Home is where the smart is

Smart homes crop up regularly in technology news and trend reports, but many of the smart home products being launched aren’t that smart. MG recently visited user experience (UX) research firm New Experience to get the low-down on what’s going on this area. New Experience went into consumers’ homes to see how so-called smart devices were being used and found that what the industry bills as smart home tech is falling well short of the mark.

The problem is a familiar one. Tech firms develop revolutionary innovations and rush to launch new products, only to realise that they’ve overlooked a key part of the proposition: the user experience.

The history of innovation is littered with examples of products that failed due to poor UX design. Clippy. The Segway. The emailer phone (does anyone remember that one?). One example that nicely illustrates the point that you shouldn’t do something just because you can is the wearable DVD player, launched in 2004. It consisted of a pair of glasses with a screen built into one of the lenses (stand aside Google) and a relatively small DVD player that were connected by a wire, like an old Discman. Unfortunately it didn’t take into account that squinting myopically at a small screen for the length of a feature film didn’t go well with such things as walking, driving or anything really. Users complained of motion sickness and looked silly carrying around the clunky player. The wearable player was a UX nightmare.

Ten years down the line though, the firms in the smart home industry are at risk of making a similar mistake. Billed as ‘smart’, products launched in recent years connect users’ basic home systems to their smart phones, enabling them to control their home environment remotely.

What many of these products don’t do is anticipate or learn about users’ preferences properly- a key distinction between the smart and the connected home device say New Experience. This distinction is important because it makes the difference between a gimmick that will appeal to tech enthusiasts and a product that actually makes every day users’ lives easier.

Asking the right questions

Based on the consumer needs that New Experience came across while visiting real consumers in their homes, we list the questions companies should be asking themselves when designing new propositions. Where possible, we’ve tried to find an example of a solution that addresses the consumer need in question as well.

1. How can we avoid swamping consumers with connected home apps?

This first one is intuitive, but is still causing users problems. They don’t like having separate apps for each device in their home. It makes controlling it confusing. It also makes it a hassle – if not an impossibility – to get different systems to work together. Doing so requires a smart-hub, which connects all the different devices and ideally allows users to programme conditions into it – e.g. ‘when I’m on my way home in the evening, turn the oven on.’

The open architecture-based Ninja Sphere enables users to control any connected device through a simple touch interface and British Gas’ Hive – a 2014 Corporate Entrepreneur Winner for Best Market Disruptor - is an example of a smart-hub that works with conditional commands.

2. How do we address the needs of consumers who don’t carry smart phones around with them?

Surprising as it may be, not everyone carries their smart phone around with them all day. Some people like to have their phones charging continuously when in the house. Others may have a special spot where they put their phone after coming home. Whatever the case, this is obviously a problem for products that rely on a connected device to input commands, and creates a need for alternative ways of interacting with the smart home.

Amazon’s Echo is a voice-controlled home assistant that can answer questions and perform simple tasks, but doesn’t connect to home systems yet. A system that will be able to control home systems is Homey, a voice-controlled smart-hub that successfully got funded on Kickstarter last year, whereas Jibo, labelled as the first family robot, combines both of these functions into one.

3. How can we make systems that work for users who aren’t that engaged with technology?

One problem New Experience encountered had to do with the different types of user in a household. Households typically had a tech-savvy main user, with other users depending on this person to make any changes to their systems. In a truly smart home, this wouldn’t matter, because the home would know who was around and what their preferences were. Unfortunately, in reality this can result in the unengaged users being left in unlit and cold houses when main users leave.

4. How do we make our systems guest and family friendly?

Guests posed another user-related problem. Consumers mentioned that they wanted to allow guests to control the connected systems temporarily – particularly important in the case of a bed & breakfast for example. At the moment, if systems allow for multiple users, owners have the choice of giving guests unlimited access or not giving them access at all. Regarding access, it’s all or nothing for parents who would like to give their children limited levels of permission as well.

5. How do we address the elderly with our UX design?

The UX design for connected home devices usually doesn’t take the needs of the elderly into account, even though this large segment of the population could be served well by smart tech. This neglect results in elderly consumers often viewing devices – such as smart phones for example – as annoying or difficult to use. iPads on the other hand tend to go down well with their large icons and touch screens.

A partnership between Dutch and Chinese firms Green Peak and ZTE Health has recently set out to create smart home devices specifically targeted at empowering the elderly to stay in their homes for longer (up to 10 years).

How to get it right

Now it’s hardly surprising that smart and connected home systems are still a little clunky and may not be hitting the consumer need nail on the head. The technology is still in its infancy after all, and new innovations always take time to reach consumer acceptance. But there are things that companies can do to speed up this process and improve the odds of their proposition becoming a success.

What it all boils down to, is involving the end customer in each stage of the development process. This could mean talking to consumers to find the problems they have with current offerings. It could mean co-creating a solution together with end users. Then testing propositions with customers, and iterating based on their feedback. If you’re flexible with your design process, there are many different ways to involve customers. You’re only limited by your own imagination.

Firms in the smart home industry actually have an additional advantage in uncovering consumer needs. In this field in particular, early adopters have shown themselves to be keen DIY enthusiasts, rigging up all kinds of integrated home systems using services like If This Then That (IFTTT) for example.

Leaving you with one thought on smart home devices

So if we could leave you with one thought after reading this, it would be the following. Why not go out and talk to your customers? See what they’re doing in their homes (people like to show off their ingenuity). It’s a free way to find out what they want, and where you could be growing your revenues in the future.

 


Speed - the single most important factor to leverage in innovation

The best innovation comes from the fusion of three disciplines (insight, commerciality and design). While it doesn’t always make life easy, a team of people who bring these different skills can achieve amazing results – but the most important factor to leverage is speed. Here, Pete Sayburn talks to the organisers of the Intrapreneurship Conference, London and explains why innovation is a high paced endeavour and why it will most likely fail if it isn’t.

Pete, you are able to get companies to innovate faster. What is your magic trick?

The key to rapid innovation in big companies is confidence. Introducing new products or entering new markets feels pretty scary, so anything you can do to raise the level of confidence improves your chances of success. At Market Gravity, we do three things to give companies the confidence to launch new propositions:

First is prototyping – to demonstrate what it will be like to use the new product of service, and to show how potential customers react to the idea.

The second way is via the commercial case. The prototype and visualisation will provide the emotional rationale, but you still need to “show me the money!” Consumers in the early stage of innovation are not just valuable for testing; they can provide huge amounts of feedback – if they are engaged in the process.

The third element is engagement; you have to take the key people in the business with you. We keep the team size small, but we involve the managers who will ultimately own the new innovation throughout the design process, building ownership and incorporating their operational knowledge into the launch plan.

Why is it important to innovate faster in the first place?

Speed is the number one weapon in the innovator’s arsenal. It overcomes most of the causes of what we call “innovation death” in big companies. Without speed you risk missing the market opportunity and you can get stuck in that horrible cycle of corporate inertia, appearing at countless investment committees, but always coming away empty handed, promising to return next month with the answers to another round of pointless questions!

So it’s all about staying ahead of the masses?

Exactly! By moving fast, you have a chance to prove the market opportunity before everyone notices, you beat your competitors to the punch, and you learn so much more via iteration and market testing.

In your experience, what makes or breaks success of these innovation efforts?

There are several causes of innovation death in big companies and many are accidental. The single biggest cause in my experience is continuity of ownership. A great innovation is often reliant on a single sponsor or cheerleader and when these people change jobs or leave the company, great ideas are side-lined. Internalizing sponsorship within your company and getting an idea to gain traction fast are thus again highly important to successful intrapreneurial activities.

One success story is BTSport – the media offering from the UK’s largest telecoms company. It took almost 10 years from initial concept to full-scale market impact. But it had a consistent guardian in Gavin Patterson, initially head of the consumer division and now Group CEO. BT is now a credible competitor to Sky in the Pay-TV market.

Some companies try to copy startups and methods startups use to grow. What’s wise and what’s not that wise about that approach?

Big companies can gain a huge amount by adopting a more entrepreneurial mind-set and thinking like a startup. It makes them more customer-driven, with a single-minded and clear purpose. It also values action over strategy, getting into the market and learning from experience, rather than talking too much!

Finally, a focus on cost efficiency and how to make the best use of scarce resources keeps the team focused on what matters most. The other side of this is a risk of isolation. By standing apart from the core business, a new innovation might fail to take advantage of the wonderful assets and resources that a big company can provide.

Market Gravity organizes the Corporate Entrepreneur Awards. If you look to the past winners, what differentiates them from others?

Actually, the answer to that question is simpler than you would expect! It boils down to just one thing; the team. All the successful entries had wonderful team spirit, positive culture and shared enthusiasm to make the project succeed. It takes a huge amount of dedication, resilience, hard work and passion to be an Intrapreneur, so sharing this experience with a group of like-minded people seems to be the key to success.

What's the difference between a corporate entrepreneur and an intrapreneur?

I see the terms as pretty interchangeable – the most important thing is to recognise that there are highly entrepreneurial people in big established companies as well as startups and high-growth ventures. They make a very positive contribution to the world and I am delighted to see their efforts recognised and celebrated. That’s one of the main reasons to go the Intrapreneurship Conference, by the way!

Shouldn’t all employees be intrapreneurial?

There are always better ways of doing things and innovation should be valued in all roles, but I see the role of the Intrapreneur as something different. This is more about doing better things, and doing things better. It involves a level of uncertainty and experimentation than most companies (and their customers for that matter) couldn’t handle in many core business functions.

Big companies are very good at applying a consistent process to a well understood task or challenge at huge scale. The Intrapreneur’s role is to take the company into new areas, less well understood – to be the pioneer.

Why should delegates join your workshop during the conference?

We usually take around 60 days to drive a new idea from concept to prototype within a big company. We use some pretty interesting methods, tools and approaches and we take dozens of people on the journey. But 60 days still feels fast…believe me! In this workshop, we will be taking that journey in 60 minutes! So fasten your seat belts and enjoy the experience…

Find out more and book your tickets to the Intrapreneurship Conference, London.


Why utilities are failing to seize the smart home opportunity

As we kick off 2015, there is still massive interest in the Smart Home vision. At CES earlier this month there were hundreds of smart home solutions on offer from smart doors to connected coffee machines and still massive excitement about the potential of this market.

It is early days, but the vast majority of these are actually showing very limited growth. Smart monitoring and security systems have proven attractive within their segment, but with little sign of mass penetration, whilst pretty much everything else remains a hammer looking for a nail.

The fact is that manufacturers are busy trying to make their products smart, without really understanding the consumer problem they’re trying to solve:

  • Take lighting – Personally, I don’t have an issue turning lights on/off when I enter or leave a room, but the user experience of smart lights is actually worse with either of the 2 main technical solutions: If I choose smart light bulbs, which are actually more expensive than their standard cousins, I have to change my behavior (along with everybody else around me) to NOT use the wall switch which I’ve used all my life otherwise the smart one won’t work. Plus every time it blows, I need a new more expensive lightbulb. Or I can get an electrician to rewire my house with smart wall switches – not cheap! All for the ability to turn a light on or off in a room I’m not in.
  • Take the smart coffee maker – actually why bother. You get the point. Let’s move on.

The reality is that only one smart homes’ device is showing potential for mass market take-off right now. The smart thermostat.

Smart thermostats work because they genuinely make my life better – they save real money by allowing me to turn the heating off if I’m out and don’t need it, the interface is far easier to use than the old wall unit, which combined with the fact the controls are now in my hand whilst I’m in bed or on the sofa rather than always out in the hall, I can be more comfortable with zero hassle by adjusting the temperature when I want. Great.

Now the smart thermostat market represents a massive opportunity for the utilities.

  • Recent research by Park Associates found that 14% of US broadband customers plan to install a smart thermostat this year. That is tens of millions of customers.
  • Pike Research shows customers are 4 times more likely to look to their utility than any other provider for energy management systems.
  • Further, smart thermostats provide lots of opportunities to help utilities meet their energy efficiency targets, help customers manage their bills, and establish a base for the broader smart home vision (if that materializes!).

Yet… you think about smart thermostats, and you think Nest. You search for smart thermostats on google and you get the likes of Ecobee, Honeywell, even Home Depot – but not a single utility on the first results page.

Where are the utilities? With some searching, there are a few offering them, such as Reliant Energy, but none of them are taking advantage right now whilst there is an easy window of opportunity.

Come on utilities – let’s see some action!


What does it take to be a successful corporate entrepreneur?

A quiet transformation has been happening in the world of big business innovation, one that has, until now, been overshadowed by the much louder start-up revolution.

Corporate innovators are launching winning new products, services and businesses created with purpose, from 3D mirrors that help consumers make in-store purchase decisions at Rigby & Peller, to new ventures like Future Lab that turned LEGO into the biggest toy manufacturer in the world (2014).

These propositions are designed to have impact and those responsible are seeking, and gaining, recognition for them. Corporate entrepreneurs are hungrier than ever for success, both commercial and personal. And a drive to deliver new experiences is appearing across all sectors, not just among disruptive-startups-turned-digital-giants like Google and Amazon. So what do these innovators have in common? How are they driving a culture shift at board level, finally breaking the constraints of business as usual?

Characteristics of successful corporate entrepreneurs

  • Customer-centricity – Successful corporate entrepreneurs are more focused than ever on customer insight, realigning their businesses to deliver exceptional propositions
  • Boldness – They enjoy stepping outside of their comfort zone to challenge their thinking and take purposeful risks to create commercial opportunities
  • Empowerment – Individuals and teams working in innovation are winning their boards’ trust, gaining recognition that failure is a necessary part of the innovation process

Tami Hargreaves, Digital Consumer Payments for bPay, at Barclaycard, winner of the Innovators’ Choice Award at the recent Market Gravity Corporate Entrepreneur Awards, advises, "...learn fast, be brave, be courageous and allow yourself to fail, but learn quickly from it. Course-correct and pivot".

Embedding the role of the corporate entrepreneur

Corporate entrepreneurs are establishing and defining their roles within their businesses, with commercial growth at the forefront of their minds.

It’s not about clichéd teams in skunkworks, dressing down, sitting on beanbags and breaking the rules – these intrapreneurs work across all functions, from strategy to proposition design, technical and beyond.

Putting innovation at the heart of business

As innovation becomes embedded throughout their businesses, intrapreneurs are causing a corporate cultural shift and seeking recognition for the role they play in growing their businesses.

It’s not just about ‘me too’ products – they want to change their industries and the world with new innovations and ventures. Genuine, purposeful market disruption is on the cards from big businesses.

So what do we expect successful corporate entrepreneurs to be driving in 2016?

  • Greater emphasis on innovation culture, codifying innovation as a core pillar of their businesses
  • More incubation and acceleration to develop winning innovations in-house or in partnership
  • Increased emphasis on the customer, incorporating customers into the development process earlier and in wider, more creative ways, from co-creation to competitions and more

 

The big business revolution is finally stepping out of the start-up shadow and is only going to get louder.

What are you driving forward in 2016? What other traits do you think successful corporate entrepreneurs have? Let us know @Market_Gravity.

For the 6th year running, Market Gravity hosted its biggest 2015 Corporate Entrepreneur Awards. Over 400 of Europe’s most creative and disruptive entrepreneurs joined us in London to celebrate big business innovation. We saw a record number of nominations this year, with over 100 submissions across the four independently judged categories. A range of industries were represented across the awards categories, including automotive, charity, oil and gas, beverages, financial services, real estate, hospitality and gambling.

Read about the winning innovations at the 2015 Corporate Entrepreneur Awards here.

Hear what the winners had to say in our highlights film.


Building a new joint proposition with the Bank of Ireland and Post Office

We recently worked with the Bank of Ireland and Post Office to build a new joint proposition, taking them through our Discover, Design and Deliver methodology.

In this short video, Richard Exton, Head of Transactional Banking for Bank of Ireland and John Willcock, Head of Financial Services for Post Office reflect on why they chose to work with Market Gravity and how they found the experience.

https://www.youtube.com/watch?v=ylr2GNPCxGo

What did the project entail?

We worked together over a period of six months, taking their identified opportunity through each of our three stages of proposition development. In Discover, we built customer and market insight around the opportunity and used this to generate ideas and concepts. In Design, we developed the concepts further into the proposition, customer experience and a lo-fidelity prototype. In Deliver, we further tested and built out the proposition in more detail, developing the operating model and go-to-market plan, ready for the Build phase to begin.

To find out how Market Gravity can help you, get in touch with David Cowser - david.cowser@marketgravity.com.


Retailers must embrace the omni-channel approach to customer satisfaction

Our 2015 Innovation Insiders Index combined thousands of industry insiders’ assessments to gauge the effectiveness of UK big business innovation. It also compared how companies from different sectors tend to perform against our six principles of innovation – including the retail sector.

Despite the continuing growth in digital retail, we found that Amazon and Argos (part of Home Retail Group) were the only retailers to make the Index’s Top 30. Retail as an industry didn’t score highly against any of the key innovation principles; in fact it even came last for “purpose” and “customer focus.” This suggests that the growth in this sector only reflects increasing consumer appetites, rather than active improvements from the big players.

Stepping up to capitalise on an omni-channel market
Many retailers are now at home with multi-channel retail, delivering parallel channels that allow consumers to shop how they want. But a true omni-channel approach takes this to the next level, ensuring a seamless, consistent experience across all available platforms. Customers might start in one channel and swap to another as they move towards buying, or even use different channels simultaneously (like googling on their smartphone as they stand in your store).

In a recent survey, 84% of respondents reported using digital before or during their most recent trip to a store* – and many UK retailers have embraced this trend. Argos is the pioneer of “click and collect” stores, while fashion retailer Hobbs shows which stores have which clothing sizes. Meanwhile, Next offers next-day delivery for online orders made as late as 9pm the previous evening, and Amazon has a special two-hour delivery service for London addresses.

How should retailers adjust to omni-channel as the new normal?
The most effective omni-channel approaches are based on understanding what the customer wants at each point in the purchase process.

Thomson’s holiday shop brings the retailer’s digital credentials in-store; it offers interactive maps and tables for customers to research locations, weather and leisure activities, alongside an advice bar with sales assistants. This reflects the findings of the survey* that customers not only tend to research using their smartphones while physically inside stores – but would also love to use unmanned kiosks and digital displays rather than make small talk with sales staff.

This integration flows both ways: previously online-only retailers are looking for a high street presence. For some time, Amazon has offered customers lockers to pick up and return items; this year they will open a store in New York, as has mail subscription beauty box Birchbox.

What’s next in omni-channel advances?
Another 2015 survey** showed that two out of three consumers are interested in virtual shopping, with 63% saying that VR technology would change the way they shopped. And it’s not just a consumer trend: purchasing agents and procurement professionals are also expecting to benefit from the effortless integrated experience of their personal purchases. They’re requesting services such as ship-to-buyer and a high quality in-store pick up solution…

Our take on retail
There’s no end in sight for retail’s rapid changes, with new technological advances and the advent of omni-channel selling for B2B. We say retailers must ensure they’re focused on their customers’ experience with their brand, and have flexible delivery methods to anticipate ever-increasing demand.

Download the index for more commentary on the state of innovation within big UK retailers. And let us know what you think – what else should big retailers be considering in a brave new omni-channel world? Join the conversation on Twitter: #innovatebig #6principles

* The New Digital divide, Deloitte, 2014
** Reinventing Retail: What Businesses need to know for 2015, 2015


Empowerment to the people

How can big businesses get back to the innovation and execution efficiencies they need to compete in the aggressive global markets of today?

In my last blog, I discussed the role of growth in cities and big business and concluded that big businesses across the world struggle to grow, due to inefficiencies in their operating model.  Furthermore that this was driven by falling transaction costs and that now was a more important time to innovate than ever before.

I’ve recently been listening to Creativity Inc. the story of Pixar told through the eyes of its president, Ed Catmull.  One of the key themes he discusses is the idea of empowerment of its employees, but how does one stimulate this whilst not losing control and momentum.  Enabling people to feel empowered through accountability and responsibility for their work yes, but there is also need to create passion.

Reflecting on many big businesses that I see today, hierarchy and operational performance metrics take passion away from frontline employees, who wish to deliver for their customers.  Whilst many managers want their employees to have this empowerment and passion, they also have concerns that creating these ‘flatter’ structures may destabilise the operating model into chaos and losses.  So how can this be avoided?  Holocracy may hold the key not just to getting the business to be more passionate about its customer, but also to unlocking innovation and growth.

Holocracy is an organizational operating model that removes hierarchical control within an organization whilst delivering clear accountability.  The holocracy model actually has more structure than the traditional hierarchical managerial models, but does this through creating smaller highly accountable and empowered teams with clear remits.  It shouldn’t really be a surprise that this model has emerged, considering the paradigm forces that advances in communication technologies have driven (see my previous blog).  There are many examples of businesses that are seeing success and sustained profits using this model, from Uber and Airbnb to Zappos and even Ed Catmull describes Pixar’s success through an organizational model such as this.

In my previous blog, I also discussed the role of social networks within cities as a key driving force for faster innovation rates and how innovation is generally much slower in big businesses in comparison.   So here’s the kicker, if senior managers want their businesses to innovate and grow faster they need to create ‘flatter’ organisational structures that empower their employees to take responsibly and become empowered so they can in turn empower their customers.

At Market Gravity, we are experts at empowering teams in big businesses to work together and make big ideas real, if you'd like to find out how get in touch.


Innovation in the automotive sector - there's room for more.

Our very first Innovation Insiders Index rated UK big businesses on their effectiveness at innovation, as assessed by industry insiders. It also offered a snapshot of how different industries performed against our six principles of innovation, identifying distinctive sector approaches. Today, we’re taking a look at the automotive industry.

What’s driving automotive today?
The Index indicated that big automotive players are focusing their use of innovation on the pursuit of luxury. For companies like Jaguar Land Rover and Rolls Royce, the top priorities are customer experience and refining their expertise heritage, while they reinvent themselves as global luxury brands.

They’re relying heavily on internally-driven characteristics: in terms of our innovation principles, these are Capabilities and Competitive advantage. They’re successfully leveraging their huge experience and expertise as well as their companies’ scale. But the Index also highlighted the relatively low willingness of this sector to collaborate with other businesses and embrace cross-industry ideas.

What’s facing them on their journey?
Consumers no longer see cars merely as a mode of transport: they expect an entertainment and communication space that supports their busy lifestyles and keeps them connected. At the same time, both our demand for cars and the way we buy them is changing. With increased urban living (60% of us are expected to live in towns by 2030) the vehicle types wanted is evolving, while consumers expect a seamless experience through pre-sale, sale and post-sales via the channel they choose, rather than uniformly queuing up to be served at the showroom.

Challenges and opportunities
We believe that embracing collaboration with the technology sector – an industry that’s more than keeping up with changing trends – could hold the key for automotive. But will this relatively lumbering sector (cars can take years to reach the market) need to adapt its business model to accommodate the rapid and agile style of tech?

Automotive brands must get creative about incorporating tech into vehicles. Offering subscriptions, regular upgrades or in-car streaming systems could help cars keep up with the outside world. And allowing cars to become part of the growing Internet of Things could encourage consumer take-up of such paid services. Plus there’s the telematics factor: collecting and using data from in-car sensors and GPS systems. It’s already starting to take off, with EU regulations requiring new cars to have eCall technology by 2018 (which alerts emergency services to serious accidents) and BMW offering a similar private service. The RAC and some insurers are using telematics to encourage better driving behaviour…and there are plenty more potential applications.

We’ve already mentioned that this sector got low scores for collaboration in the Index: you can see this in how car brands are still developing bespoke systems in isolation, like SYNC, Ford’s communication and entertainment system. By the time such systems get out on the road, they’re already behind the times. And it swims against the current of the tech market, where smartphones are being used as connected displays, for services from home heating to security cameras.

Forming cross-industry partnerships could transform this approach: Apple are already working on a car iOS: Carplay offers seamless music, calls and navigation. Or in a more concrete example of customer service, dealerships could offer added value by teaming up with tech gurus and style consultants to fully integrate your car purchase into your lifestyle and allow you to fulfil all your related needs at one touchpoint.

Our take on automotive
We believe that any move the automotive industry makes towards its high-tech future should be directed at fulfilling consumer needs. And it’s more than likely that car brands will need a co-driver for this journey – most likely a mobile or tech company.

Download the full Index to see more of our commentary on how the automotive industry’s using innovation today. Tell us what you think – how else can automotive brands innovate and meet consumer demands? Join the conversation on Twitter: #innovatebig #6principles