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Ever since the publication, nearly two decades ago, of Peter Senge’s monumental bestseller The Fifth Discipline, we’ve been in the age of the “learning organization.” Executives have come to understand that for their companies to stay ahead of the competition, their people, at every level, have to learn more (and more quickly) than the competition: new skills, new takes on emerging technologies, new ways to do old things, from manufacturing to marketing to R&D. Gary Hamel, the influential business strategist, likes to say that one of the most urgent questions facing leaders (and thus their companies) is, “Are you learning as fast as the world is changing?”

It’s hard to argue with this love of learning. But one thing I’ve learned over the last few years, as I’ve traveled the world in search of organizations unleashing big change in difficult circumstances, is that the most determined innovators — the organizations with the most original ideas about how to compete and win — aren’t just committed to learning. They are just as committed to teaching. They understand that the only sustainable form of market leadership is thought leadership. And if, as Aristotle famously said, “teaching is the highest form of understanding,” then they also understand that the most powerful way to demonstrate your position as a thought leader is to teach other organizations what you know — whether they are customers, suppliers, or even direct competitors.
Think of it as the rise of the teaching organization. One of the most compelling examples of this phenomenon is a health-care provider in Seattle called Virginia Mason, a 90-year-old hospital system with 400 doctors and nearly 5,000 employees. Dr. Gary Kaplan, the organization’s CEO, is something of a legend in healthcare circles for the turnaround he’s led since taking charge in February 2000. At the time, Virginia Mason was struggling with deteriorating finances, inefficient processes, and uneven quality. Kaplan and his colleagues became committed students of the Toyota Production System, the blend of management techniques that fueled the rise of the most powerful car company in the world. The CEO led frequent pilgrimages to Japan, adopted the strategies, practices, and management language of its Japanese mentor, and developed a whole new way of running a hospital that it calls the Virginia Mason Production System — a system that has delivered staggering improvements.

In other words, Virginia Mason became the ultimate learning organization. Now it aspires to become the ultimate teaching organization. A year ago, Kaplan created the Virginia Mason Institute and opened the doors of his hospital to the outside word. The Institute leads tours of the facilities and explains how they work, teaches classes in various management techniques, and otherwise shares what Virginia Mason knows with individual executives and entire healthcare systems. The student has become the teacher.

Why bother? “First and foremost,” Kaplan told me, “this is about our vision to be the quality leader in our field and to help transform the field as a whole. Part of our mission as a company is to help improve our industry. But the more we educate, the faster we move as well. This will spur us on, push us to keep getting better, and people will chase our taillights. Our credibility as a company is dependent on our ability to deliver results. By teaching others what we’ve learned, it forces us to keep learning.”

You don’t have to be a huge organization with a full-fledged institute to teach other companies what you know. The founders of 37signals, a fast-growing software company about which I’ve written in the past, have developed a truly original set of ideas about strategy, marketing, and the organization of work — ideas that have fueled their tremendous success. But they don’t keep those ideas to themselves. Through a series of conferences (called Seed), a fabulously instructive blog (called Signal vs. Noise), and even a free e-book on the Web (called “Getting Real“), Jason Fried and his colleagues share their ideas with anyone who wants to learn from them.

Their approach, they like to say, is not to out-market the competition, but to out-teach the competition. Why? Because teaching creates a different kind of presence in the marketplace. It creates a higher sense of loyalty among those who learn from you. And it helps the company create not just customers for its products but an audience for its ideas — in the same way that famous chefs are willing to share their recipes so as to build a following for their overall approach to cooking.

So by all means, stay focused as leaders on what your companies need to learn. But don’t miss the opportunity to share what you already know. The most idea-driven organizations have a chance to become the best teaching organizations — and we never forget our best teachers. 

Source Harvard Business Review

innovationOrganisational CultureKnowledgeKnowledge Management
Managers are bombarded with an almost constant stream of data every day. According to David Derbyshire, “Scientists have worked out exactly how much data is sent to a typical person in the course of a year – the equivalent of every person in the world reading 174 newspapers every single day”.

This overload of data is making knowledge management increasingly more important. Three key reasons why actively managing knowledge is important to a company’s success are: 1.) Facilitates decision-making capabilities, 2.) Builds learning organizations by making learning routine, and, 3.) Stimulates cultural change and innovation.
Facilitates Decision-Making Capabilities
Data can offer managers a wealth of information but processing overwhelming amounts can get in the way of achieving high-quality decisions. GE’s Corporate Executive Council (CEC) is an example of how one company put a knowledge management system in place to help executives cut through the noise, share information, and improve their decision-making. The CEC is composed of the heads of GE’s fourteen major businesses and the two-day sessions are forums for sharing best practices, accelerating progress, and discussing successes, failures, and experiences. While information overload or needing knowledge from people in other parts of the company for decision-making can handicap managers, putting in place knowledge management systems can facilitate better, more informed decisions.
Builds Learning Organizations by Making Learning Routine
In his book, Learning in Action: A Guide to Putting the Learning Organization to Work, author David Garvin (2000) notes, “To move ahead, one must often first look behind”. The U.S. Army’s After Action Reviews (AARs) are an example of a knowledge management system that has helped build the Army into a learning organization by making learning routine. This has created a culture where everyone continuously assesses themselves, their units, and their organization, looking for ways to improve. After every important activity or event, Army teams review assignments, identify successes and failures, and seek ways to perform better the next time. This approach to capturing learning from experience builds knowledge that can then be used to streamline operations and improve processes.
Stimulates Cultural Change and Innovation
Actively managing organizational knowledge can also stimulate cultural change and innovation by encouraging the free flow of ideas. For example, GE’s Change Acceleration Process (CAP) program includes management development, business-unit leadership, and focused workshops. CAP was created to not only “convey the latest knowledge to up-and-coming managers” but also “open up dialogue, instill corporate values, and stimulate cultural change”. In this complex, global business environment, these types of knowledge management programs can help managers embrace change and encourage ideas and insight, which often lead to innovation, even for local mom and pop business owners.
Bottom Line
Fortune 500 companies lose roughly “$31.5 billion a year by failing to share knowledge”, a very scary figure in this global economy filled with turbulence and change. Actively managing knowledge can help companies increase their chances of success by facilitating decision-making, building learning environments by making learning routine, and stimulating cultural change and innovation. By proactively implementing knowledge management systems, companies can re-write the old saying, “Change is inevitable, growth is optional” to “Change is inevitable, growth is intentional.”


innovationcompany cultureKnowledgeKnowledge Management

offers core and job-specific courses to all its employees. Courses cover an array of topics from personal finances to management, to emotional intelligence.
“Google EDU is formalizing learning at the company in an entirely new way, relying on data analytics and other measures to ensure it is teaching employees what they need to know to keep profits humming,” wrote Joseph Walker in The Wall Street Journal.


At Hyatt — a dual member of Fortune’s 100 Best Places to Work and top 1000 — empathic listening is at the heart of the learning culture.  They created the “Changing the Conversation” training initiative to offer more every day opportunities for professional growth.  


Xerox: Xerox has ranked among the top 10 Most Admired Knowledge Enterprises "Communities of practice are fast becoming the most effective way to connect people who need knowledge with those who have it. They cultivate new and innovative ideas to guide important business decisions.”


Whole Foods puts its development dollars into building its leadership pipeline. Its Academy for Conscious Leadership is a four-day immersion course offering interactive presentations by both internal and external thought leaders.


IBM: Competitiveness, profitability and intellectual leadership are the keywords to explain the introduction of knowledge management at IBM. The focus IBM has placed on knowledge management stems from the growing requirements of the company’s services. Because the ability to learn faster than the competition is today’s only sustainable competitive advantage. 
innovationcompany cultureKnowledge

For too long organizations have been paying lip service to customer centricity. Everyone knows it. But the old guard is getting old. Customers are no longer making every purchase decision merely on cost or ease of access, though many still are. Increasingly, purchase decisions are being made on whether a company is socially responsible, for the reputation of how they treat their workers and for the experiences they deliver.

The time has come for radical customer centricity. It is not only something that will enable companies to remain competitive, it is now required for those that want to remain relevant. Radical customer centricity will require an investment in the #ReOrg of company governance, structure and operational processes. As I’ve previously written, the #NewWayToWork requires new mindsets, methods and measures in order to not only survive, but to thrive. This sort of transformation requires vision and courage. The sort of courage Ford showed by investing in transforming itself prior to the economic downturn. The sort of vision and courage IBM has shown over the last several years in re-imagining and restructuring its entire business to be Future Strong. That sort of long term thinking is still missing across large swaths of our economy. Which is actually a great thing, because it represents an extraordinary, once-in-a-business-cycle opportunity.

As we begin to more closely understand the market dynamics of a connected society and its impact on the people within it, the most drastic shift comes in how we perceive, create and measure value. In this emergent, “collaborative economy” (or whatever you want to call it), the values of the company and the way it values people are two of the greatest competitive differentiators. Today we have new mechanisms for making visible previously intangible value on the balance sheets. As I posted in The Engagement Curve, companies should be looking beyond financial returns, to understand the additional value they receive from customer labor, data and the legends people share about their products and services.

It is my belief that the first companies to properly execute on this strategic #Reorg of their companies to embrace radical customer centricity will win not only in the short term, but over the long term. We are already seeing that a company which has real empathy for stakeholders, that designs great experiences and consistently delivers them, creates a level of customer loyalty that was previously unimaginable.

Why? Because the switching cost of what I call REAL Relationships are exponentially higher than transactional ones. “REAL” not only means genuine, but stands for Reciprocal, Empathetic, Authentic and Long lasting.

A zeitgeist moment for Customer Experience Design

The time has long past for CX Design to be the primary mechanism through which we understand, design and optimize a series of signature moments for marketing engagement to create a sense of REAL Relationships across an omni-channel customer journey. To transcend the idea of feeling successful after creating a sale through interruptive advertising techniques. Do you know anyone who enjoys being interrupted? Of course, we still do it, we have to – after all spam is still here because it works, at a sufficient, justifiable cost scale whereas it still generates reasonable or sometime exponential profit. But that doesn’t make it right, nor does it mean past success will continue to equal future success.

CX has actually been around a long time, decades it seems. It existed long before I thought I had first discovered it when I was Chief of eBusiness at the U.S. Mint. Back then, I called it the customer experience lifecycle and it was predicated on insights I learned from Patty Seybold, Joseph Pine and being a regular reader of Fast Company magazine. So when I developed the engagement matrix in 2001 to support a broader framework beyond what we now call journey mapping, I had presumed it would only be a matter of years before someone enabled it via an integrated marketing platform. It had become pretty clear then that every organization needed tools to establish the context for delivering the right content at the right time to remove friction from the customer experience. But over a decade later, I continued to be disappointed.

At least I was – until May of this year when I saw the future the product team behind IBM Journey Designer had envisioned and seemingly built. Once again, I had hope that what we finally needed to do the right things in the right ways was finally in reach. Olivier Blanchard wrote the following at its public debut during IBM Amplify in May of 2015, in Did IBM Just Build the Marketing Management Solution We Have All Dreamed about?  

For myself personally, with the IBM Journey Designer I saw a new platform that would enable a truly holistic business strategy—a mindset and an approach for integrating all channels of customer communications, all touchpoints, managing an intentionally designed and optimized customer experience to differentiate the brand value in the mind and heart of the customer. To do that using knowledge, empathy and an emphasis on creating shared value. Wow. Finally.

This is why I believe more and more companies are already embracing the idea of radical customer centricity without actually calling it that. Not only do we have new products to make the process simpler like Journey Designer and We also have books like Brian Solis’ X – The Experience When Business Meets Design. Right now we are experiencing a zeitgeist moment. More and more organizations are applying design thinking to all aspects of their business. We have more companies investing more dollars in post-sales communications with customers than ever before.

Certainly, as we have continuously advanced in my Blab series #CXDNow, the time for Customer Experience Design is now! So get to it. Figure out what radical customer centricity means for you, embrace greater empathy, intentionally design your customer’s journey and find the way to continuously improve it through a never ending customer feedback loop.

I hope you are able to join us on this journey. Not only for your benefit, but for the benefit of all your stakeholders and the market at large.

Meet IBM Journey Designer: Design and refine your marketing across channels to give your customers the experiences they deserve at no cost. This IBM Marketing Cloud innovation enables teams to collaboratively visualize journeys, set shared marketing goals, and create and refine tailored experiences for dozens of priority segments. Sign up today at

Also follow #NewWayToEngage on Twitter to hear more from Chris Heuer @chrisheuer and other influencers as we tackle the future of commerce together.


customer experiencecustomer serviceconsumer behaviour

Today's customer is growing accustomed to researching and purchasing across multiple channels, even for a single transaction. The best omnichannel marketers understand this, and it shows in their advertising, messaging, and customer interactions. However, too many businesses have taken an inside-out approach, focusing on individual channels at the expense of a consistent experience across channels. 

Old habits die hard, but die they must if marketers are to alter their strategies and place the customer at the fore.

“Customer centricity has become an imperative,” says Chip Overstreet, SVP of marketing at cross-channel personalization provider MyBuys. Here, Overstreet, and other experts offer six questions marketers can ask themselves to determine if their business is on track to being customer centric.

Are customers engaged?

“Are people engaging with your messaging? Have they responded to whatever it is that you're putting in front of them? Are they moving in your direction as a vendor?” asks Mike Kisseberth, chief revenue officer at Purch, the digital publishing company formerly known as Tech Media Network.

Nothing is more telling of a company's marketing than the engagement rates on its content. Low engagement rates such as a lack of comments or shares could signify that customers and prospects didn't see the content or did see it, but didn't care. Marketers lose in either case.

Are you listening?

Today's customers demand much from the businesses they engage with, but they're also extremely open about their preferences. Beyond the heaps of volunteered data that companies such as Amazon have optimized their business around, customers are quite clear about how they wish to interact with a brand. Woe is the marketer who ignores this input. “Today's successful marketers are the ones who listen to their customer' implicit and explicit preferences, and communicate based on those cues,” explains Dave Walters, product evangelist at automation and email marketing company Silverpop.

Are you consistent?

Perhaps the most discerning quality in true omnichannel marketing is consistency. Customers don't distinguish between the different divisions or operating groups within a company. Part of the omnichannel promise is making sure customers receive messaging that is consistent across channels and personalized. “You have to be consistent, but there's a difference between having a consistent message and having a consistent personalized message,” MyBuys' Overstreet says. “If you're just repeating the same messages through social channels it's not social, it's spam. There's nothing social or consistent about that.”

Are you responsive?

People often engage with brand's messaging only to find the brand completely unresponsive. Ignoring customers has always been a dangerous practice, but it's an easy habit to fall into given the sometimes negative nature of feedback online. Though temptation may be strong, marketers must remain responsive. In today's transparent digital world, silence can be even more damaging than negative feedback. “You're never excited about getting a negative response, but response is always valuable. It gives you an indication of how people feel about your product or service,” Purch's Kisseberth says. “Any interaction is positive in that regard.”

Do you recognize your customers?

Given marketer's access to data, there's little to excuse not knowing a customer. However, even if businesses understand a customer's behavior and habits on one device, the challenge lies in recognizing that same customer on another device. “Mobile has changed shoppers' behavior drastically. If you can't recognize customers when they reach out on mobile, you can't have a customer-centric view,” Overstreet says.

Are you fostering relationships?

Simply closing a sale and moving on to the next lead is no longer viable in today's environment. Consumers are making big buys in half the time and marketers who aren't working to maintain relationships with their customers risk being forgotten when the sales cycle begins again. Marketers must strive to foster a healthy relationship with customers, old and new. “All too often, customers are forgotten after a first purchase, but to be successful--and drive great revenue--marketers must engage and reward their most loyal [customers],” Silverpop's Walters says. “It's also important to remember that today's customer relationships cannot be siloed. A customer's actions on mobile, email, the Web, brick-and-mortar stores, etc., must be housed in one marketing database.”


customer experiencecustomer servicestrategyconsumer behaviour

Large companies today spend billions to manage their public image. And in many industries no part of that image is more important than how people think a company's customer service is. Customer Service is becoming a lot more than an ‘industry buzzword' as large companies who treat their customers poorly are starting to lose customers right and left.

Customers want good customer service, but if companies can just hire good PR people to cover problems up, how do we, as customers, ever demand that companies improve. We thought that a good start would be to close the information gap, so that customers know who is good and who isn't. With that in mind, we have sifted through customer surveys and studies as well as some real-life experiences of customers, to pinpoint and ultimately learn from, the 10 worst companies for customer service. 

1. AOL - Playing Dirty, Tricking Customers?
An overwhelming majority of netizens have had bad experiences with AOL - especially while closing their accounts. Listen to Vincent Ferrari's conversation with AOL CSR John here.

About Ferrari's experience, blogger Rich Brooks says: "After 15 minutes he finally got through to a human being. The call resulted in something that's a cross between Dante's 9th ring of hell and Orwell's 1984. The king from Monty Python's Holy Grail had an easier time explaining to the palace guards to keep his son locked in his room than Ferrari had explaining that he just wanted to cancel the account."

Dan Spencer says, "I will never forget when I called to cancel my family's account with AOL after my dad passed away very suddenly. This was about six months after the death. AOL said because the account was in his name they needed to talk to him to cancel it. We explained how difficult that may be considering the circumstance and they then had the nerve to tell my family they will not cancel it with out proper identification of the death such as a death certificate. They then even said that they billed my father for the six months each month. We had moved and never recieved these so we told them if they get the money from him to call us ASAP so we can witness a miracle. Even with all the information concerning the security provided with them they refused to cancel it."

When a company believes it can retain customers by antagonizing them, something is very wrong with their customer service policy. Also, AOL is not above tricking customers into buying stuff online that they were only browsing.

2. BEST BUY - Worst customer service?


Though it faced serious competition from Wal-Mart, Best Buy beat its competitors to bag the position for worst customer service in the retail sector. Bill says, "Best Buy and AOL seem to share that short-term thinking, screw the customer, anti-social mindset."

A whole lot of customers are unhappy with the company, mainly because of the customer service policies. When your insistence for selling protection plans drives away customers, you need to rethink your policies, buddy!

And what's with all the sour faces, guys? Do they treat you so bad at best buy? Read this customer's experience with Sour Face Jim and Handshake John at Best Buy.

3. LASTMINUTE.COM - Customer who?


In the online service provider category, the winner undoubtedly is This company has been featured on watchdog for fraudulent practices, yet continues to survive and harass customers who are not aware of its history. Tom Wright says, "A series of phone calls and broken promises later - lastminute finally agreed that they had made a mistake by not sending through the booking - and offered to refund me……….HALF the purchase price!!"

Dave had a similar experience with the company, that he has described on his blog. Another customer, Claire says, "If you have a problem no one listens, they honestly do not care and have no idea what customer service means. The so called manager of this company laughed at me with my complaint and when I I asked for his company address to write a complaint he answered I don't need to give you that!!? and refused to do so."

4. HOME DEPOT - Who cares about your home? Not us!


Lowes, though having its fair share of disgruntled customers, is not the topper for bad customer service - it is beaten by Home Depot. When this customer wanted to complain to the Home Depot manager about a rude employee, the manager seemed to be worse! "After 10 or so minutes I asked where the manager was, the person behind the desk called again. At that time the so called manager Anthony called back, did not bother to come to the service desk just called and said, "What does the customer want"."

This Business Week article elaborates "The University of Michigan's annual American Customer Satisfaction index shows Home Depot slipped to dead last among major U.S. retailers, 11 points behind Lowe's."

Americans ranked Home Depot's customer service as dead last, according to Steven Silvers. Home depot customers complain about the worst service they received from the company.

5. AT&T - The Next Dinosaur?


In the article entitled ‘Should you remain an AT&T customer?' Liz P Weston states, "It's not as if AT&T horror stories are anything new. Those old enough to remember Lily Tomlin's Ernestine the Operator can recite her mantra: "We don't care. We don't have to. We're the phone company!" With that attitude the company may soon become the "ex" phone company! Weston observes, "Of the six largest cell-phone carriers, AT&T Wireless generated the most complaints overall and the most complaints per subscriber last year, according to FCC records obtained by Consumers Union."

6. SBC - $200 to cancel the service!!!


Cliff Edwards writes about his experience with SBC customer service, "Another eight days later, still no faster speed. In fact, the upstream speed appeared to have slowed down! I called customer service again, but was told the speed had been upgraded. My testing through told me otherwise. The new suggestion: Wait a few days more, then call back."

In "Stay away from SBC DSL !!" A Anand says, "My basic complaint is that AT&T Yahoo charged me 350 dollars unfairly. They also have a very unfriendly attitude, stay away from them!"

7. DAY'S INN- We're racists AND We break promises


While this customer was told to "go back to China," Stan Dulkiewicz of Rochester was denied the one night free stay that he was entitled to.

8. ALBERTSON'S - No value for customer privacy


"Albertsons' pharmacy customers receive direct mail and phone solicitations derived from confidential customer medical information provided to the pharmacy solely to fill prescriptions. The solicitations look like they are from the patient's concerned local pharmacist and remind the customer to renew a prescription or consider an alternative medication. But they are actually generated for pharmaceutical company's sales purposes by a specially-designed marketing database, sold by Albertsons."

9. MCIMETRO ACCESS (Formerly known as MCI Communications) - Billing for eternity …


The company violated state service quality rules 850 times, including failing to:
• Inform customers when the new service will be provided
• Investigate customer complaints promptly
• Repair service interruptions within 48 hours

The most frequent violation by the company involved the continued billing of customers who had cancelled the phone service. Here are some MCI customer complaints.

10. CIRCUIT CITY - We have your money - now get lost!


One example of the many disgruntled Circuit City customers - Though it was acknowledged that the laptop purchased by Matt Southerton was defective and no other pieces were in stock, the customer service rep refusing to refund his money.

And if you're thinking about purchasing their extended warranties, stop for a moment and read about John Alexander's interactions with the company when he tried to (and deserved to) get his TV replaced.

Linda Meister has wasted money on extended warranties that are not worth the paper they are printed on. According to Consumer Affairs, "Circuit City pushes a lot of electronics out the door — and they're also pretty good at loading up the customer with extended warranties and other add-ons, many of which turn out to be a big disappointment if they're ever needed."

* The University of Michigan compiles the ACSI in numerous product categories by randomly calling U.S. residents and surveying their buying habits.


customer experiencecustomer servicerankingsglobal trends
Companies hoping to drive growth through business model innovation face a number of critical questions: How broad should the scope of the effort be? What is the appropriate level of risk to take? Is it a onetime exercise, or does it call for an ongoing capability? How can a company discern which new business model is the most attractive? And what differentiates those companies able to transform their business models from those that might run a pilot but fail to fundamentally change the company’s trajectory?
To answer those questions, it is important to realize that not all efforts toward business model innovation are alike. Understanding four distinct approaches can help executives make effective choices in designing the path to growth.
Four Approaches to Business Model Innovation:
To understand which business model innovation approach fits best for any individual company, it is critical to understand both impetus and focus.
Impetus: Is the company defending against an external threat, such as commoditization, new regulation, or an economic downturn—or is it proactively disrupting the status quo?
Focus: What is the most attractive area of opportunity—does it reside in the core business or in adjacent businesses or markets?
These two factors define a matrix of four approaches to business model innovation. (See the exhibit below.) Within each of the four approaches, companies will employ different tactics to successfully rebuild their models and make different choices.
  • The reinventor approach is deployed in light of a fundamental industry challenge, such as commoditization or new regulation, in which a business model is deteriorating slowly and growth prospects are uncertain. In this situation, the company must reinvent its customer-value proposition and realign its operations to profitably deliver on the new superior offering.
  • The adapter approach is used when the current core business, even if reinvented, is unlikely to combat fundamental disruption. Adapters explore adjacent businesses or markets, in some cases exiting their core business entirely. Adapters must build an innovation engine to persistently drive experimentation to find a successful “new core” space with the right business model.
  • The maverick approach deploys business model innovation to scale up a potentially more successful core business. Mavericks—which can be either startups or insurgent established companies—employ their core advantage to revolutionize their industry and set new standards. This requires an ability to continually evolve the competitive edge or advantage of the business to drive growth.
  • The adventurer approach aggressively expands the footprint of a business by exploring or venturing into new or adjacent territories. This approach requires an understanding of the company’s competitive advantage and placing careful bets on novel applications of that advantage in order to succeed in new markets.

business designtipsstrategyBusiness Model Innovation
It’s worth comparing the innovation models of each to find out. 

1. Samsung
Samsung originates in a highly deferential culture and has built its innovation model around five elements, the first of which allows them to redefine hierarchy way from traditional status:
  • Developing a creative elite within the company based on innovation training
  • Pursuing and circumventing patents of competitors
  • Consistent, replicable company-wide innovation methodology
  • Relying on external expertise for fundamental breakthrough science
  • A conglomerate approach
2. Apple

Apple’s innovation strategy had changed the way we all think about the post-industrial enterprise. Apple’s platform strategy goes back as far as the first iTunes platform, which integrated external content with an Apple product (the Nano).

It evolved into the apps developer community and Apps Store, as Apple miraculously ramped up a developer community of hundreds of thousands in the space of two years.
At the same time, as reader Dave Nelson points out, Apple opted for extensive outsourcing and in so doing showed competitors the way – there was no need to build or invent, just go and buy Apple-like parts.
In the meantime Apple has been castigated for not repeating its disruptive success with the iPhone, when in fact a platform and ecosystem model is both a huge risk and a game changer that can yield cash for a long time. How ironic that Apple is under fire only five years after inventing it.
So what are the components of the Apple innovation model?
  • The platform and the significant investment in seamless integration of developer and content provider contributions, user access and friction-free commerce. That platform strategy and execution still does not get the credit it deserves
  • Design, as we all know. In smartphones the iPhone redefined the UI
  • The competitive internal market as teams compete against each other on select projects
  • Wearables and the disaggregation of the smartphone, presumably looking for new ways to exploit the platform and ecosystem
  • Supply chain management
  • Radical adjacencies such as retailing and indeed mobile and now watches
  • Control of all customer experience
3. Google
Google is usually associated with a fairly loose innovation model -the 20% free time its engineers can claim but in fact its innovations are systematic in the infrastructure. This is a comment left by Goolge here on ReThinking Innovation:
We are constantly innovating, figuring out new more efficient ways to remove heat from machines while reducing pollution. We publish our findings, after they have been vetted. After a few years, our designs start showing up in other companies’ datacenters. We only waste 7-8% of our power on overhead. The norm *used* to be 50-100%.
YouTube was converted to use Google technology. It would not be what it is without Google’s expertise in networking and distributed computing. Android was barely more than an idea when Google merged with it. Google made it what it is.
So there is a strong line of continuous improvement in Google’s infrastructure allied to its larger, better known innovations like driverless cars. Google also works in a lot of adjacencies, going from search and advertising to enterprise apps, to mobile computing, to devices and soon to deliveries.
Advertising appears to give coherence to this but I doubt it does in reality. Google clearly needs to reinvent itself to reduce its advertising dependency. For example it appears unlikely to dominate the domestic TV screen as it has computing, so it will not be as well positioned to offer integrated campaigns. It has through Android and its own apps business, been able to replicate Apple’s platform and ecosystem strategy. Arguably it already had a model of that kind with search and SEO.
So its model?
  • It is platform and ecosystem-based in its customer facing innovations
  • Continuous improvement in infrastructure
  • Radical adjacencies to become more integrated (deliveries) and to look for a new disruption (Glass, driverless cars)
  • Device innovations, which are proving difficult to generate along with supply chains that it lacks experience of
  • Increasingly it is becoming design-centric
  • Bench-time – a factor most companies now deprive their engineers of
These models might be about to change. This is what reader Dave Nelson says of the three companies, looking to the future.
“In the future, I think you will see more unified manufacturing where a company does the hardware and software. Apple thought it could design hardware and software in house and use standard off the shelf parts but that leads to copy cats because parts are parts. Google thought it could outsource nearly the entire product solely for the search revenue but is now at risk. Samsung did a lot of the hardware and received a huge freebie from Google. All three are now looking at doing more of the product in-house.”

rankingsconsumer brandsglobal trendsBusiness Model Innovation

Business strategy may not be a science, but using the right method with the right materials in the right place at the right time can create explosive results. We've gathered some examples of the most successful business models that have gone on to make lasting impacts on industry, consumers and the world at large.

10) Name your price:  

Vendors bid to meet the prices customers set for hotel stays and air tickets.

9) Offer Aggregation:


eBay has made offer aggregation and price comparisons a major part of its online auctions and buy-it-now sales.

 ​8) One day One deal:


Woot/ LivingSocial/ Moolala
Providing discounts on meals, products and services with local merchants.

7) Just in time:

The JIT method combined with Dell's direct-to-consumer process made for a dynamite business model.

6) Growth first: 

Amazon has combined regular and offer-aggregate sales into its pricing for every product.

5) The modern franchise:  

A business model that has inspired enough imitators to launch the fast-food industry.

4)  Software first:  

The company got a head start by developing the operating system for IBM's personal computer in 1981.

3)  Lifestyle takeover: 

& Apple
While Apple and Google may appear at first to work in very different ways they share one pioneering interest: you

2) The everything store: 

Walton saw that general stores were turning a good profit, but he found a way to perfect the business model.

1) The P2P Revolution:  

Kickstarter/ Paypal/ Craigslist,
The newest and most fascinating business model of all is the personal, customizable, one-on-one transactions. 


innovationrankingstipsBusiness Model Innovation

Design is as old as humanity itself. In fact, there’s increasing evidence that it’s even older. Think Australopithecus with an iPhone.

Ok, not an iPhone but a stone purposefully smashed with other stones to create a sharp edge (an iStone, if you will), and maybe not Australopithecus, depending on which school of pre-human taxonomy you prefer. But just this year, scientists working in Kenya announced the 2012 discovery of the oldest known purpose-built stone tools, which date back as many as 3.3 million years, well before Homo Sapiens came into existence. Since then, the notion of design has evolved, even if its most advanced forms have not quite yet surfaced here in Lebanon.

What is design? 

Based on numerous conversations had for this special report, which ranged from the specific to a level of abstraction that still somewhat boggle our minds, the most succinct definition of design seems to be ‘creativity with a purpose’. The purpose can be as mundane as getting food into our mouths or as corporate as creating a sense of brand loyalty among consumers by designing a friendly, hassle-free customer experience. Design was once the sole domain of the person creating an object, be it a blacksmith, cobbler or carpenter. Today, however, it has become a craft unto its own. And it’s just as important for selling things as it is for as it is for creating them.

Giulio Vinaccia, an Italian designer, working with the UN on a new design-oriented program in Lebanon says product designers today are being brought into the process of creating an item at a far earlier stage than before. Previously they were seen as “tailors,” he says, who were there to merely make something look nice. “Twenty years ago I received a brief of 20 pages to make a glass. The company said, ‘It’s a glass for red wine and this kind of glass needs to have the mouth very open to intake oxygen’ and we were only the ‘tailor’ to design the correct shape.” Now the same company will write to my office and say ‘Guilio, we’re not selling glasses, what should we do?’” Product designers are now being brought in earlier in the commodity creation life cycle, not only to make the creation look nice, but also to help give it a sexy story to make sure it sells. Outside the manufacturing plant, companies need slick websites and the bigger ones hire ad agencies and marketing firms, all of which employ legions of designers. There are designers in just about every field, and even those who may not call themselves designers – like educators and magazine writers – could be considered among the ilk.

The ‘Creative Economy’

Because there seems to be a designer lurking in every office closet (or sitting next to you at the coffee shop and working remotely), it is difficult to put a figure on how much the industry as a whole is worth. They’re big players in the so-called “Creative Economy”, a sector which does not yet have a universally accepted definition. The UN Industrial Development Organization cites from the United Nations Conference on Trade and Development (UNCTAD) “Creative Economy Report 2010” that it contributes nearly 5 percent to Lebanon’s economy and accounts for over 4 percent of employment. The UN heaped praise on the state of creativity in this country, commenting on its website that “The strength and dynamism of cultural and creative industries in Lebanon are rooted in multifaceted cultural influences, deep-rooted private initiatives and the country’s privileged geographical location. Beirut, for instance, has been regaining and consolidating its role as a regional hub in design, advertising, architecture, fashion, gastronomy and publishing — even if the related value chains are often not completely covered and if some important linkages (such as collaborative work and initiatives, investments, etc.) are still weak.” Despite Lebanon’s reputation for innovation and creativity, design in its newest incarnation – as an inventive solution provider – has not taken off here. But the evangelists have arrived. 

“New” design 

Since the 1960s, there’s been a developing notion that designers simply think differently than, say, bankers or dockworkers. Around 15 years ago, a new industry was born: designers became problem-solving consultants. They began to think up creative ways to tackle social problems such as homelessness, offer government tips on how to more easily interact with and court the business world with a customer-centric sales pitch. Call it what you will – service design, experience design, strategic design, design thinking – what’s on offer is all pretty much the same. Designers use an innovative method when problem solving which can help a company’s bottom line, an approach which these “new” consultants claim executives, mid-level managers and traditional management gurus lack. 

“Most traditional consultancies will always analyse from within the organization. They will look at your processes, your systems, and understand the people and the policies to see how we can optimize. And it’s great if that optimization, in the end, also benefits [a customer’s] experience. […] But it’s very analytical and it’s very numbers based,” says Anne Meijer, business development manager at Livework Studios, a service design company based in five major world cities, including Beirut, currently working with the local strategic consultancy Brand Cell. “Service design is more and more coming inward. We basically bring the customer into the organization. First we show and make the organization understand what the customer is experiencing. Then we imagine how we can use this experience, and understand what it means for an organization and the business.” 

To understand this better, imagine a bank where customers complain they spend 15 to 20 minutes waiting to see a teller each time they come to a branch. A traditional consultant might suggest adding more tellers or instituting a policy whereby each teller must limit interactions with customers to a maximum of ten minutes. A design consultant, on the other hand, would interview customers to find out why they’re coming to the bank, and interview tellers to find out what their processes are for dealing with customers. This interview technique leads to “visualizing” ways to 1) reduce the need for people to enter a branch – which can involve using new technologies like websites, e-banking or even ATMs – and 2) speed up the process once they’re there. Visualizing means just that. Think post-it notes, storyboards and reducing often complex information into a visual, digestible form the way designers are renown to do. It’s all very right-brain and quite the contrast to the ruthless penny-pinching associated with the “old way” of business optimization. One of the leading firms in this new field, US-based IDEO, says in describing its work: “Nobody wants to run an organization on feeling, intuition, and inspiration, but an over-reliance on the rational and the analytical can be just as risky.” IDEO’s use of design as a problem solving tool, the company assures, “provides an integrated third way.”

Meijer also added that, as a consultancy, “we need to give [clients] short term benefits,” that are more tangible than abstract outcomes (like customer loyalty) which are hard to quantify. A prime example would be identifying redundancies and firing them along with other optimizations that more quickly prove a consultant’s bill is worth paying. Joe Ayoub, CEO of Brand Cell, adds that, with only one completed service design solution thus far offered in Lebanon, the company is charging “maybe not as much as we would love,” but is hopeful that “next year, we will command the price on service design.”

The Less profitable model

As noted above, the “design is different” gospel preached by this new wave of consultants has 50-year-old roots and it’s not just business in need of salvation. For an example of evolution in a petri dish, we once again turn to London (See: the Peppered Moth’s reaction to the Industrial Revolution). Seventy years ago, the government formed a council on design to keep the country competitive in industrial design. Today, the Design Council touts itself as “champion[ing] great design that improves lives.” They’re talking new designer meets social challenge, something Doreen Toutikian sees is sorely lacking in Lebanon. “What we don’t need is another chair,” she says. Toutikian directs the non-profit MENA Design Research Center, organizer of the annual Beirut Design Week, a seven-day orgy of all things design launched in 2012. That year, the MENA DRC hosted a program that let designers use their prowess to try tackling real-life problems people in Lebanon face. Ideas which were generated included a new traffic management system for Gemmazyeh; a “sustainable consumerism project” that would have turned plastic bags into other useable and sellable objects in Bourj Hammoud, and a device that lets users monitor how much electricity they use to avoid blowing a fuse when using the generator, and to conserve power. While almost none came to fruition, she argues the process helped change how participating designers think, so she considers it a success story anyway.

She says the MENA DRC trains young designers and will keep on spreading the word about design’s potential to transform the world, working from the bottom up to create an ecosystem focused on solving Lebanon’s myriad problems. 

Tried and true

While the direct economic benefits of this new iteration of design are hard to quantify, there are continued efforts to use the more aesthetic aspects of the discipline to grow business and create employment in Lebanon. UNIDO’s creative and cultural industries cluster project is matching furniture manufactures and jewelry makers with young designers in an attempt to boost these traditional industries now in various states of disrepair (see story on page 36). 

Still missing from the equation, however, is state support for any of these initiatives. While the UNIDO program shows promise, it is unclear whether the cluster will survive once the money from outside dries up. Foreign funding to help local creative industries and designers has come to Lebanon in the past. However, two prominent initiatives, the Lebanon Creative Cluster and the Beirut Creative Cluster, ceased functioning when the money dried up, according to Salim Tannous, former director of the BCC. The LCC launched in 2009 and, based on its time capsule of a website, died by 2010. It did not achieve its stated objectives (“increasing the coordination across the creative industry ecosystem,” “channeling government resources and programs,” and “enabling capital formation,” among others) and Executive was unable to reach someone directly involved in the project for further comment. 

The BCC started work in 2012 and was more focused. Tannous explains that it catered to any company whose products end up on a screen, be it TV, cinema, computer, tablet or smartphone, but failed to become financially self-sufficient as a cluster, which prompted him to leave as manager earlier this year. Building an ecosystem for the creative economy in general or for a design economy specifically, therefore, will likely require government financing.

Source Executive Magazine

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