Posted by George Huhn on Mon, May 24, 2010 @ 11:21 AM
The first part of his seminar was a terrific presentation of examples of disruptive innovation, and in the second part of his talk he encouraged companies to focus less on customer and product segmentation and instead ask the question "What jobs are your customers hiring your products to do?"
He told a story of a fast food restaurant that wanted to sell more milkshakes, so they did what many firms would do: they interviewed their customers to discover exactly what features that they wanted in a milkshake. Then they took the results of that research and used it to build the perfect milkshake that their customers described.
Did sales go up? No.
Did sales go down? No.
In spite of building this great milkshake that they were sure was going to hit their customers' sweet spot, sales remained flat.
So they hired a team of consultants to watch how people purchased milkshakes throughout the day, including how they were dressed, who they came in with, the time of day, etc.
And they found something very surprising.
The majority of milkshakes were sold early in the morning to customers who came into the restaurant alone and purchased only a single milkshake. Finding this interesting, they began to interview these customers, and they found that what they had in common was that each one had a particularly long commute to work in the morning.
It turns out that the job that they were "hiring" the milkshake to do was to accompany them on their long drive to work. But why milkshakes? Well, if you wrote a help wanted ad for the milkshake's "job," it might look like this:
Wanted: Reliable Food For Long Drive. Must be sweet, cold, and filling. Must fit in cup holder, require only one hand to consume, and last for most of the trip. Must not make a mess in car or on clothes. Must have slightly healthy appearance. Coffee, bagels, candy bars, sodas, and breakfast sandwiches need not apply.
You see, many of the milkshake customers had tried other products for the job, but none of those products had the unique combination of qualities that made the milkshake the perfect fit for their tacit job requirements. And it wasn't really even about the quality of the milkshake; it was about the general characteristics of the product that made it right for the job that the customers were hiring it to do.
So what did the restaurant do to improve sales? They moved the milkshake machine to the front of the store and made it self-service so that these customers did not have to wait in the breakfast lines. They could come in, get their milkshake, swipe their card, and go. They also offered a new type of milkshake with small straw-size pieces of fruit inside that made it last a bit longer (they were harder to suck up the straw!) as well as adding some variety to the taste and texture.
In the end, it wasn't about what features that the customers thought would make a great milkshake. It was about discovering the unspoken job description in the customer's mind that made the milkshake the perfect candidate for that job.
I wonder if they tried coffee milkshakes?
There was another group that was the next largest purchaser of milkshakes, and I suspect it was for many of the same "job qualifications." Can you guess who they were? The answer is in the comments section.
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Posted by George Huhn on Sun, Mar 28, 2010 @ 08:29 PM
I do a lot of work in industries where there is a tremendous amount of proprietary and confidential information passed around in mountains of documents. It is the type of information that might help a competitor tremendously to shorten their development and cycle times considerably.
So, you’d think that these companies would be among the first to use encrypted electronic communications, but you’d be wrong. Until last week, I had not received an encrypted document from a single client or ever been asked about encrypting the data that they provided to me on my business computers (I do anyway). I have been in places where the companies have been extremely careful about controlling their paper documentation, but seemingly oblivious to the risks of sending those very same documents out in e-mails without any encryption or password protection.
So I must say that I was delighted to receive an e-mail from a contractor who had actually encrypted and password-protected the document attached to it. They even knew that they shouldn’t send the password and the document together in the same e-mail. That’s progress!
The lack of using even the most basic document protection when sending sensitive documents by e-mail is a fundamental security risk to these companies. Perhaps the reasons that they don’t do it are because of the effort that would be required by the IT department to develop and enforce a policy around securing documents sent by e-mail, the belief that a security breach due to interception of a proprietary document “won’t happen to them,” and the inconvenience of applying the security layer to each e-mail.
I wonder if they have ever done a cost risk analysis for implementing such a procedure. It would be an interesting analysis to perform because the cost of implementing a secure e-mail documentation system would have both fixed and variable costs associated with it. Fixed costs would include items such as developing the systems, purchasing the software, training, implementation, and monitoring. Variable costs would include the time required to secure each individual e-mail that is sent or secure only certain high-value e-mails.
They could justify the fixed cost based on a risk analysis. For example, if a security breach could $500 million and the annual risk of that breach was one-half of one percent then the expected annual loss is ($500 million)*(0.005) or $2.5 million. If implementing a security system costs less than that, it is a no-brainer to do it.
As an aside, I wonder how many people really think that those long wordy legal statements that are often attached to corporate e-mails claiming confidentiality are adding any security.
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Posted by George Huhn on Wed, Nov 11, 2009 @ 11:14 AM
We all want one of these buttons, right? Wouldn't it be nice to pry the "Help" button off your keyboard and put one of these in its place? When I want a problem solved, I don't want to look through dozens of menu items and forms, navigate through features I'll never use, and search through websites and PDF files.
I just want my problem solved. And so do your customers.
Two years ago, while everybody else was developing more and more feature-rich (and complicated) video cameras, a company called PureDigital released the point-and-shoot equivalent of a video camera called the Flip Ultra. It was small, inexpensive, simple to operate, and had only essential functionality. And it sold like crazy.
The problem it solved? How to get videos on the web easily and quickly without having to read a novel-sized instruction manual. Today, the Flip Ultra products are the best selling video cameras in the U.S.
Feature-creep and the resultant complexity are big challenges to many technology products. So instead of trying to improve your company's products and services by adding new features, what if you optimized them by removing some features and combining others?
What if your products and services could have only one button: the "Solve My Problem" button? What would it do? And since one button usually isn't realistic, what are the minimum numbers of "Solve My Problem" buttons that you need to solve your customers' problems in a delightful and surprisingly simple way? What if you prioritized your most important and fundamental customer benefits and then offered a product that delivered only those features and nothing else?
In designing our project portfolio management tools, we try to answer those questions every day. For example, we've reduced the effort of prioritizing your portfolio using Monte Carlo simulations to a couple of mouse clicks. If you can answer those questions while nobody else in your industry is even asking them, you may discover a whole new market out there waiting for you.
What are the best uses of your company's dollars and resources? Optsee
® can tell you. Optsee
® is a project portfolio management and budgeting optimization tool unlike any that you've ever seen.
Click here to find out more.