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Selling Innovation Insight 2 May 05 I recently accepted a new position as the executive director of Babson’s Research Center on Innovation and Corporate Entrepreneurship (ICE). In that capacity, I now find myself doing something that I’ve often written about – helping launch a new service offering.
As we all know, writing about something is very different from doing it. Mark Bonchek, of Tapestry Networks, suggested that I might productively apply the frameworks I’ve developed during the past several years to the service that Babson is launching.
It turns out he’s right. I can use the four factor framework to gain some insight on where we might find the most likely customers for our ICE research consortium.
Taking my own medicine
Background
In 2003, Professor Tom Davenport and consultant Larry Prusak wrote What’s the Big Idea: Creating and Capitalizing on the Best Management Thinking. The book described how successful idea practitioners translate ideas into results for their companies. They found that the academic consortium structure was one of the most effective ways for companies to test out and bring effective new approaches into their organizations.
Professor Davenport leads the research initiatives at Babson’s School of Executive Education. The ICE Center is the third research center that he has helped launch over the past three years. All the centers share the conviction that new management ideas can make a significant difference in corporate performance. Our goal in the ICE Center is to identify and develop those idea so that our consortium members can effectively apply them to improve their growth and profitability.
Where is the customer?
Prior research on innovation indicates that we’ll be successful when we find customers for whom this program fills a current need better than existing offerings. Using the four-factor framework, we can compare the ICE Center consortium with other services that might have similar features.
Innovation conferences are plentiful, and most of them are of very high quality. For a relatively small investment of time and money, these conferences expose attendees to a variety of approaches, examples, and solutions around innovation topics. They are well-publicized and easy to attend, and require minimal commitment.
ICE vs Conferences: High Benefits, High Barriers
The four factor model indicates that the ICE consortium is not a particularly compelling substitute for conference attendees:
Ø Benefits are higher. The structure and content of the consortium will enable members to apply new innovation thinking with a higher degree of commercial success. Ø But barriers are higher as well. The time commitment that we ask from our sponsors is larger, and the fees are higher than attending a conference.
For conference attendees, the profile of the ICE Center resembles the classic launch profiles of many consumer-based products – provide higher performance for higher investment. Sometimes this approach succeeds (as with the Apple iPod); often it does not.
A few companies devote considerable resources to improving their innovation approaches. Some of these companies contract with academics or research institutions to undertake studies which they use in their own companies. For these organizations, the services provided in the ICE Consortium may be quite compelling.
ICE vs. solo development: easier and cheaper
Ø Per-member costs are quite low relative to solo development because the fixed costs of undertaking research are spread across the whole consortium;
Ø Centralized management and oversight of the research projects ensures quality of the results;
Ø The consortium structure lends momentum to successful applications. Because a number of companies can apply the findings at the same time, there’s a natural network for identifying the most effective adoption path.
The benefits of consortium membership are different from those that come from custom research and development. In a custom effort, the company tailors the work to its own precise specifications. Results from consortium research will be less company-specific.
Often, this results in more useful results by providing a wider base for the findings. But because the benefits are different from those in custom research, we’ll score the consortium benefits as on par with custom research.
Applying the four factor framework has allowed us to set some expectations and target some potential customers. Over the next several months, we’ll be testing these predictions to see how well they are borne out in the market.
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