This post is a transcript of S2 E7 of the Voices of Customer Experience Podcast with Mary Drumond and James Conrad, featuring Nammy Vedire, Director of CDI-GeorgiaTech.
According to Dr. Vedire, the way the center thinks about innovation is the human beings - the entrepreneurs and innovators. She said that at the end of the day, we're all human beings and when we go out and do innovation or work on innovative projects, the instrument through which we do this work is ourselves. She added that the human mind and the human body have some limitations. She said you should be interested in the limitations and knowing the faults of the instrument through which you're conducting the innovation work, and that's sort of the ethos and thinking around deliberate innovation.
Dr. Vedire explained that we all know that we're limited by cognitive biases and that human beings are subject to illusions and blind spots, and despite that we are living full and rich lives. However, in the context of innovation, the flaws that these illusions advisees exposed just leave us open to so many mistakes and faults that can kill those innovation projects and startups very quickly. She added that is why at the center of the whole focus is how can we bring these psychological, social, and developmental limitations or constraints that we have to the forefront. That way innovators and entrepreneurs can not only be aware of it, but then learn how to build processes around them so that their startups don’t get killed because of the effects of these phenomenon. That's the whole ethos behind the deliberate innovation approach.
Helping Startups Navigate Around Obstacles and Roadblocks
Dr. Vedire then brought up corporations, costs and startups selling to corporations. She said that the Center runs GT programs, and in the last eight cohorts, they have had not only startups go through the program, but also innovation teams from corporations like NCR, Coca Cola, and Mercedes Benz who work alongside the startups. She added that the way the deliberate innovation approach works is that the tools and the principles are applicable no matter whether you're a small company that's just getting off the ground or you're a big company trying to tackle the realities of a new world and a changing customer profile. She said you have to figure out how to build innovative project products and innovative ideas for your company. The idea stage and the principles stay the same, but the application, the scale of it, sort of changes depending on your situation.
Dr. Vedire and her team have found that the startups learn a lot from the corporations about how they're structured, how their innovation processes are structured and how they can interact with one another. The corporations in turn learned from the startup founders how their ability to move quickly helps them move faster and how can they borrow some of those principles or structures for their own team within the larger organization so that they can maybe adapt and use those things to their own benefit.
Behavioral Economics and Its Application
Dr. Vedire says that going to grad school gave her the tools of trying to figure out how she can go about behavioral economics in a systematic way. She added that Dr. Merrick at Georgia Tech started the center in 2011 with this vision of trying to figure out is there a way to engineer a process for innovation that startups could use.
They were trying to figure out could we even do anything to improve the odds for a startup and in seven years what she and her team have realized is that the common advice that is given to almost all entrepreneurs is to get out of the office and get in front of customers. They are asked to build a product depending upon what they think their customers need then try to get in front of the customers to try and sell it to them. She said if it doesn't work or they don't want to buy it, then you come back, go to the drawing board and try and figure out what you should change. Then, you make that and then go back to the customer and go over this loop multiple times.
She commented that you might hit the magic secret or you completely miss and have to close down the startup. What she has questioned is why do you go over this loop over and over again? What if you stopped yourself from building a product before you were certain that what you were building actually had a value that the consumer wanted to purchase.
In addition, she explained that they don't talk in terms of minimum minimum viable products because they think that it puts too much of the emphasis on what the product needs to be, and the whole focus of the deliberate innovation approach is to see people for who they are. That is what she thinks is the more fascinating part of the approach is you don't build anything until you understand the situation that the customer is in and what it is that they're actually not indifferent to that you could create and would change their lives.
She has discovered that “like”, “want”, and “desire” are not safe and reliable from an innovation standpoint. It is difficult to build something around that and expect your customer to consistently buy whatever it is that you make for them. None of these words actually capture what it is that you want from your customer. What you're looking for is in fact non-indifference. You want the entrepreneur to think in terms of what is it that my customer is going to be non indifferent to that if I make it, they're going to reach for immediately. Therefore, the language and the approach is geared towards thinking in terms of what is a non-indifference. So they now think of customers in a different way. Is it what can you make for them that they cannot not buy or they cannot not avoid doing. This “not not” principle is actually important because it's a frame of thinking. It's a logical way of thinking in which you can actually understand what it is that makes the customer who they are and makes them become more of themselves. What Dr. Vedire and her team realized is that thinking of it in this negative framework actually helps.
The Opposite of Up
Dr. Vedire explained how the opposite of up is never “down.” Instead, it is “not up.” She explained that there are so many different directions that your customer could go that is not up. You have to shift from that framework to thinking of the opposite of up is not up and same thing for opposite of white is not white. It's not just black. There are so many other colors to choose from. As soon as you start thinking about it that way, you can think about your customer.
Traditionally, when we think about indifference, it doesn't typically connect with action, It is typically related with being very neutral, and if there is indifference, there is no action. However, Dr. Vedire believes that indifference is a way to get action. She said what you need to identify is what the situations are in which your customer is going to be passive or indifferent to the fact that you showed up with a product that would change their lives. If they're indifferent, they're not going to act in any way, shape or form. You want to look for the opposite of that indifference, which we call it non-indifference. You want that inaction, and that that's what is going to move them towards wanting your product.
The issues of behavior, psychology, understanding what motivates people to buy and not to buy, and cost and benefit decisions are intertwined with this concept. When startups talk about how their customer is a big business like a Porsche, they don’t realize that Porsche as a company is not gonna buy what you're making. There's one person within that large organization who is responsible or to whom what you're making is going to be something of a non-indifference in their life and that's why they are going to buy it.
She added that if you're selling B2C, there are those individuals who are going to make those choices and whose lives you want to be. Trying to see that customer for who they are, where they are, and how they are is the whole point of the approach.
We asked Dr. Vedire if there are any strong actionables of ways that the CDI and her work have been helping companies. She said that when the workforce started, they would see how innovators, in both large companies and startups would go out into the field and want to do customer interviews. However, it's well established in psychology that interviews don't actually work. You are interpreting the way your customer is reacting to something in the way that makes sense to you. There is so much cognitive bias getting in the way of you seeing and understanding what it is that they're actually trying to tell you. What she has realized is that it's these cognitive biases, especially things like confirmation bias where you're, your customer tells you a list of 10 things that are top of mind for them, and you listen to point number eight and point number nine. Then, you forget the fact that there were seven other items that they mentioned before they ever got to anything that you were interested in working on.
In addition, there are other artifacts like demand characteristics that show up when you go out to interview customers. The way these demand characteristics show up is when you go out and you ask questions in a way that indicates to the other person, what is the answer that you're looking for. She added that those kinds of demand characteristics show up in a lot of different subtler ways as well, and we're just not paying attention. There’s only so much that the human mind can pay attention to at some point, and when you go out and do these interviews, you really have to pick and choose how you structure those conversations so that demand characteristics, cognitive biases, and all of these other artifacts are minimized. You can never get rid of all of them, but knowing the effects of them and being aware of how they manifest all helps you come up with a plan of how to design a process that will help mitigate the effects of all of these things.
Dr. Vedire and her team have built a process called a documented primary interaction (called a DPI for short). The word “documented” means that every interaction gets recorded in one way, shape, or form, whether it is video, audio, or just taking notes. There is no recording on somebody else's behavior or feelings or insights. So if you're talking to one person, they can only talk about what their experience is. They can't report on somebody else's ability to your job function for instance. That is the primary part of the DPI. The last part talks about it being an interaction, so it is a conversation. There's no prescriptive questions that you go into a DPI with because you want to be able to take the conversation where the customer wants to take it, not guided the way you want it to go because they got to what they're saying.
One of the things they have received in the program and as a center is that innovators come in with a product idea already and then say “tell me how to build this” and “how do I fund this?”. She then talked about an example of a piece from the Harvard Business Review discussing marketing myopia and about how large product large companies orient themselves toward a product and then lose sight of the customer.
She then provided an example with railroad companies. Railroad companies that were so central to the economy and defined themselves as railroad companies and forgot very quickly that they were not a railroad company, but instead they were in the business of transportation. They were in the business of enabling their customers move from point a to point b, and that's what made them come into existence and thrive. So when you don't define yourself in the context of what it is you're doing for your customer, and instead look at it from a product perspective, what happens is what happened with the railroad.
Dr. Vedire said that she has some competencies on some and is learning the other parts. She added that the one thing that she has learned is the nature of the way in which cognitive biases and these blind spots and the ways in which all of these other phenomena manifest is is is so hard for human beings to notice just on the fly. She has found that you actually need a process that protects you from that sort of short sighted focus, and she said it's great to have that focus when you know what you're solving. Her advisor throughout her PhD told her that 50 percent of the battle is won once you formulate the right question. She said that you need a process that protects you from that.
She then provided an example of a woodworking shop that has a culture where they operate on the phrase “measure twice and cut once.” They have signs everywhere that say, “measure twice, cut once, we make rulers available”. Everyone who goes there operates in that way and then when an employee sees someone cutting a piece out without measuring it, the employee can tap them on the shoulder and say, hey, can you measure twice before you cut it out so we know that we're being accurate. That is how the process, the culture, and the environment can protect against things that we can’t see for ourselves because that's just how we're wired.