connecting the dots. Similarly, Richard Branson uses the mantra of “A-B-C-D” — Always Be Connecting the Dots.

(1) The dots they are speaking of — and somehow, no one ever asked — are: a) the fundamental elements of utility that buyers seek, and b) the fundamental elements of utility that sellers can provide. So how do we find the dots? Which dots are important and which ones are not? How do we connect the dots to reconstruct a market-creating value proposition?

(2) To cut to the chase, the systematic process of connecting the dots is broken down into three steps: identifying the fundamental elements of our noncustomer’s needs/desires (demand-side dots); breaking down the components of utility that can be offered by searching across the universe of possible solutions (supply-side dots); then connecting these dots to reconstruct a breakthrough new value proposition. Observe. Deconstruct. Reconstruct.

Demand-Side Dots

Intuitively, when we observe life — from a leaf in the wind to a car crash — we make sense by asking six questions: Who? What? Where? When? Why? How? 5Ws+1H. First defined by Aristotle in “Nicomachean Ethics,” the 5Ws+1H is a built-in mental framework that helps our minds overcome ambiguity, organize our observations and quickly get to understanding.

(3) As an example, if we were to look at the current student climate change protests happening worldwide, one would ask: Who are the protesters? Where do they protest? What do they want? When did this start? Why should I care? How did this all get organized? This moves us quickly from an amorphous and complicated issue to a complex one that can be fundamentally understood.

(4) The 5Ws+1H is where we organize input before categorization begins.

Most importantly, each of these “six honest friends,” as Kipling called them, create the anchor to our demand-side dots: the fundamental elements of utility buyers seek. When we focus on the 5Ws+1H of a buyer’s intent we are able to identify what is desirable at the most fundamental, often pre-cognitive, level before they fall into the well-worn categories of the past (see Weights and Measures). This provides the raw ingredients for us to work backward and reconstruct our offering across forms and functions to create the plausible impossible.

Why not just use the 5Ws+1H to understand our existing customers? Because most firms are already doing this, and as illustrated in the first article, we have wrung our customers dry of insights. Most importantly, through noncustomers, we are able to press pause on the co-dependent category-creating relationship with our customers. Noncustomers, as proven time and again, provide the ideal level of abstraction and perspective to illuminate the insights behind the impossible, while remaining entirely plausible. We are not abandoning our customers, but putting them on hold as we create a new value proposition.

Taking a step back is the first step forward. As Yaacov Trope argues, the psychological distance may be the single most important step you can take to improve thinking and decision making.

(5) The further we move from our own perspective, the wider the picture we are able to consider. And to this end, in our innovation work, we take a step back and to the side to observe, interview and live a-day-in-the-life of our noncustomers to understand how they make their base order decisions within and across the boundaries of 5Ws+1H.

Consider a young car mechanic, Joseph-Armand Bombardier, in 1930s Quebec. At the time the streets of Montreal were not cleared of snow, forcing drivers to abandon their cars for the winter. For a car mechanic, this was disastrous. So, we can speculate that Bombardier intuitively used the 5Ws+1H to ask: What did noncustomers want to do? Travel over distance at a reasonable speed. Why do they need an alternative to cars? The streets were covered in snow. Where do they want to do it? Anywhere. When do they want to do it? Winter. Who is doing this already? Slow-moving cross-country skiers.

Besides skiers, Bombardier could identify three alternative modes of transportation:

A motorboat
A military tank
A bicycle

How can Joseph-Armand meet the needs of noncustomers from these disparate forms of transportation? After a long workless winter in 1937, Bombardier created the world’s first snowmobile. The handlebars and seat from the bike, the metal treads from the tank, the skis from the skier, and the motor from the boat.

(6) This is the basis of our process: observe, deconstruct, reconstruct.

Supply-Side Dots

Taking the noncustomer's perspective and exploring the first principles of 5Ws+1H helps us create insights from the demand side of the equation. But what about the supply side? Even with the best noncustomer insights, if we don’t question the categories we’ve created as a business, we will continue to optimize the automobile — ignoring the boat and bicycle solutions — instead of inventing the snowmobile. Well in commerce we have a similar set of questions we ask to get to the fundamental elements of utility provided (supply-side dots). Where do we compete? What do we offer? How much do we offer? Who do we offer it to? Why do we offer it? When do we offer it? We call these the Six Paths Framework.

Industries (Where). Firms ask who do we compete against and the benchmark to competitors in the same industry and seek to be the best within it.

Strategic Groups (How Much). Within their industries, firms ask themselves what level of value do we provide for a given price (e.g., budget, economy, luxury) and seek to be the best within that strategic group.

Chain of Buyers (Who). They ask, who is our key customer, and then most businesses converge on a single buyer group. This is often either the purchaser (parent in the child medicine industry), the user (child) or the influencer (doctor).

Scope of Offering (What). Companies ask how do we maximize utility at that moment of customer interaction, while often ignoring the complementary products/services necessary to carry out the buyer’s intended task.

Functional/Emotional Orientation (Why). Based on their history with buyers, firms cluster around an offering that is either a functional or an emotional offering.

Time (When). Lastly, within their industries firms share a common timeframe in product lifecycles, buyer experience, and external threats.

Consider the Toyota Corolla, the most popular car on the planet. Industry: automobiles. Strategic Group: mid-range. Buyer Group: users. Scope: reliability. Functional/Emotional: functional. Time: annual. The more firms share these six first principles (“conventional wisdom”), the greater the competitive convergence.

Now that we have broken down our assumptions to fundamentals (our dots) on the demand and supply side of our relationship, how do we connect the right dots to reconstruct these insights into a breakthrough value proposition? Just as a builder needs scaffolding, our minds need support and constraint to construct a new value proposition. Without restrictions, our solutions turn to what has worked in the past.

(7) However, when constraints are applied, we are liberated to think expansively to connect the dots across conventions and expectations. Enter the Six Paths Framework.

(8) The Six Paths Framework is the interface where customer’s fundamental needs and desires are matched with the supplier's ability to meet these needs and desires. The latticework where we connect the dots.

I will delve into this tool in the next post, but briefly consider the experience we had applying the Six Paths Framework to a global hotel corporation in the early 2000s. Like many hotels, our client sold a version of their beds to consumers. But sales were lagging. Our team, a cross-section of the hotel’s management with our coaches, went through the average noncustomer’s experience purchasing a bed in locations across Europe. Using the Six Paths Framework to guide our observations we found that despite industry assumptions, the purchase of the bed wasn’t the greatest hurdle. It was an old bed’s disposal. As a result, we looked across industries to see where noncustomers turned to for seamless delivery, use and replacement of a good: the automobile lease.

So our bed would not be purchased but leased (Path 1 — see above). An agreement with a global logistics firm was made to deliver the new bed and remove the buyer’s old one (Paths 4&6). If buyers stayed at the hotel, enjoyed the bed and purchased it, their night would be free (Paths 2&3). Every year lessees would receive new linens as an emotional reminder that the hotel cares for them (Path 5). At the conclusion of the hotel bed project, one team member asked, “Why didn’t anyone think of this before?” This question is the hallmark of every breakthrough strategy we’ve created. Changes in leadership led the hotel chain to scrap the launch of the program, but today many of the elements of this strategy have driven the growth of direct to consumer giants like Caspar, Warby Parker, and Dollar Shave Club. More on this often misunderstood and forever misused framework in the next post.

© 2020 JASON HUNTER. F&W STRATEGY | INNOVATION.

COMING UP: SIX PATHS REVISITED | OCEANS IN PRACTICE | THE DESK IS DANGEROUS

PAST: ORIGINS | COST OF CUSTOMERS | WEIGHTS, AND MEASURES | POWER OF NONCUSTOMERS

(1) For an entertaining introduction to connecting the dots see David Brier’s video, What is Innovation? https://vimeo.com/77911159

(2) Connecting dots are a well worn, but very useful metaphor, as we begin to build up to discussing the Six Paths Framework in the next article.

(3) Aristotle, Nicomachean Ethics (Indianapolis: Hackett Publishing, 1999).

(4) Neurobiologist increasingly believes that we break observations into six different work streams before cognition kicks in. For example, when we look at an object, light bounces off the subject and enters our eyes as photons. These electrical signals engage our visual system (retinas, optic nerves, visual cortex, and about 50 billion neurons) so that our brain can make sense of this visual input. Right away, these signals are filtered and begin to pass through each of the six visual pathways before we mend them back together to create an understanding of the whole picture. How are these six neural pathways organized? They are organized around a: “Who or What?” pathway. “Where?” pathway “How much?” pathway. “When?” pathway. “How?” pathway. “Why?” pathway. 5Ws+1H. See: Larry Squire, Darwin Berg, et al, Fundamental Neuroscience (Cambridge, MA: Academic Press, 2012). Dan Roam, Show and Tell: How Everybody Can Make Extraordinary Presentations (New York: Portfolio/Penguin, 2016).

(5) Noncustomers are at the right level of construal in value proposition design as they are at a distance — temporal, spacial, social — that allows us to think slower, wider, deeper and more creatively, while still being rooted in reality. As psychologist Maria Konnikova notes: “[Distance] can come in many forms: temporal, or distance in time (both future and past); spatial, or distance in space (how physically close or far you are from something); social, or distance between people (how someone else sees it); and hypothetical, or distance from reality (how things might have happened). But whatever the form, all of these distances have something in common: they all require you to transcend the immediate moment in your mind. They all require you to take a step back.” Maria Konnikova, Mastermind: How to Think Like Sherlock Holmes (New York: Penguin Group, 2013). For a great introduction to construal level theory see, Rebecca Hamilton. “Bridging Psychological Distance” Harvard Business Review (March 2015) or Douglas Hofstadter and Emmanuel Sander, Surfaces and Essences: Analogy as the Fuel and Fire of Thinking (New York: Basic Books, 2013).

(6) The story inspired by, Frans Osinga, Science, Strategy and War: The Strategic Theory of John Boyd (London: Taylor and Francis Books, 2018).

(7) A lot of information reaches the eye, but up to 90% of this data is lost by the time it reaches the brain. Scientists believe that we make up for the “lost bit” with past experiences. As the saying goes, “The mind is a wonderful servant but a terrible master.” See: Carlos González-García, Matthew W Flounders, Raymond Chang, Alexis T Baria, Biyu J He. “Content-specific activity in frontoparietal and default-mode networks during prior-guided visual perception.” eLife, (July 21, 2018); George Musser “Time on the Brain: How You Are Always Living In The Past, and Other Quirks of Perception,” Scientific American, (September 2011); Richard Gregory, “Brainy Mind,” British Medical Journal №317 (1998):1693–5.

(8) W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant; Expanded edition (Boston: Harvard Business School Press, 2015).

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Jason writes about strategy and innovation when he is not working with companies and governments to create breakthrough offerings.

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Jason Hunter

Jason Hunter

Jason writes about strategy and innovation when he is not working with companies and governments to create breakthrough offerings.

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