Curing the Myopia of Innovation

Today, it seems that if there is one thing that companies should focus on more than any other it is innovation.  Often, this is a question of the company’s survival.  The marketplace is more cut-throat than ever: it’s characterised by global competition, the dynamism of start-ups, and empowered consumers that are ever more difficult to impress. Innovation is necessary to simply keep the company’s head above water.  And perhaps, more dramatically, it is also a question of humanity’s survival.  Humanity faces many threats.  However, with politics and behaviour change having mixed success in dealing with them, the onus has fallen on companies to innovate us out of trouble.

Given the importance of innovation to both companies and society, we might expect to hold a clear understanding of how to do it.  However, the innovation literature, despite being sizeable, falls short.

A typical innovation book offers two things: case studies of successful innovation and guidelines on how to create the organisational culture and structure needed for innovation.  Case studies might allow the author to derive some best practice guidelines on innovation, but they rarely offer a theory or even a structure on how innovation should take place in the future.  Organisational guidelines might indeed allow a culture of innovation to be fostered, but this hardly guarantees that the ideas a company produces are innovative.

Consider the most influential book on innovation, Clayton Christensen’s The innovator’s dilemma: When new technologies cause great companies to fail.  Christensen’s argument is that “great companies” focus on pleasing shareholders and existing customers.  This leads them to innovate incrementally, rejecting riskier disruptive innovations that, when they become available, lack demand.  However, disruptive innovations are embraced by smaller companies, who make them viable and take over the market before the ‘great company’ can adapt.

The innovator’s dilemma is compelling, but ultimately offers little in guiding us to create disruptive innovations.  Instead, it focuses more on the barriers that stopped great companies from innovating.  It is, then, less a theory of disruptive innovation and more a theory of why disruptive innovation does not happen.  Furthermore, the fact that he bases his arguments on only two key case studies hardly provides him with the basis for a more general theory of innovation.

Similar issues are associated with another core innovation text, W. Chan Kim and Renée Mauborgne’s Blue Ocean Strategy.  The authors position their work as a counterpoint to the strategy orthodoxy that companies should focus on differentiating within existing markets.  They call these “red oceans”, which reflects the bloody nature of competition.  Red oceans have limited prospects for growth.  In contrast, “blue oceans” are new markets that offer opportunities for high growth and quick returns.  Thus, success means identifying these new spaces and innovating.

This all sounds great in principle, but the question is how to chart and sail into these blue oceans?  In other words, how should we create innovations that create new markets?  This is a question on which the authors offer little.

Beware the fetish of creativity

Given this void, it is no surprise that we turn to magic dust.  This particular substance is so potent that it promises to save the world and let us rediscover ourselves.  It is creativity.

It seems sensible to ‘pursue’ creativity.  After all, creating truly path-breaking innovations requires a certain imagination and vision that means looking beyond the status quo.

The trouble is that we have created a fetish of creativity, and in doing so have lost sense of its meaning and use.  Specifically, it has become an end rather than a means. Frequently, it seems as if what matters most is being creative rather than using creativity to transform.  Thus, organizations focus on fostering the conditions for creativity.  This usually means hiring young people, creating homely working conditions, and embracing design.  Here, creativity becomes less a practice than a series of signs.  Signifying that you are creative often stands in for actually being creative.

The perils of this are reflected in the state of the world’s cities.  In his 2002 book, The Rise of the Creative Class, Richard Florida described how a new creative urban elite was transforming cities.  Ironically, his analysis brought about the change he described.  Cities began investing in creativity via promoting the growth of creative industries and encouraging the right sort of people to move to them.  But the creative city has turned out not just to be a false promise, but a destructive one: it has created new social problems, as reflected in the title of Florida’s most recent book, The new urban crisis: How our cities are increasing inequality, deepening segregation, and failing the middle class.  The cities that took Florida’s advice worshipped creativity for its own sake without thinking sensibly about the specific ways it should be applied.

Furthermore, creativity is frequently contrasted with ‘thinking’.  In other words, to be creative is to suspend all prior knowledge and to get in touch with our inner child.  As Stanford professor Robert Sutton puts it, in the creative process, “ignorance is bliss.”

Such an idea emerges from our binary view of the brain, in which one is either right- or left-brained, with the creative right side most valued today.  This belief has some unfortunate implications for innovation.  For example, it leads to the creative brainstorm being positioned as the ultimate way to innovate.  Here, a bunch of creative people are placed together in a room and asked to churn out ideas at random with little or no guiding structure and few criteria to evaluate them.  Such brainstorms are more frequently characterised by the excitement they generate than the quality of their end product.

None of the figures venerated in innovation texts like Darwin or Jobs created breakthroughs because they splurged random ideas.  Their breakthroughs came from the ingenious applications of bodies of knowledge built up through a lifetime.  True creativity involves thinking.  This is an insight supported by neuroscience.  As researchers at the University of Florida found, “not all people who have high levels of specialized knowledge or talent are creative, but we also know that to be creative one often needs to have specialized knowledge.”

Beware ethnography-lite

Apparently aware of the oversights of his own work and that of other innovation scholars, Christensen has, through subsequent contributions, tried to spell out how innovation should happen.  This led, for example, in Seeing what’s next: Using the theories of innovation to predict industry change to a series of models for understanding how industries are evolving.  Yet this trend spotting fell short of a model of innovation.

Christensen finally provides this through his jobs-to-be-done theory. This proposes that innovation should be based on study of the particular tensions that consumers face in everyday life.  These tensions are resolved through products.  Consumers “hire” and “fire” products based on their efficacy in resolving the tension.  Innovation should focus on identifying new jobs-to-be-done, or existing ones that are inadequately addressed by current market offers.

Whilst Christensen positions his theory as revolutionary, it is in fact a repackaging of old ideas from various disciplines.  For example, it borrows a methodology from anthropology, design research and psychology, and a model of the consumer from neoclassical economics and economic sociology.

Nevertheless, jobs-to-be-done has a compelling quality.  It is simple, easy to understand and relatively easy to do.  It respects the consumer, in fact elevating her beyond the consumer to an entrepreneur via the language of ‘hiring’ and ‘firing’.  It moves us past obsessing about product features to products’ actual use context.  And it lays out a clear pathway for innovation.  Once the jobs have been identified, there is an apparently strong foundation for product development.

However, it has two substantial weaknesses.  First, it is reductionist in how it views the consumer.  Essentially, it is based on a view of the consumer as a rational chooser.  Christensen does not deny that consumption decisions may have emotional and social dimensions, but nevertheless it is clear that they are ultimately cognitive.  The logic is that a consumer is presented with a challenge in her everyday life, and then makes a rational choice over a product that best answers the challenge.  This is reflected ‘hiring’ and ‘firing’, which implies deliberate and decisive choice.

Consumption is a good deal more complicated than this.  Many of the choices we make are not the product of rational deliberation at all.  As cognitive neuroscientists are fond of telling us, 95% of mental activity is non-conscious.  And as psychoanalysts have long argued, many consumption choices are based on unconscious self-ideals.  Thus, jobs-to-be-done elides the actual complexity of consumption.

Christensen’s concern with rational individuals means that he lacks any conceptualisation of cultural value.  Consumption is not just an individual matter, concerned with the dynamics of individual challenges and choices; it is also a cultural matter.  It exists within a particular cultural context.  The cultural values that shape consumption in the United States are very different from those that shape consumption in, say, China.

Jobs-to-be-done does not explicitly reject the influence that cultural value may have on consumption, but its focus on the tensions in individual lives means it has no way of understanding it.

The second problem with jobs-to-be-done is that it is not able to conceptualise what product needs may arise in the future.  Its focus on understanding and resolving tensions in consumers’ lives means that it is present-biased.  The tension the innovation attempts to solve might well be relevant in the present, but there is no way of knowing whether it will be relevant in the future.  Jobs-to-be-done is not a future-proofed approach.

Again, this is because it lacks a conceptualisation of cultural value.  The types of tensions that consumers confront are partly shaped by culture, and culture is constantly evolving.  Therefore, in order to create robust and future-proofed innovations, we need the means to understand how value is changing, and what this means for consumer needs, ideals and rituals.

Jobs-to-be-done is a step in the right direction, but ultimately falls short.  We need better ways of innovating.

The Cultural Framework of Value

To cure this myopia, we need to move beyond reductionism to a holistic view of value in consumers’ lives.  This means building a Cultural Framework of Value.  The creation of such a framework is driven by two questions:

  1. What are the needs, ideals, tensions, interactions and rituals shaping value for consumers in the present?
  2. How is value changing for consumers and how will value be generated for consumers in the future?

Such an approach moves beyond jobs-to-be-done by offering a much more complete picture of the influences shaping value in consumers’ lives, and by allowing innovations to be future-proofed via exploring how value is changing.

A number of methodologies are useful in answering these two questions.   However, ethnography and semiotics are particularly useful.

Ethnography allows for a deep understanding of consumers’ lives and the relationship they have with products.  A skilled ethnographer can reveal in depth the processes through which value is constructed, encompassing the full gamut of cognitive, emotional and cultural influences.  Unlike jobs-to-be-done, it does not reduce research to individual cognition, but rather locates consumers within a rich, dynamic lived context.  Doing this does not take-away consumers’ agency but rather acknowledges that the influences on consumption go beyond needs, simple tensions and cognitive processes.

Semiotics is the study of meaning.  Semioticians decode what products mean to consumers, and how.  They identify the different elements of a product that construct meaning (e.g. typography, iconography, colour) and analyse them according to shared cultural meanings.  Semiotics provides a rigorous methodology for understanding how products come to have symbolic value for consumers.

Furthermore, semiotics provides frameworks for understanding the evolution of culture.  Semioticians identify ‘codes’, clusters of meaning that provide the ‘rules of the game’ within any given area of culture, or consumer category.  For example, there are many different codes of masculinity in culture or, rather, many different blueprints of being a man.  Semioticians can identify which codes are emergent (new and still small), dominant (big and mainstream), or residual (declining and dated).  The emergent codes provide insight into the future of value.  They are a foundation for creating meaningful futures.

Semiotics and ethnography work well together. Ethnography explores value in the lived context of consumers, while semiotics explores value at the level of culture.  Additionally, semiotics provides powerful tools for understanding how value is evolving.  When correctly utilised, they provide a comprehensive Cultural Framework of Value.  The Framework allows a proper perspective on sources of value in the present, and possible sources in the future.

More than ever, we need good innovation.  At a societal level, innovation is essential to addressing the seemingly ever-increasing problems the world faces.  At a business level, in an era of cut-throat competition, companies often need to innovate simply to keep their heads above water.  Our models for innovating are, however, inadequate.  Too often, we get lost in ideology, erroneously assuming that magic dust is enough to solve complex problems (e.g. the creative brainstorm).  Alternatively, we embrace a seductively simple approach like jobs-to-be-done that fails to account for the complexity of consumers’ lives and is not future-proofed.  We need better, more rigorous approaches that account for the multifaceted ways that objects become valuable to consumers. We need a Cultural Framework of Value.

Building a next gen insights practice

When it comes to consumers, markets and businesses, shifts, changes and disruptions are occurring more frequently and with more speed than ever before. Some come with a degree of forewarning; clear and obvious signals that allow smart organizations time to develop a strategic response to their threat. But most do not. No matter how many signals of change are out there, either right in front of everyone or on the horizon where few are looking, most organizations are still surprised by change and caught off guard by its implications.

Why? Because somebody wasn’t as attentive as they should have been. Or because it was nobody’s job to keep a vigilant watch over signals of change. And so: surprise! The shift, change or disruption becomes a reality. Market share starts eroding. New players with new products begin replacing you with them. And your company has the honor of becoming the next Blockbuster.

Who should have seen change happening now and coming soon? Other than chastising the C-Suite for being asleep at the wheel, we at Gemic believe that change – in people, society, technology and culture – should be the purview of an insights department. But not just any insights department, and certainly not one that talks about that big a-ha moment in the last focus group or in-home they watched. It might be what some might call, for the corporate world, a next generation insights department, a team that works to uncover and explore the big, meaty questions of consumption and value creation.

So, how do you build a next generation insights organization? Here’s a start…

Insights departments must get smarter

Insights departments need to make the transformation – and be fully supported by the C-Suite in doing so – from being transactional and reactionary information delivery services for business units to being proactive thought leaders and sparring partners for the highest levels of corporate strategy. So, stop training and asking them to answer your goofiest, most insignificant questions and, instead, give them the room to deliver on big, existential, human, social, technological and cultural questions that are essential for the long-term survival of business.

No longer should insights be a soft skill, but rather an integral component of the company brain with a minimum headcount made up of the best possible minds you can gather. If you are truly trying to build the capability to know and understand, those minds will have advanced degrees in one of many social sciences: anthropology, sociology, social psychology, behavioral economics. And if you really want to keep an eye on people, society and culture, your team will include not only the insight people but also those who practice foresight. Without that disciplined lens on the future that foresight provides, your perspectives on humans, society and culture will largely be limited to how they are today, not how they might be tomorrow. And tomorrow is where your sights should be set.

Vertically connecting micro, macro and multiple perspectives as well as different data types across one or more disciplines like anthropology and foresight will give your organization an advantage over the many others that hire unqualified people to conduct human research, silo their insights into oblivion and ultimately fail to act or innovate on anything they have learned for any number of reasons, including the sad fact that all too often the stories that are told to business stakeholders about people today or people tomorrow just don’t inspire them to act on behalf of those people. Inspiration matters a great deal. If your insights people aren’t the most interesting conversation partners for the management team, something is broken. The corporate intuition is built in high-level conversations in which thinking on business and insight merge into one. That’s why your new insights task force will have to understand business strategy too.

You must choose the right partner

There’s a good reason why the people in corporate insights departments rarely design, conduct and report on human research: they’ve got too many projects going on at one time to have any real bandwidth for one alone. So, the reality is that your organization will likely be better served by having outside partners to help you with this research. Your challenge is to define ‘better’. To do that, you need to take a deep, hard, critical look at the pool of available consultancies out there and ask yourself how the ones that you currently work with do and the ones that you are considering working with will make your organization ‘better’.

Do they have experience? Is that experience about or adjacent to your business, and does that matter? Does their team have any qualifications to be conducting this type of research in a commercial space? Do they have proven research skills that connect to proven results? And most importantly, do they deliver interesting thoughts beyond PowerPoints? Would you give them a call late at night if you need clarity on whatever you were working on?

If the answers to those questions are all yes then you likely have a candidate partner. Vetting your choices should come down to another set of questions: What qualifications sets this consultancy apart from others? Will its teams be able to draw on previous research experience in my business and adjacent businesses to show me what’s relevant? Will they challenge me and my team or are they just a bunch of client-service experts? Do they talk about what they do and how they do it a) like pompous know it all -types, b) like people who are just trying to hustle me with words they know will resonate with me or, c) like a smoke & mirrors factory where proprietary research methodologies mask the fact that nothing smart is happening with their firm.

Figure out how your next gen model works

Once you’ve vetted and landed on a choice of consultant – or, perhaps, this topic becomes part of your vetting process – you must begin shaping both methods and methodology. There’s a difference, and it’s an important one.

A methodology is a research strategy. It is the umbrella under which you select and develop research methods and employ them in a study. More importantly, it is a theoretical analysis of the methods and principles associated with how a study is undertaken. In short, it’s the why behind your how. A method is one of the many ‘ways’ or ‘hows’ that a study is conducted: ethnography, interviews, focus groups, semiotics, co-creation, quantitative approaches etc.

So how do you create a research methodology? One that gives your organization a serious edge over your competitors through the cultivation of insights that drive empathy, experience, ideas, action and value? You begin with the three factors that should guide every consideration and decision in your efforts to build a new insight (and foresight) methodology.

The first is your research objective. What kinds of questions do you want to explore and to what extent do you even believe that there are ‘answers’ to them? Come to grips with that and you can begin assembling a team of ‘experts’ who can lead those efforts, depending on your objective. Two examples: if it’s a numbers game, consider someone from data science because the days of the old-school quant guy are numbered, or over; if it’s human-centric issues, you should look towards anthropology and sociology. And, of course, if it’s futures then do foresight. In practice, this means that you need a conversational relationship with the potential partners. Just sending requests for proposals out there is seldom a good way of choosing your thinking partners. Developing a better understanding of the types of questions you need to ask through conversations with potential partners is an essential step in choosing a partner. Good research strategy is always a match with the right questions.

The second is your corporate culture. How have insights (and the insights department) been treated in the past? Who in the organization has the authority and status to elevate the practice within the organization? In what formats and settings do (or will) leaders best receive insights? These and a litany of other questions must be answered if you plan to change your organizational insights function for the future. Answering them, strangely enough, is best achieved by having anthropologists or some other social scientists talk with your leaders, teams, employees about organizational realities. The right model has to be relatively proprietary to your organization as it needs to take into account the formal and informal practices that inform your corporate intuition. The right model will improve this intuition and clarify where the company should go next.

And the third is, ultimately, how you look to tomorrow. Imagine a car maker or a mobility service provider that wants to understand where to compete and how to compete. It will need to have a core team dedicated to strategic thinking that defines its ideal future. Chances are that if their vision of their own future is worth the paper it might have been written on, then foresight and social science will have played a significant role in shaping a robust social theory of how to create value for mobility consumers. They will have defined a POV on how the industry, its platforms and mobility ecosystems might evolve. And they will have identified where and how the mobility service provider can add unique value that taps into its core strengths. In the end, it is the combination of social sciences and foresight that will form the base of what will be your most humanly, socially, culturally and forward-thinking methodology.

However you proceed, know that no next gen insights department is possible without a tightly integrated and future oriented corporate thinking mandate. Insight will disappear as a separate function and blend more fully into strategy and all business units. When that occurs, a company will know at all times how it can create unique value.

Cultural Foresight: building more attractive business futures

Don’t be stupid. Let’s keep it simple. To run a successful business, there are only two questions that a CEO needs to answer: Where to compete? and How to compete?

The frustrating thing is that neither of these questions is simple to answer. In fact, there’s nothing simple about them. They are among the oldest business questions. They’re big, difficult, meaty challenges to overcome. They romance best-seller buyers with the latest shiny new bullshit business book. And they make and break CEO careers on the regular.

In these questions, “where” could be anything from what global market to invest in for expansion to where in the grocery store you think your fresh new sausage stands the best chance of getting noticed and sold. And “how” could implicate any number of possible candidates from organizational culture to innovation methodology to supply chain logistics.

Good CEOs know this. They understand the intricate and interconnected complexities of their business and what is or is not working for them today. That’s what they spend every day on. Better CEOs know something more. In addition to immediate challenges, they understand that “where” and “how” should be asked as much about tomorrow as today. Whether sausage or something else, they seek to prepare their organizations for the unknown challenges and opportunities of two, five, ten or more years from today. They look to the future.

How do they look to the future? Well, lucky for those who are not part of that 1% who naturally, magically or otherwise have an uncanny ability to imagine what might come next and, in the most inspirational way possible, make it a reality, there’s now an entire industry wing in consulting dedicated to this nebulous topic of the future.

The choice of consultants available to organizations seeking to prepare themselves for what might be next and/or hoping to gain an element of surprise over their competition when that next arrives is still in its semi-nascent stage as a commercial offering. You have the trend hunters, Internet hipsters who give clients a peek into their bookmarks to learn about what’s hot and what’s not as supposed innovation guidance. Then, you have the futurists and foresight folks. While there is some contention over titles – foresight tends to critique futurists for being too predictive – the difference between the two, if any, has become blurry. Both conduct desk research to identify weak signals of change on the horizon, present their clients with a litany of those signals and hope that they know how to navigate a way forward with no map, just a bunch of semi-random signs along the way.

Then there is a small population of future consultants that lines the way forward with signs of what might be while also providing a more informed map towards tomorrow. That map is culture. Some academics, such as Nicholas A. Christakis from MIT, go as far as calling culture the first artificial intelligence. It is all that knowledge that resides in and outside us and remains ‘in the air’ even as we disappear. It guides us so that we don’t constantly have to make decisions about everything. Culture creates rules and predictability by which we can go about our lives partially on autopilot.

Culture is what you and everybody you know lives in and operates in every day of your life. It is a big and complicated concept, one that anthropologists have developed in over 160 definitions since they first began grappling with it well over one hundred years ago. Wherever you choose to land in those definitions – maybe Edward Tylor’s complex of belief, knowledge, art, morals, law and customs in a society or Clifford Geertz’s webs of meaning and significance which we ourselves have spun over time – culture shapes it all: who we are, what we do, how we interact and perform, what we value and most of the whys in your business questions list.

To answer those big business whys, you must abandon typical market speak and start to understand culture: how your brand fits into it; what meaning, if any, you hold in it; what value, if any, you have in it; what feelings, zeitgeists, movements, disruptions, innovations and ideas might be newly contributing to it, reshaping it or recasting your brand’s meaning and value in it; and, as a ‘provider’ within the economy of this thing called culture, what does your company do for people? How would you articulate its real value to people?

Once you’ve wrestled with these questions – and that metaphor aptly describes the challenge and process of describing culture and your place in it – you are more prepared than ever before to abandon the product-driven innovation that produces solutions resembling others in the market or ideas that flop because they are disconnected from real market drivers. Now, you are ready to explore an approach to growth strategy based on perceptible circumstances, events and experiences of and from that thing which connects all consumers: culture. Call it culture-driven, phenomenon-driven, driven by social realities or, if you want to be a little more audacious, driven by social fact.

An example of a business opportunity area within this culture-driven space that most of us are personally familiar with is home. When we consider this consumer category and the many products, services and brands in its ecosystem beyond the basic approach models of innovation and/or design – exploring need, prototyping form and function, activating in the market through manufacturing, go-to market strategy, marketing etc. – our aim is to research, map opportunities and launch the design process in a way that both prioritizes the cultural and ultimately aligns with contemporary and emerging culture.

Of course, the home, like most sites of cultural constants, is not only contemporary and emerging, but also ancient. At the end of many, many grand quests to explore and perhaps find new homes in strange new lands, humans all over the world – since before they were even human – have adjusted to the environment presented to them by building homes. Other than satisfying basic needs of warmth, coverage and protection, these homes – shelters, dwellings, buildings, residences, places – also fulfilled higher-level needs related to identity, culture and family.

Some of those needs are shifting. Today, two forces, somewhat opposing, are creating new needs and new demands for homes: the first is that dense urban living is constraining the size of the average new home, regardless of the type of home (house, condo, apartment etc.); and the second is that our homes increasingly need to serve more purposes than were required of them in the past. So how can we make new homes meet our rising expectations while also catering to our very central, ancient needs in a home?

At Gemic, before getting into anything downstream or design. we approach the front-end of challenges like this in five stages:

1. Ask big, basic questions about the fundamentals

So, what is a home? Is it:

A shelter from the environment and the natural world?

A place for social groups, families or others to live together communally?

A hospitality hub for entertaining social groups, families or others?

A residence with rules of behavior that have evolved over time through multiple actors?

The answer, of course, is Yes, Yes, Yes, Yes and more Yes. A home is all of these things and more. Certainly, there are many specifics about the meaning, value and use of homes that vary across cultures around the world. But as a concept, ‘home’ generally comes complete with examples of what can be called cultural constants, things like shelter, group living, hospitality, rules and more. Starting with an exploration of these constants gives your entire challenge or study and the solutions that should be a product of it an anchor in something that, like the name says, is constant. Regardless of the tide in current or emerging feelings, zeitgeists, movements, disruptions, innovations or ideas, these are all what a home is and what it will continue to be for a long, long time.

Those kinds of questions about the basic basics then begin to inform questions that probe the possible. Some of those might be:

What new needs arise with the multi-purpose, multi-function home?

How is the definition of ‘privacy’ changing for different people around the world?

What home features could help people transform and control their privacy and space?

How might privacy be disrupted by participating in sharing services such as Air BnB?

Questions like these ultimately set the foundation for the next step in these kinds of challenges; exploring the fundamentals.

2. Explore the fundamentals in two ways

As a futures exercise, any exploration of cultural constants should begin with the classic STEEP foresight model approach: Social, Technological, Economic, Environmental and Political. Like origin points from which weak signals of change typically originate and emerge from, these five lenses guide the desk research that reveals what is and might soon emerge as a new product category, service category, innovation, technological leap, brand, value, meaning idea, feeling, zeitgeist, behavioral change and so on.

In the case of the home, there are many weak signals of change, including:

Global migration + relocation

Global migration and relocation are at record highs. Currently, there are 232 million global migrants. That’s 3.2% of the entire human population. In the past five years – and this is just a tiny sample – 24% of Americans, 26% of New Zealanders and 23% of Finns have relocated from home to elsewhere.

Divorced spaces

Divorced parents need to recreate spaces of home for their kids. The days of dad homes being an occasional weekend sleepover spot for the kids to visit are over. With over 51% of fathers seeking custody finding success in recent years of U.S. appellate cases, custody and the culture of the home are continuing to change.

Home central

Home is now a center of healthcare, education and economic production. Between A.I. planning to move in, the growing popularity of K-12 online education, the more than 3 million Britons who set-up a home-based business in the past few years and the fact that 30 million Americans work remotely once a week and 3 million never enter an office, home is not only where the heart is but often where everything else is as well. 

New urban economic order

Major global cities are owned by a shrinking pool of increasing large players and nodes in global economy become concentrations of the wealthiest people on the planet. Owning real-estate is becoming increasingly difficult to common people and accessing ownership increasingly requires turning home into a revenue generating asset.

Co-living as a service

The frictionless service economy is extending to home space in the form of co-living service companies that enable young people’s desire to lead lives without a long-term commitment to one single place. These companies offer living solutions that provide a mix of personal and shared space, take care of insurance, furniture, internet subscription etc. while yielding higher returns per square ft. than a traditional rental model with fixed lease and extensive home-making practices.

These signals suggest that home as the site of a set of cultural constants is in some degree of flux, one that will leave those constants intact but undoubtedly modified by how our cultural lives (in and out of the home) are changing. How? These signals tell us that home is becoming increasingly less spatially fixed than before, less nuclear than before and less defined as a space with activities separate from those of the outside world than before. So, how do we more deeply examine these potential truths, the experiences they’re creating, and their expression in today’s world?

Well, once you have identified and articulated your cultural constants and your forces of change, it is possible to reframe them as dynamic and future-oriented questions and send someone to dive into them. There is no place for market research or its proponents here. This thing called culture is the territory of the original ethnographers; anthropologists.

Through anthropology and some of its similarly odd scholarly cousins in the social sciences – sociology, social psychology, anything ethnographic – your organization will be better equipped to study the phenomenon, changing social reality or fact in question from a vantage point that will best represent those people you call ‘consumers’, ‘customers’ or ‘users’.

Regardless of topic, an anthropologist will know what to do and will do what they do: hang out, talk with people, watch them, do stuff with them, ask them about it, come home, consider those experiences, consider insights from the foresight work, and write up the overall experience in a way that helps answer those two CEO questions: Where to compete? and How to compete?

3. Articulate opportunity spaces

Articulating future-oriented opportunities should be based on a strong and logical point of view on how the ideal lived experience of cultural constants like, for example, home as a shelter from the environment and the natural world is being shaped by the forces that give rise to a new context in which people live their lives. After the project team of social scientists and strategists have agreed on its perspective, they must create a crystal-clear and actionable articulation of a market definition that accurately addresses the ideal experience of the people they have learned about. Smart companies know that concepts can be copied, but a unique articulation of a market definition can drive multiple value propositions and a constant stream of meaningful offerings while being extremely difficult to copy. Therefore, linguistic precision at this stage is very important, and corporate jargon should be avoided at all costs.

4. Define a systemic way to address the value creation opportunity

It is no longer enough for companies to address new value creation opportunities by their offerings alone. Increasingly, value is being captured by those organizations that have developed a deeply resonant philosophy that is openly practiced by developing, for example, a more sustainable supply chain or a powerful charitable wing of a brand. At Gemic we use a model called “The Six Pillars of Value Creation” to systematically align our clients’ operations with identified future opportunities. These are:

  1. New core market definition needed to rally the organization around the opportunity 
  2. Production platform required to optimize the organization and external partners to address the value creation opportunity
  3. Profit generation logic to address the opportunity cost of making the shift from old value creation paradigm to a new one 

The other three pillars address the required steps to translate the opportunity to meaningful consumer value propositions and experiences.

  1. Value proposition and a core experience that translates the identified opportunity into a contextually relevant consumer value
  2. Cultural strategy surrounding the core experience – defining the deeper meaning of the value proposition and its potential to create a sense of having a positive stake in the future
  3. Financial value logic – defining the way our value proposition is more appealing and more meaningful than that of the competition’s

5. Refine and build a blueprint

Now that you’ve identified your opportunity spaces, tweaked your organization’s mindset and built value propositions, it’s a good idea to move to more traditional research methods and design thinking approaches to refine the developed opportunities. Revisiting people’s reality today will also give us indications as to how we can ideally start building our way into the future by creating a road-map that connects our ideal future with what is possible today. This method, known as back-casting, is essential to master because very few companies are willing to revolutionize their business overnight. Also, many foresight projects leave too much room for interpretation. Providing baby steps to the future is a way to connect a bold future direction with what key people in the organization do today.

That we are living in an age of disruptive, tumultuous change and transformation should be clear to everyone by now. With innovations in A.I., robotics and driverless cars alone, we are seeing a greater acceleration towards tomorrow than ever before. For some people the speed can be scary. For others, it’s exciting. For business, it creates enough uncertainty that it can immobilize the ability to plan, never mind activate or execute.

In times of change like this, smart companies go back to asking fundamental, existential questions about their role in the world. They craft a unique market definition by asking foundational questions like ‘what is home´? They consider all inputs, past, present and possible future. They design to support ways of being in the world. They don’t just jump on a technology hype cycle because it’s the latest. They build confident value propositions with a strong point of view on what truly matters to people. And in this era of endless hype, they understand what it means to be human and how to augment that.

Do you?

From Design Thinking to Good Thinking

Between the frequent features in the business press and the sheer volume of postings on LinkedIn, you might think that every company far and wide is embracing design thinking as the new big promise. Read the headlines: any organization can be innovative if they just follow the design thinking process and, of course, have open-minded people with a positive attitude. Look at the photos: with a handful of people trained in one design discipline or another in a workshop, the evidence of that innovation is on every Post-It note adorning the whiteboard.

But most organizations will end up being disappointed with the outcome of their design thinking flirtation, experimentation or implementation. Not all. For some it will fit. For most, however, it will fall short across multiple metrics. It will produce little more than incremental innovations. It will offer the exact same competitive advantage available to every competitor. And because of our very human belief in and fascination with the power of process, it will undermine extraordinary thinking.

That’s dangerous because extraordinary thinking is what propels great companies forward. Rather than a preference of methods – in design thinking’s case the standard Empathize, Define, Ideate, Prototype, Test model – they have a preference for thoughts, theories, ideas and concepts. Their epistemology rests on a foundation much more substantial than centric-this or centric-that.

For organizations currently using design thinking in teams, all is not lost. It can play at least one important role. In the hectic world of the corporation, its step-by-step process can be a quick and efficient way to develop new ideas and create clarity around product or service concepts within existing categories. But when it comes to reimagining a business, what it provides consumers and how it contributes to their experience of the world, design thinking will be a disappointment. Here are just some of the challenges that will be faced by design thinking organizations that, in all those business press stories and LinkedIn posts, its champions fail to own up to.

Weak on empathy

For all you might expect from the first stage in such a process, design thinking falls short on the empathy quotient. Typically weak when it comes to the wider socio-cultural context in which people (as individuals and as part of a cultural system) live their lives, the research stage of design thinking demands little more than a surface skimming of so-called ‘needs’. Rarely does it call for the kind of expertise and experience in human culture and behavior that one would think would be required to begin a process of true, sustainable or even disruptive innovation.

Simple interactions

Design thinking practioners tend to assume that the value of a product or service lies in a consumer’s interaction with it. Lacking a solid foundation in human research, most assume that all of the insights and a-ha moments will be based in the observable world of interactions. They won’t. Interactions are not the only way that people, individually or collectively, ascribe value to products and services. There are histories, memories, socialities, signs, symbols, indexes and other shapers of the How and Why of human experience that are far more significant than the interactional.

Focus on the user

It’s the holy grail of design thinking and of innovation: just focus on the user and your chances of a big win are increased. One of the appeals of design thinking lies in its promise to address the complex, even chaotic world of contemporary business through this simple focus. But this is a problem, because reducing human beings to users with tasks to complete or jobs to be done detaches innovation efforts from the larger socio-cultural reality within which people experience and ascribe meaning to products and services. User focus almost always leads to incremental improvements to value propositions that are already articulated.

Standard talk

Design thinking can generate tangible innovation results, but the value of them depends solely on the quality of conversations during the process. Or, design thinking can emerge as an obstacle to innovation for the simple fact that its standardized terminology becomes part and parcel of corporate lexicon in those conversations. Unless your company is tasked with chasing incremental innovation, the process of developing the truly new, unique or disruptive innovation requires new ways of speaking that allow us to redefine opportunities, situations, markets and realities. New language precedes ideas, not the other way around.

With all the current hype over design thinking – its second wave of hype in recent years – convincing business leaders to consider another way forward will be a challenge. But there is another way forward, one that seeks more than incremental moves in deteriorating markets. We’ll call it Good Thinking.

Good Thinking (we’ll capitalize it to make it seem important) tells business leaders that to first imagine and then begin activating a prosperous and sustainable future for their organizations they must understand the dynamics of value creation as they are occurring today and might occur tomorrow. To do that, they must abandon all market research and, instead, pursue a deep understanding of all of the private, public, personal, performative, social and cultural ways that people live their lives. You know, stuff you don’t get in a focus group. And to identify and understand those and then locate ways to align your business objectives with them requires big thinking about history and humanity.

For example, many of today’s dominant consumer businesses grew into giants, global or otherwise, in the post-war Western world. Needless to say, that was a time and place very different from the societal dynamics of today: women stayed at home and their household products saved them time, effort and mundanity. It’s impossible to understand the original value propositions of those products without seeing the societal context in which their early value was born. Why would things be any different today? Often, what happens in large companies is that, over time, their understanding of the original value proposition disappears and all focus falls on act of category management, just like they’re taught to do in business school.

So how does one practice Good Thinking?

Put the right people on to the people

The key to successful innovation often lies in understanding the paradigm shift that is currently or could soon be occurring and how it is or might soon shape how people live their lives and make sense of the world. The winners understand history and know that most companies manage businesses with value propositions that were at their strongest many decades ago.

Because all innovation is about people who live in social worlds that means every project should begin by making sense of the society (and its history) where an offering will be situated. To do that, you need anthropologists, sociologists, social psychologists and others. MBAs and designers are not at fault, nor are they doing anything wrong. It’s just that they weren’t trained to study people, social systems, culture and all that complicated human stuff.

Companies that already have such people skills on staff already know and have seen the benefits of their contributions. Companies that do not make themselves vulnerable to disruptors because they lack an understanding of the human why or how of innovation. Meanwhile, the novel innovation lexicon of design thinking reinforces a separation between companies and the wider context in which value to consumers is born. It reinforces the tendency of corporation to develop fields of power with their own language, detached from the everyday life of people for whom they are innovating. To deal with that, you might want to hire a semiotician too!

Get HR to go divergent

As the social sciences increasingly become core competencies in forward-thinking businesses that want to learn more, know more, hear more, see more and consider more, so will other disciplines. Ultimately, Good Thinking requires divergent thinking. Creating a new school pool of employees means not just hiring a Brand Manager with the best business pedigree but – and here’s where we will certainly lose some of you – hiring a Brand Manager with an obviously value human pedigree like, maybe, a poetry passion that lived through hip hop, an advanced degree in rocket science, a cool but failed digital start-up stint or a former life lived in the culinary arts.

People like this already work in companies around the world – companies that have nothing to do with hip hop, rockets, computers or food. If Good Thinking was the latest business shtick, we’d make deliberately hiring people not only for their obvious smarts and skills but also for the value of their past, non-business experience part of the manifesto.

The trick to this, of course, is how do you communicate such an ephemeral ask to a department like HR which, kudos to them, requires a little bit more of a clear reality to make its decisions?

Try predictive cultural analytics

The underdeveloped understanding of demand-side dynamics is a real business problem for the simple reason that relying on existing models of analysis does not give investors a real first-mover advantage in the markets. Real edge over the competition requires knowing what people – the people you might call consumers – almost already do. We’re talking about tomorrow.

Organizations that know how to apply human sciences in business have an edge over those that do not because they have a better lens on possible futures. They understand the real sources of value in human systems that allow companies to develop unique market offerings and definitions of ‘markets’ themselves. Interestingly, many of them also understand exactly what business they are in and, because of that, are able to evaluate and adopt new technologies in relation to their ability to generate more meaningful value.

Value is the issue. Current transactional models of thinking yield little to no predictive power, and this is particularly problematic for investors that seek either underappreciated assets or early opportunities. For them, knowing where to invest without an understanding of change is scary. To help those investors and your teams and organization, it is critical to begin paying very close attention to emergence. What is emerging as value? What actor or technology is best positioned to deliver that value? Together with a rigorous approach to studying possible futures and foresight, teams built on the social sciences have a much clearer way forward.

When teams force their thinking into boxes – and nobody loves boxes more than design thinkers – that operate within and serve to reinforce existing paradigms, business leaders miss their mark and metrics. They lose the opportunity to harness the power of the social sciences and, as a result, miss the most critical insights. They rely on goofy linguistic anchors that make them feel as if they are engaged in an important activity (Yay, we’re prototyping!). They force half-baked ideas into concrete forms too early in the process. And once the idea is supposedly fully-baked, they fail to consider or act on all the human politics and problems that will keep it ever from seeing the light of execution or activation.

Big ideas require new perspectives that can only emerge through open and critical conversation and contemplation that enables a new way of speaking about what could and should be. Ideas with transformative potential seldom relate to a strict process and identified pain points against which designers develop solutions.

Companies must create a space for critical conversations and a more meaningful process for translating good thinking into value propositions and offerings. The real innovators will dare to go against the tide and think better. They will hire smart people trained in human sciences and frame their business questions as existential ones. They will make sense of societal shifts and the new value creation logic. They will facilitate non-linear critical conversations that help teams step outside the paradigm that’s become a prison to their competition. And they will be incredibly efficient at applying design competence to developing and refining solutions once they have their good thinking right.