Posts Tagged ‘innovation planning’

Goal Directed Research for Innovation Planning in Emerging Markets

What differentiates the research conducted to inform the design of an innovative product or service, in an untapped market? Michael Kimani asked me this question during a recent Skype conversation and I promised to write out the answer.

  • Goal directed research for innovation planning seeks to discover opportunities for new products and services for a particular market or population segment.
  • This means the scope must be broad enough to gather evidence of a market opportunity, customer needs and willingness to pay, as well as identify the constraints and barriers in both the environment (such as infrastructure) and the target population.
  • Looking for evidence of a viable value proposition and/or a business model is what distinguishes this type of early stage research from traditional product and service design research whose goals are to discover the optimal design solution for a particular task and target audience.
  • Unlike academic research, there may not always be a hypothesis to be validated at inception, nor the outcome pure knowledge.
  • Instead, there is a goal driving the design of the research, whether broad focused and exploratory, or narrow focused and specific.
  • This initiating goal can be set at three levels:
    • Sector specific
      • An example of sector specific goal setting would be to explore the potential for financial products and services for a bank. Alternately, this can be framed as identifying opportunities for innovation in financial services.
    • Demographic specific
      • A startup with a product or service under development may want to discover which segments of the target population should be prioritized for their product testing and launch. Alternately, a consumer products manufacturer might want to explore wholly new markets and the customization required for their product range.
    • Outcome specific
      • A popular outcome specific research framing that is sector and population agnostic is “What are the barriers to adoption for our intended innovation among this target audience?” We have conducted such research for a wide range of objectives, from the introduction of sustainable agricultural techniques among farmers in rural East Africa, to insights driving product development for a fintech startup.

The challenge in untapped markets is a dearth of legacy data and consumer insights, hence the need for more discovery driven exploration upfront prior to drilling down to specific research focus areas. In the forthcoming post, I will share our customization of Vijay Kumar’s innovation planning methodology developed over the past few years in situ during projects in East Africa. Note that subsequent research to inform the specific concept design of a product or service will have more of an indepth focus on the target demographic and their particular context.

Frame Insights: Going back to first principles in the Innovation Planning Process

After conducting research, we need to bring structure to what has been found and learned. We sort, cluster, and organize the data gathered and begin to find important patterns. We analyze contextual data and view patterns that point to untapped market opportunities or niches. Finding insights and patterns that repeatedly emerge from multiple analyses of data is beneficial. ~ Vijay Kumar, 101 Design Methods

“It’s what happens after the research that’s important” is something I found myself saying three times to three different people in three different contexts over the past couple of days. Anyone can go out and interview users and beneficiaries. What’s important is what happens during the Analysis phase.

To ponder this in detail, I wanted to go back to first principles, and drill down into the post research stage where we are expected to frame our insights.

Vijay’s slide pops out 5 key outcomes from this phase, and these are critical for solution development in the subsequent phase. These 5 outcomes from analysis of the data collected during the research phase are:

  1. Looking for patterns
  2. Exploring systems
  3. Identifying opportunities
  4. Developing guiding principles
  5. Constructing overviews

It is this stage that distinguishes the quality of the outcome. Now, in the case of our work in the informal economy operating environment, we have built up an overview of the landscape over the past several years, primarily through immersion and thick data collection using design ethnography methods.

Starting from the purchasing patterns and buyer behaviour of low income consumers, back in early 2008, all the way through to the development of guiding principles such as flexibility, we have explored and mapped the ecosystem from numerous vantage points.

Today, our synthesis of user research does not happen in isolation from the body of work – intellectual property – that has been developed over time, through experiential and practical knowledge.

This, then, is what underlay my conviction when I spoke about the importance of the quality of interpretation of the data, and the transmutation of these interpretations into implemented insights in the form of new product features, service design elements, or nuances of the payment plan in the business model.

Increasingly, the Frame Insights phase of our work has led to the evolution of our understanding of the commercial landscape in rural and informal markets where incomes tend to be irregular and volatile, and infrastructure is inadequate or missing. It is this that I’ve been attempting to capture under the category of Biashara Economics.

It’s not Africa specific. The patterns hold, give or take ~30% margin for historical/cultural/social differences, across continents. That is because these patterns are the natural response to the common characteristics of seasonality, volatility, uncertainty, and unpredictability. And this is why one can see the success of the prepaid business model around the world.

It strikes me here that this in fact validates the methodology and approach to exploration and discovery in unknown contexts, something I had framed as the starting point for the very first such project almost a decade ago. Over time, I discovered how much the methods, as delineated by Vijay in Chicago, had to be adapted for the context but that is a topic for another time.

A Framework for New Market Entry Strategy

There are two parts to this article: The first is a revision of the lenses through which we assess the landscape within which your new market strategy will be expected to operate; and the second covers your implicit assumptions at inception, as well as gaps in your  mental model.

1. The lenses for innovation need a universe to ground them.

The development of the first generation prototype lenses for identifying the sweet spot of innovation in the operating environment prevalent south of the Sahara desert on the African continent are described here. The evolutionary path from the original lenses (shown below) is described.

ideo modelPeople, Pesa, Place were used to replace the words Users, Marketplace, Technical as a means to provide cues for contextual exploration. However, in practice, this revised Venn Diagram (shown below) was still missing a means to distinguish the very different landscape of an emerging market. That is, it overlooked the need to consider the whole as an ecosystem in its own right.

The formal definition of a Venn Diagram, taken from the Oxford Dictionary is as follows:

A diagram representing mathematical or logical sets pictorially as circles or closed curves within an enclosing rectangle (the universal set), common elements of the sets being represented by intersections of the circles.

Without the universal set being represented in these diagrams, it was difficult to create a cue for identifying and describing the often inaccurate yet implicit assumptions made at the very beginning of a new market strategy formulation. And, this gap often revealed itself in form of cognitive dissonance between the observed marketplace and customers, and the tactics intended to support the strategy.

Here is a revised version of this Venn Diagram, enclosed in the rectangle.

VennInformalBy changing the description of the universal set, as shown below, one is then able to evaluate the entire ecosystem holistically.

VennMCCThere is a chasm that divides the value propositions of the producers (sellers, marketers, MNCs) from mainstream consumer culture and the mindset and worldview of the buyers (erstwhile bottom of the pyramid, or emerging consumers from cash intensive, informal economies), and this chasm is where new market strategies tend to falter, and fail. This is particularly noticeable in the African consumer market, especially when considering the mass majority.

2. Questioning the assumptions underlying your value proposition

By adding the missing universal set to the Venn Diagram, one is then forced to acknowledge the systemic differences between one’s own consumer culture, and the vastly different one in this new market. It may indeed be informal and rural, as shown in the sample above, or, it may be the urban consumer markets in the sprawling cities south of the Sahara. Even then, a significant proportion of the economy falls outside of the formal structured environment prevalent in most of the sophisticated consumer markets of the global economy.

And what tends to happen is that elements or concepts from the formal economic ecosystem are introduced or implemented isolated from the supporting information systems and infrastructure. One or two elements from one ecosystem will not thrive in an entirely different ecosystem if there is not fit or context for them to succeed. A clear example is what happens when financial services and tools are introduced under the guise of inclusion.

By going back to the foundation of one’s assumptions, one can identify where the gaps might lie in the value propositions that make so much sense in one’s own context when considering them for consumer segments who might never have been exposed to the same marketing messages, or conditioned to expect “New” to mean “Improved”.

This exercise also provides a cue to consider the systemic differences between the two operating environments, and to assess whether the value proposition or the solution can be introduced as is without the need for an entire support network surrounding it.



Note: I have used the African context as the working example, but the basic framework is flexible to use for any set of disparate operating environments.

User driven innovation planning and strategy in development

It was with feeling of satisfaction that I read Eric Smallberg’s recent post titled “Thankfully, ICT4D is Now About Strategy and Implementations, Not Technovelty” where brings up the lessons from failure and the shift in emphasis of technology based development projects and social enterprises.

He says:

Richard Heeks wrote about the early history of these changes in a paper entitled The ICT4D 2.0 Manifesto. Mr. Heeks explained the difference in earlier attitude between the first programs, and the projects in the field today. Early programs relied upon “technovelty” and focused more on spreading access as quickly as possible instead of on thoughtful implementation. He generalizes the outcome of those early projects into a few words: “failure…and anecdote[s].” Often programs would return with great stories about how technology had changed one individual’s life, without analysis to the larger effects. Past the promotional materials, positive impact became difficult to assess, which in turn led to many projects today being framed by sustainability, scalability, and evaluation.

Reading through, I can honestly say that this applies to all technological innovations aimed at the rural African, the base of that pyramid or for social impact. For most of 2012, I’ve been involved in assessing the current status of a social enterprise in East Africa, and these points from the article resonate:

As speakers talked about their projects, and the effect they had, they all listed off their lessons learned, including:

  1. “Building trust and credibility is crucial”
  2. “Research tech context before strategizing”
  3. “Technology should serve the goal, not be the goal”
  4. “Try to find out if there is an alternative to technology”
  5. “Use the technology that is already in place to limit training needs”

Sounds amazingly like basic advice for user driven innovation, minus the jargon, from the frugal engineer’s point of view (#5 Why reinvent the wheel when first prototypes abound?)

I hope this shift in thinking, as observed among the ICT4D practice, finds a way to influence the startups and social enterprises in more basic services such as cooking, lighting, defecating et al.