Unpacking “Innovation”

Hosts

Unpacking Innovation: Transcript

Welcome to the Circuit Breaker podcast where we challenge the status quo of innovation and new product development. We’ll talk about tools and skills and methodologies used to build better products and make you a better consumer.

I’m Bob Moesta, and I’m the co-founder of The Re-Wired Group and I’m one of your co hosts. And we’re joined by Greg Engle, who is my co-founder and chief Bob interpreter.

Join us now as we trip the circuit and give you time to reset, reorganize and recharge your brain to build better products.

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Greg Engle: So today, we’re going to talk just a little bit about words. And we like to unpack words here at Re-Wired. So I want to unpack the word innovation. And I want to talk about the word innovation.
Innovation is a word thrown around a lot. You hear people talk about it as interviewing people, you hear people saying “I want an innovative person to fill this role”. You hear on the news, you hear, Oh, this new innovation, this new this this new that’s coming out. But what is innovation really?

Bob Moesta: Well, for us, we’ve tried to make innovation a very tangible thing, right. And so for example, I can start the way I would start the conversation is: let’s talk about what innovation is not. Right? So innovation is not invention. It’s not the act of inventing something new, right? A patent is not innovative. Right? It can turn into an innovation. But innovation has to be wide from our definition; it has to have a wide adoption and has to actually help society be better.

And so the fact is, I can have something that isn’t in an invention. That’s not an innovation, and I can have something that’s not an invention, but still an innovation. I think of the iPhone as an innovation, but the Segway is an invention.

Greg Engle: The way I kind of look at it is we tend to look at a lot of words through the supply side or through the producer side. And innovations awards.

Actually, we should be thinking about more from the demand side. And what I mean by that is, we need to be looking at people’s lives. And you said society, right? So we tend to say, “Oh, this is the innovation when it’s a new product”. But a new product is just a new way to get something done, the innovation is done when the person picks it up, and actually does something with it. That’s where innovation lies. Innovation is not a product, it is not a solution. It’s a thing that people use to make their lives better, to get progress done better, faster, cheaper, whatever things are trying to get done in a better way.

Bob Moesta: I’m going to contrast it with something, which is this whole aspect of like on the supply side. The fact is, I’m an engineer. I was taught that there were basically innovative ways of bringing new things to market. And to innovate, there’s technological innovation. And what I would say is that there’s actually more innovation than the market can consume.

And so true innovations have to have a market side to actually make it innovation. Just because it’s new doesn’t make it an innovation just because it’s actually technologically more advanced, and it’s faster doesn’t make it necessarily an innovation. Part of this is we have to be able to talk about kinds of innovation, from whose perspective and innovation from, like, how do we go after it?

Greg Engle: If it comes down to a thing, I just think the words thrown around too much. Like, even what you just said, right? It resonates with me, but also, everything’s gotta be an innovation. Why? Why are we so worried about saying everything’s innovative, or everything’s an innovation? Why aren’t we just saying I want to make people’s lives better?

Bob Moesta: I don’t know the answer to that question.

Greg Engle: But that’s the thing is, I think we get stuck in these words. And the words that create different meanings and a bunch of different things because I can tell you what Wall Street when they hear innovation, they’re hearing dollar signs.

Bob Moesta: It’s not dollar sides. And so this is where it’s, it’s almost defined correlatively around what it means as opposed to what it is. So what it does,

Greg Engle: That gets us to our thing of we always talk again, about is something causal or something in effect. Yes. And I think the way we look at it, innovation can only be an effect.

Bob Moesta: In hindsight, I can only call something an innovation, usually in hindsight, not in not in foresight.

Greg Engle: So I can’t cause innovation, I could set things up to allow people to do different things. And then they’ll do it. And then if it’s something that helps people make progress, then then it will be innovative, and it will be innovative.

Bob Moesta: That’s right. So it’s like an effect, and I can cause the effect. But the fact is, it’s very much surrounded by the demand side, and surrounded by being able to actually help people in struggling moments.

And so most of the time, I would say innovation to your point is actually only defined from the supply side as an innovative way of folding paper, the innovative way of driving a car and innovative way. It’s and it’s a new way of doing it. But does it actually address a struggle? Does it actually go after something on the demand side? And does it actually make sense as a whole? enable people to stop using tech stop using, you know, something different to use that new thing?

Greg Engle: Yes. So I think what we’re saying is, innovation is a word. And we have that a lot in product development. Innovation is a word that’s thrown around a lot. And all we’re really saying is can we take a step back, and stop just throwing around the word and actually think of what it takes to cause people to use things in a way that is innovative, or make a product that helps people make progress.

Bob Moesta: And this is where we talk about supply side innovation and demand side innovation, right? To the supply side, innovation is usually the technological piece of innovation that’s out there. And and demand side is the market or people not the market, individual people deciding to say, I’m not going to do this anymore, or stand for that anymore, I’m going to now do something different. And I need as much demand side innovation to happen as I need supply side innovation.

Greg Engle: Okay, so I hear you on that one. I think we agree that innovation is a word that’s overused. But I want to tack on another word. And out of what you’ve done lately, in the last couple of weeks talking to people, what’s the word you think has been overused or, or the word has lost its meaning because we use it so many different ways.

Bob Moesta: I think one of the biggest words that I think is just way overused, and it’s, in some cases, way, overvalued is the notion of loyalty.

Like customer loyalty. To be honest, for the last two years, we’ve been hearing it where I feel like I’ve been loyal. Yeah, they won’t do what I need to do. So for example, I’m going to change my cable provider, I’m gonna go change my car, “Oh, I’m loyal to the brand”. And it turns out that loyalty is actually caused. And at the same time, it can be broken.

And it’s an underlying understanding of how it works. But it’s like the accumulation of something. So it’s almost like accumulated debt or accumulated accrued interest on something. But we’ve turned it into a math problem. And people are now saying, “well, you know, everybody who buys the same thing over and over again, that’s, that’s loyalty. And we can use that to predict what’s going to happen”.

But the fact is, we know that struggling moments happen to people. And despite the fact that they might have 23 years with this one company, in terms of loyalty towards you know, well, you know, let’s say your cell phone provider, at some point three things can happen and that loyalty has gone.

Greg Engle: Do you think loyalty from the supply side, from the producer side, or from the incumbent side, that’s something that they’ve they’ve used, and they’ve tried to put it down into a, that’s our brand equity.

Bob Moesta: For them, it’s a measure of brand equity. And what it implies is like, at some point if somebody’s been using us, they’ll continue to use us in perpetuity. And so the fact is, is what it does, is it actually an interview as it’s the things like when you see QuickBooks, and all of a sudden QuickBooks comes up and says “Hey, if you want to be new, we’ll give you a new rate for the first year at like $50 versus us paying $200-300”.

Part of this is it’s a two way street. And it’s one of those things where we have to be able to understand that loyalty is a factor but it’s not a the factor. And if anything, it’s it can be broken it’s more fragile than anything else.

I think as Alan G. Lafley has written a whole bunch of stuff around this. He’s the president of P&G or the CEO, and he really takes the fact that loyalty has to be earned, and the fact that it has to be respected. And you have to understand it’s not an automatic and I think that’s the thing where loyalty (is misused) is like we need somebody who keeps coming back over and over as loyal. I don’t think that’s true, either.

Greg Engle: Do you think loyal as a word and the fact we want to increase our loyalty – is there a danger for companies to think that way?

Bob Moesta: The fact is that, again, I think loyalty is an effect. It’s not the cause. It’s, if anything, a feedback loop for people. But most people jump in the middle and say “we have this much loyalty, or we have these best users or whatever, these people are loyal to us”. But the thing is, is that the moment we use it, my belief is we overvalue it.

And to be honest, there are things that we frame, and things that we talk about, If I have loyalty that’s great, right? But the fact is, I can’t count on loyalty to do anything more. And it’s more like, like I said, we rather use it as a metric as an outcome, as opposed to saying, “Boy, if I improve loyalty, it’s going to actually make the business stronger.”

Greg Engle: Are all customers loyal for the same reasons? No, never is that the danger is we lump them all into an average of loyal and we don’t actually know what causes loyalty?

Bob Moesta: Well, and I think there’s two things, not only what causes them to be loyal, but the fact is, at some point in time, what do they expect from loyalty, right?

Some people expect a little better service, some people expect a lower price, some people expect. All of a sudden, loyalty actually gets manifested or aggregated up into because you buy a lot, you use it a lot, you must be loyal.

But there’s actually the measure of loyalty when you actually have a conflict, and they’re willing to stay. And so loyalty in the wild can’t be seen. It can only be seen when there’s, you know, some kind of struggle, right? Because at some point, I’m willing to stay with you even though we have this problem. I’m willing to actually help you when you’re down. Like that’s what loyalty is.

Think about what loyalty really means, like loyalty to a dog. People are now thinking that loyalty has just cashflow. And it’s all determined by attributes of consumers and attributes, if you will, of behavior, but it doesn’t actually define what loyalty is.

Greg Engle: In our work, the last couple of months, we’ve been doing some of this stuff, and people have been talking about loyalty. And I think what we’ve discovered is that different functions even define it differently.

What someone thinks is loyal from a packaging engineer is even somewhat different than what the marketer thinks, well, and how they talk about things differently.

Bob Moesta: Here’s the other part of loyalty that I think is a double edged sword is that when you have loyalty, it means people like what you already have, which makes it very hard to change what you have.

And so it actually causes you to stop innovating. To go back to the other word is like, well, we can’t change that. Because our loyal customers won’t want that. Well, loyalty is really habit, right? It’s the fact that they’ve been able to ingrain it and help them make progress.

Greg Engle: So this discussion we’re having, and it kind of goes back to what I started the session with, which is, I want to talk about words, right?

Bob Moesta: Because words, the unpacking session is what this one’s called,

Greg Engle:…because words have meaning. Well, but meaning is dependent on the person that’s speaking and also hearing

Bob Moesta: I’ll say one thing we do here is we argue a lot. And we argue a lot, because I’ll say the standard definitions of words don’t fit the things that we do. And so part of this is we wrestle with language a lot.

So we can actually understand what things mean to people in the context they’re in. So being healthy can mean 28 different things. But everybody, like I get 1000 people to say they want to be healthy, but how they actually execute on it is so different. The other point is, every word has to have a reference point. So it’s not healthy, it’s healthier than what and what you find is that definition when the reference point changes is actually where you start to realize that at some point, we need to have contextual definitions, not absolute definitions.

Greg Engle: I think as you leave this podcast and as people listen to this, and they reflect on this, I think the key takeaways we want them to take is when they hear these common words.

Truly unpack them, truly understand them, not from your perspective alone, but from everybody’s perspective. Because if you do that, and you understand the common definition, you will have a common definition amongst a group you’re trying to work with, or trying to solve the problem for you have a greater possibility of creating something that’s worthwhile.

Bob Moesta: That’s exactly right. And so and so, you know, if anything, my suggestion as you as you as we end, the podcast is that the assignment is for you to go off and think about words that people almost just use as an off the cuff point, that was great.

“Oh, wow, that was a great meal!”. Why was it a great meal? What do you mean by a great meal? What was the context wrapped around that great, and what made it great? What wasn’t there, like all that unpacking is so important. And so the fact is, it is just because everybody would love to have a great meal every night. But if you have a great meal every night, that almost makes it impossible to have a really great meal.

Greg Engle: What I would like people to do that don’t want to go that far into interviewing or things like that is when you’re in your next product meeting, or you’re in your next meeting with people…

…and there’s a word that is generally commonly accepted as just a phrase that people just pass by, it just just runs right past. Take a minute, understand the context of the situation, and then ask for verification, because what happens a lot, and we see it a lot with developers, if I come from an engineering background, and you say a word like frequency, it means something totally different. If I come back from a word, that word is a marketer, because frequency and marketing could be the amount of time someone buys something. Frequency to an engineer, is what…

Bob Moesta: …it means a lot of things, it could be the frequency in which I can actually make it, it could be the frequency, which, again, people buy, but it would be how long does it last a whole bunch of things.

To end it with the story, I just remember being in a meeting, it was quite a while ago with a consumer packaged goods company. And, and we’re doing a product meeting and the marketer turns to the engineer and says, like, I need to think about the roadmap, “could you actually give me you know, what are the underlying technologies that you’re working on so I can start to think about how we put them into the phases of what we’re going to do next, right?”

Seems like a simple assignment. And the engineer asked a few questions and they went back and forth. And finally, the engineer has almost this panicked look on their face and the marketer has an urgent look on their face and they go timeout/stop.

We were like, okay, hold on a second, I think you guys actually don’t even know what each other’s talking about. Alright, and then what do you mean? I say, “Okay, so first of all, let’s just talk about what’s the assignment?” And, and the engineer goes, “yeah, that assignment, they want it by next Friday. That’s three, that’s like 300 pages, that’s like, you know, I’m going to tell you every detail of where we sit on every underlying technology of what’s going on. It’s, it’s, it’s 40-50 hours worth of work, I’m gonna have to pull some people around to be able to do it”.

And the marketers looking at me like, wait, what?

I say, “Well, okay, stop, tell me what you think it is”. And the marketer’s like, “I just want a bullet point list of the five underlying technologies and when they’ll be ready”.

All of a sudden, the engineer is gonna run off and do this 40-50 hours worth of work for a little assignment where the other person was, like, almost like, I just need, I need the top line of what’s going on.

And then ultimately, we took the time to ask – what do you need it for? Ultimately, it turned out to be like, three hours worth of work.

But the notion is that at some point, though, they used all the same words, they agreed to what they were going to do. They were just talking past each other. And so this is where I think the whole notion of unpacking is so critical, even within yourself, when you start to think about how you’re, like, how you talk to other people and the words you use.

It’s one of those things where you start to realize like I’m using this word because I can get away with it.

Greg Engle: So as you leave this podcast, and you’ve go on the journey, I want to leave with one small assignment and I’m gonna give you a word. I asked Bob his definition of the word and I’m gonna give a definition of the word. And you’ll see that we don’t actually have common definitions.

But then I want you to answer and define that word as well. And once you do that, I want you to go as ask five other people. So you can see that a very simple word can have multiple different definitions. And also different definitions based on the context. We’re kind of cold right now. And we’re not in a context. So it’s going to be a top of the mind definition where if we were in a different context, it might be a different definition. So if I said the word feast, yeah. What does that mean to you?

Bob Moesta: So a feast is so I just just came from my farm in Wisconsin, and one of the things we had is we had a boil, and it was a feast. It was a feast,

Greg Engle: …but you still haven’t told me about it. So what I mean by that lots of people

Bob Moesta: 20 plus people, we did a boil, which we had clams and, you know, different things bought corn and sausage and, and scallops and all this stuff. And it was like it was more food than anybody could eat. And it was very, very diverse. And it was, it was a great time of being together and spending time together and great food.

Greg Engle: And feast to me, when I hear the word, I always think of thanksgiving. So it’s family. This was a family, right? So in my definition, it’s family. It’s having that. And it’s going to be food, because we’re talking about feasts that generally bring up food. But in my case, I’m thinking of a small, but intimate group as a feast for me. Because that’s what I envision when I hear the word feast. I hear Thanksgiving feast. Yep. And that’s the image it brings up to me. So if someone said feast, I would think Oh, holiday, Thanksgiving, family. Perfect. You’re saying outdoor party, bunch of people, a bunch of food, haphazard food, almost a big boil big thing where I’m thinking, you know, a very traditional thing. So it’s different. So if you put yours in front of me, I’m like, what?

Bob Moesta: What, if I asked you, hey, I need you to create a feast for me, we’d be on completely different pages.

And I would be literally saying this weekend, we get to do a feast, and you’re like, you can’t do a feast until Thanksgiving. And that is the point is that a simple word like feast actually sends you in a direction. But it’s not clear and clear enough to know what to do. And so this is where we have to unpack these words, and understand that we have to actually come to terms with your definition, your definition and my definition. There’s no wrong and our definitions. But ultimately, if we’re trying to do something together, we have to come to terms to the trade-offs of can I have a feast that’s not in thanksgiving?

Greg Engle: Yes, we have to figure that out. And that’s where context matters as well. If I put a context on the word before I said the word feast, yes. It might have changed your definition.

So what I want people to do is now take that word and define it for themselves. And you kind of got our version so that’s going to be in your head. But I want you to see if it’s different, similar words, similar words different, because the differences is actually where the problems lie in developing products and actually miscommunications.

I’m sure if we got 15 people in the room, it’d be at least 10 different versions, right? So I want you to take that word, I want you to unpack it for yourself, and I want you to ask other people. And then I want you to think about that and say okay, what other words in my life? Am I doing that with?

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