The epistemology of innovation is somewhat strange in regard to objectivation. As the appreciation of a design is subjective, one has the rather strange relation that the objective of a reasonable design approach is again a reasonable decision. However, this decision is but taken as a fact. Therefore, the usual objectivation by physical evidence disappears—or is paradoxically already included within the design approach. This seems to be a bit dubious yet promising for a reasonable marketing and the overcoming of the innovation barriers.
This peculiar self-reference of a design approach helps to generate, perform, and offer something suitable because the designer does already represent characteristics of a probable customer, too. Scientifically, this works like a mirror in the middle of the divided line allegory between facts and reason, which displays each notion immediately by a reflection. In that way, the innovation path is bent to a loop (see Figure 3.23).
More than that, innovations become probably usefully executed and applied, because they already satisfy the needs and expectations of the original inventor by means of that short cut. That way around, it is not only inevitable that there is always some idolized illusion involved in innovation marketing, but it turns out to be advantageous. If the stakeholders are enthusiastic about the marketing perspectives of an innovation project, the success seems to be tangible.
Literally, design stands for a line-drawing, a graph or any other pictured designations. Originally, it just implied the shaping and the configuration of things, like bridges, buildings, machines or clothes. Meanwhile, arrangements and layouts for mental concepts are comprised, too. And sometimes even sketches for comic or film strips are designed, nowadays.
In general, design is subjected to the class of comparative truths, like beauty, charm, elegance or classiness. And these esthetic points of view seem a bit inappropriate for a veritable scientific objectivation, since it is commonly agreed that there is no accounting for taste. Although the whole industry sector of fashion works hard to find an annual vogue for the taste of people, all attempts failed to seize those trends theoretically, so far.
There are indeed claims for a design theory; however, no scientific method is known to verify a result objectively. Accordingly, design instructions correspond to the operational methods known in arts and esthetics, which are oriented to man’s impression. And they are based on several design functions, like ergonomics, information, symbolism, structure, psychology, intuition, didactics or meditation.
In particular, the Kano model provides an approach by quality management to seize the different aspects of customer satisfactions in a measurable way [69]. It is based on the determination of two factors by a subjective evaluation of the customer, namely, the perceived implementation of a feature and the acknowledged satisfaction with that feature [70] (see Figure 3.24). This leads to a better understanding of the driving expectations for customers and thus indicates improvements for the design.
For example, the performance quality is based on the assumption that the perceivable implementation corresponds almost linear to the subjective satisfaction, because a customer is generally more satisfied with a higher performance. This is mainly due to the features with a physical extent, like service time, range, size or even inversely smallness of a designed object.
But there is also a must-be quality, which does not satisfy anymore, if a certain level of satisfaction has been already accomplished, yet dissatisfies, if an inferior implementation is perceived. This is mainly due to the features for security and reliability, like protective functions or robustness.
Then, there is also a delighting quality, which inversely does not dissatisfy, when missing, yet disproportionally satisfies, when perceived. This is mainly due to supplementary features—especially for free—like giveaways, individualized designations or a personal configuration.
Finally, there are quality features without any impact on the satisfaction or maybe even a cause for some disappointment, because they are only perceptible on failure, like an implemented tracking, a surveillance or control system of the manufacturer, which is useless for the customer, yet kind of troubling.
Obviously, the evaluation by the Kano model turns out to be quite useful for some objectivation of the design for the marketing of innovations.
In particular, innovation design has the basic task to surmount the barriers of marketing. The more a customer has to accustom him- or herself with an innovation, the harder will be its introduction to the market. Or, contrariwise, the easier a novelty fits into the sociologic, technologic, economic, and politic conditions of a human living, the earlier the innovation reward will be obtained. By design, a practical debate about needs and desires of customers can take place without the loading of a theoretical overhead. And pragmatic solutions for the marketing of innovations become available without the restrictions by methodical instructions.
More than a mere packaging of different blanks, like in fashion, innovation design has to include several industrial functions for the processing, the quality, the production, the development, the communication, the service and many more. Again, all the aspects of innovation projects have to be considered under the purpose of marketing. In consequence, the number of possible design functions matches the number of different influences for the mentioned phases, success factors and promoter categories of the project case, namely almost infinite. And the urge for a design is due to the expectation that it provides a reasonable solution for a significant choice within a foreseeable period. That is why design is basically a multidisciplinary event.
As the general design procedure is basically a cyclic sequence, it can be described by subsequent phases, as explained for the management cycle of projects before. Hence, the initial step is a design conception by an exploration of the requirements. Later, there are similar tasks for design organization by a feasibility study. Then, there comes a design planning and a testing. And at last, a controlling follows and—if the target is achieved—the launch of the product. If this sequence does not yield an approved result, the whole procedure has to restart and to be repeated all over again, until a satisfactory output is obtained. This iterative approach seems to be rather appropriate for the enclosure of a result within a fuzzy area by some sort of spirally winded encircling.
Design Thinking is a particular procedure of alternating divergent and convergent phases. During a divergent phase the task is to generate as much designs as possible, which are subsequently focused during a convergent phase to a primary design version, executed as tangible as possible. This version is collectively examined in order to obtain a common understanding. Upon this improved comprehension further designs are generated during another divergent phase, which are subsequently focused again during a convergent phase by a refined version. By repeated matching of mental concepts and of their tangible execution different design functions become implemented gradually.
For instance, the first version may be a simplified model of the innovation, like a product prototype or a pilot study, in the case of a process design. This prototype or pilot contains some first design functions, which can be examined now for fact, for example, according to the geometry, packaging, esthetics or other impacts and interactions. Nowadays, early demonstrations are feasible by means of computer simulation, which accelerates the prototyping process considerably. And by rapid prototyping even a three-dimensional and therefore objective version becomes available for an improved examination. In regard to complex products or processes, like built-in furniture, homesteads, cars or production plants, a successive enhancement of versions is also applicable to gain some attraction and related knowledge about customer restraints for an improved marketing.
Usability Engineering is another special approach for such customer-oriented design. Although this concept is mostly applied for software development, it has become also applied for convenient goods under the tag of User Centered Design. This approach also contains standardized process models with a prescribed sequence of phases [71]. Basically, it starts by a profiling of the intended customer. In a second step some suitable requirements and features are derived according to that profile. Then, a tangible design version is produced, which can be discussed with several representatives of the intended customers. And finally, the prototype or the pilot study is repeatedly improved and tested to achieve a collective appreciation.
For instance, these design studies are mostly organized as workshops, in an innovation lab or an innovation factory. Such a suitably equipped accommodation permits interpersonal contacts, stimulating conversations, spontaneous presentations or even devices for the prototyping and an access to information systems. The design of such design workshops is a special challenge with respect to the human needs and related sentiments. In that way, the design for market seems related to Kant’s categorical imperative: “Act only according to that maxim whereby you can, at the same time, will that it should become a universal law.” [72].
In particular, Human Centered Design is an approach to include as much as possible people with different backgrounds for the purpose of a design process, for instance older and younger people, men and women, professionals and laymen, engineers and salesmen, conservative or progressive minded, and all kinds of nuances in-between and beyond. In that way, common interests, needs, and sentiments of customers become involved.
For example, the company IDEO is repeatedly counted among the most innovative enterprises in the world and offers innovation consulting on the basis of a high diversity of consultants for design of trademarks, ergonomics, health, industry, interaction, communication, food, machines, software, business, environment, and many others [73].
A further design concept is labeled Co-Creation by Prahalad and Ramaswamy to include customers directly in the process of product design [74]. Especially for consumer goods this becomes increasingly feasible by a utilization of Internet platforms, like forums, blogs, wikis or other web-2.0-technologies. Such novel Internet services try to allocate a large amount of Internet users by cloud computing and exploit the collective intelligence for an improved design of the software, of the layout, of the service and even of the hardware, like the Arduino board. Although a similar cooperation has been commonly used for the purpose of industrial goods, it has now become available by new Internet technologies and a feasible cloud sourcing. And it seems apt to disrupt the way business is executed in marketing.
Lesson 20
The innovation reward is always due to human appreciation!
3.2.4Opening
Freedom is always the freedom of dissenters.
from: The Russian Revolution—A Critical Acclaim by Rosa Luxemburg 1930
When being disclosed to an open market, an innovation has to undergo assent or dissent by the public. Hence, marketing is always connected to some liberalization, literally meaning freeing and eventually understood as well as a disclosure, an opening, a sharing or a release.
And when an innovation is released, all promoters are welcomed to participate freely in shared applications and open appreciations. On that occasion, the related categories for marketing exceed considerably the identifiable number of barriers, phase changes, and design functions, which have been previously considered.
Therefore, marketing promoters tend to prefer a general liberalization – yet, with due respect to private property as a civil liberty protected by the human rights. Thus, every community has to find a way to constitute, govern, and rule the border between a factual property, on one hand, and the reasonable freedom, on the other. And the utmost dilemma is about intellectual properties, which concern science and innovations.
Knowledge itself is a volatile good because the products of knowledge belong to those particular resources, which increase, when being shared. For example, ideas, theories, science, and education are rather quickly dispersed by speeches—as all scientists know. Therefore, industrialized countries generally grant a copyright in order to protect the investments made for inventions.
This has been a reason for an ideological quarrel with the former Soviet Union, where they arguably concerned themselves more liberal and free, because they had fewer rights on private as well as on intellectual property. Everything was deliberately considered for free interchange and unsolicited application on the market. However, when it became evident that only few people were actually interested in such a freedom, some communist governments claimed to possess the right wisdom, yet not an equally wise population—and consequently send many their citizens to re-education camps. This may be logically a sound conclusion, however totally inacceptable for marketing.20
Regarding the marketing of innovations, a similar paradox becomes obvious: Intellectual property rights are a legal barrier, deliberately erected to cause exclusivity and thereby a special economic reward becomes achievable in order to support certain remuneration for the investments of an innovation project. But therefore, supplementary work packages become necessary for the elaboration of the claims as well as for a supplementary inspection of other patent claims concerning the same purpose. Consequently, surplus expenses are mandatory to establish and to surmount these barriers. Hence, it is again arguable, if liberalization or circumvention of those barriers would be a clever way to save money. And occasionally it is argued that without exclusivity the marketing of innovations would be promoted to an extent that even a higher remuneration could be achieved.
It has always been a management duty to watch out for inexpensive knowledge, gratis ideas or cheap intellectual competences. In fact, such intentions are supported by public subventions and by related promotion projects according to science and technology development, research institutions and sociological information. In accordance with the design of innovations, an enhanced involvement of the population by some public-private partnership (PPP)—comprising the plurality of individuals and the wisdom of crowds—is extraordinarily apt to surmount the barriers for the marketing of innovations. Therefore, liberalized economies are mostly stronger than regulated markets [75].
In particular, Open Innovation is a concept brought forward by Chesbrough to manage the exchange of knowledge, which is required for an innovation [76]. By this approach, innovation management becomes an immaterial product itself, which can be handled, traded, and marketed by the related services. The ideas, the experience and the knowledge get merchandized as intellectual goods, with the surplus value of saved re-creations, re-generations, re-experiences or even re-failures. In that way, innovation management may be even outsourced to a consultancy. And innovation managers become innovation consultants—again with probable advantages for savings, crowd sourcing, and marketability.
Obviously, open innovation is closely connected to knowledge management. The special advantage of external consultancy is a broader experience and a wider network of the whole market and its different players. In particular, use cases, best practices or success stories become available without the usual restrictions of mutual benchmarking [77]. The related categories can be discerned according to four processes (see Figure 3.25).
The closed process concerns the usual way to care about with the particular features of an enterprise and to pursue the interests of a particular sponsor. Those ideas, those technical skills and the related knowledge about the markets become clearly elaborated and confined, which seem particularly inventive and deserving some protection. This is obviously the traditional way to practice knowledge management for innovations.
For example, an audit may identify the experts and their particular competences. Their profiles can be concerted by specific knowledge circles. And this process can probably be supported by some knowledge engineering, that is, the allocation of the disperse knowledge by means of electronic data processing, of document analysis, of data mining and of crowd sourcing—at least, if the participants of such an endeavor are open for a faithful and dedicated collaboration.
The challenge of the closed process is to get access to the tacit knowledge of people, that is, the individual expertise inside the heads. As already revealed for the elenctic method, the availability of consciously known things is limited to the practical use and the awareness of it. However, most knowledge drowses or hides unconsciously, implicit and hidden, and is therefore not apt for an explicit handling. In addition, open knowledge is not very hortative for employees since its dispersion may lower the appreciation of the white-collar jobs. Thus, it requires a certain incentive to spur the motivation for sharing knowledge, like a bonus system for serviceable contributions to innovation projects and marketing.
Figure 3.25: Management processes between two knowledge spheres.
The inside-out process for open innovations concerns the proliferation of internal knowledge to external parties. The general problem here is a kind of a pig in a poke deal: The external party does not know the fair value of the purchase, yet has to pay in advance, because the internal knowledge will lose its special value in the very moment of transfer. In some cases, it may be better to sign a non-disclosure agreement (NDA), in order to prevent any further proliferation. Yet, in other cases, it may be advantageous to spread some insider knowledge gratuitously, for instance by publishing, in order to remove some innovation barriers. In any case, the price for information is arbitrary.
For example, an ample announcement of business ideas, intentions, strategies or even of technical solutions can be helpful to inform and to inspire the potential customers. Additionally, other actors on the market may be interested in a useful cooperation or the equipment may become cheaper due to the rule of scale. Especially, the fields of ecology and recycling are topics for cooperation beyond competition, but provide some advantageous public relations for the marketing.
The challenge of an inside-out process is to ensure remuneration as sort of an innovation reward. The announcement of novel technological features can cause appropriate regulations by time or support the timely implementation of convenient standards, like pins, sizes or transfer rates for electronic appliances, which limit the diversity of devices. As explained for innovation design by the Kano model, these features have mostly no impact on the customer satisfaction or may even cause some disappointment. They are negligible for competition, yet convenient for common— improved or profitable—solutions at marketing.
Inversely, the outside-in process concerns the appropriation of external knowledge, be it by purchase or by consequential costs. Even without transaction costs, there are still expenses for consulting, management and implementation of the knowledge to account for. However, external knowledge may provide exactly the missing inspiration or link, necessary for successful launch and marketing of an innovation.
For example, many manufacturers of industrial and consumer goods have established a web portal to introduce and to discuss suggestions and possible solutions in an early stage of development. And similar platforms are dedicated to exchange the knowledge for technological solutions, be it open-source software like Linux, or be it open-source hardware like Arduino. For example, during the development of the market for electronic CCD cameras, the camera manufacturers had to internalize electronic knowledge as well as the electronic companies had to acquire appropriate camera knowledge, such as Nikon and Sony, respectively.
The challenge of the outside-in process is to gain new competences without losing the inherent cognizance. The announcement of a novel business field can help to spread the risks and to establish a secondary application for the overhead expenses as well as the creation of probable synergies—a daily business for top managers at global players like General Electric or Nestle. Yet, it may also cause high losses, if the acquisition does not fit with the original purchaser, like the merger of Daimler and Chrysler between 1998 and 2007. Sometimes it seems better to restructure the acquisition in a more marketable way like Google becoming a part of Alphabet Inc., which has been genuinely established by Google itself. There are obviously no bounds for reasoning in marketing.
Finally, the coupled process concerns the mutual exchange of knowledge. This is especially promising, when there are correspondingly mutual interest, yet different aims, like shared computing centers for Internet enterprises. Ideas can be discussed openly, technical solutions can be compared freely and mutual interests can be marketed deliberately. Favorably, each partner of a coupled process obtains better conditions for the pursuit and for the marketing of the own innovation projects.
For example, a joint venture helps to spur the sales or even permits the entry on restricted markets like China or Russia, like for the automobile or the oil industry. Sometimes, the appropriate activities and the competences are released to form a new company of mutual investment, like the Airbus Group formed by Dassault, Eurofighter, Arianespace, and others. And a joint development promises enormous savings in high-end technologies, like the pursuit of a common open compute project (OPC) by Facebook, Intel, Microsoft, Apple, Cisco and others [78].
In particular, supply chain management is an option for mutually beneficial coupling, as complex products are assembled by a vast supplier cascade, structured by several levels of tiers. Sometimes an original equipment manufacturer (OEM) of automobiles, aircrafts, computers, or satellites has just some percentage of in-house production that requires an intense coordination with the suppliers, who have similar coordination projects with some other OEMs. Although the majority of innovations is developed by the suppliers, they are still marketed by the OEM, in general.
Candor and curiosity have been always a prerequisite for each innovation. Candor is required to surmount the innovation barriers and curiosity is helpful to find the suitable solutions. However, an innovation project generates usually more knowledge than strictly necessary to obtain exclusivity and a unique selling proposition. And inversely, other innovation projects may fail, because the knowledge to generate seems too expensive. Therefore, an exchange of knowledge may help to establish a certain compensation for that dilemma.
The main problem for such form of mutual consultancy is a certain alienation of the work and the corresponding responsibility. Although the shared knowledge is handled by consultants and may serve as basis for a next business case, the responsibility still remains at the enterprises and their respective executive managers. A failure of consultancy can be only attributed to defective methods and not to a forthcoming business deficit. The failures have to be sustained by the enterprise, its employees, and its investors. That is why the categories for an open innovation are just and only due to the processes of consultancy for innovation marketing.
They do not guarantee a successful release.
Lesson 21
Openness facilitates innovations, yet by reducing exclusivity!