Innovation 101 – The New Role of Context

by Sarah Miller Caldicott

Innovation 101 - The New Role of Context“Today, for only a few hundred dollars, we can hold in the palm of our hands smart devices with computing power that 10 years ago would have cost more than $1 million. With gigabytes of storage capacity, anyone with a smart phone, a laptop, or a tablet computer can generate and analyze huge streams of data for just a few hundred dollars – data that would have cost billions of dollars in the 1970s. Smart devices today are a million times cheaper and a thousand times faster than anything available 30 years ago.”

Ray Kurzweil, famed technologist and author of The Singularity Is Near – a controversial book predicting that machines will best human intelligence by 2025 – spoke these words in an October 2011 speech at the World Technology Network conference in New York City.

Crystallizing the mind-numbing advances in digital technology driven by Moore’s Law over the past three decades, Kurzweil puts into perspective a new form of complexity impacting all innovators today: the immediacy and scope of data capture. Data is everywhere. We generate mountains of it every day, through daily Tweets. Facebook posts. Photo sharing. Music downloads. Streaming movies. Joining LinkedIn groups.  Making purchases on Amazon. The list goes on and on.

As Guy Blissett a senior leader within IBM’s Wholesale Distribution group noted to me in a recent interview, “Data is increasingly at the heart of just about anything we do. Now, almost every interaction is quantified. Need something from a store? You can check online to see it it’s in stock, then purchase it virtually. Want to rate the store’s website? Complete their survey, then tell your friends about it on Facebook. Want to evaluate car insurance? Go to YouTube and see if there’s a video for the brand you have in mind. We have to become comfortable with more data and more technology. But for a lot of people, that isn’t their normal state of being.”

Indeed, grappling with more data and more technology may never be a ‘normal’ state of being for everyone. But it is rapidly becoming the ‘new normal’ state of being for innovators.

Per Steve Teig, CEO of award-winning software company Tabula, the quantity of data generated in a single day globally exceeds several zetabytes, with one zetabyte roughly equivalent to “every movie ever made, every five minutes.”  Big data and what is now being called data science are changing how innovators think about numbers, how we look at patterns, and how we look at industry boundaries. As data rises to become a center-of-the-plate phenomenon, we need to step away from old notions of industries as static forces, and recognize a new framework which I call “customer context.”

To glean insights about the power of customer context, we can look to many of the past successes of Thomas Edison and Steve Jobs, and to Intel for current examples of how we can begin tapping customer context now.

Billions of Data Generators Walk the Planet

The world’s growing collection of smart devices – now numbering in the billions – constitutes a walking army of data generation nodes. The data pools yielded by this mobile army are contributing to the disappearance of familiar industry boundaries in virtually every field.

For example, consider the banking customer who used to visit their local bank branch for multiple transactions but can now use their smart phone to scan checks for deposit into their account, in seconds. They can pay bills from any smart device, transfer funds between accounts, even virtually authorize ‘buy’ or ‘sell’ transactions to their broker.

In a speech at Research Triangle Park given in April 2012 by Bill Rogers, CEO of SunTrust, he commented on the vaporizing of industry boundaries powered by this data feast.  Rogers noted: “The traditional boundaries of banking have been muddied. Customers no longer have to come into a physical banking location to deposit funds or get cash. Roughly two thirds of all bank transactions today are electronic. SunTrust now competes not just with the bank down the street, but with Facebook and PayPal. We find ourselves requiring new tools just to analyze where we are, and where we want to go.”

For innovators, the rise of data and the evaporation of industry boundaries means we must embrace new methods for understanding customers, as well as finding new modes for developing leading edge products and services in an accelerated way.  The use of customer context aids us here.

What Is Customer Context?

Rather than a linear process which involves protracted stage gates and specific milestones in time, think of customer context as a playing field, a roughly bounded space in which many different kinds of activities or customer interactions can operate simultaneously. Rather than conceiving of what a target audience or user community does as discrete and bucketed, customer context encourages us to begin looking at streams of activity within an expansive nonlinear framework, connecting clusters of needs with new patterns emerging through previously captured data as well as realtime data.

Customer context is framed by a core question, or set of core questions, which ultimately drive breakthrough insights into what products or services can be developed for a targeted group, or user process.  The nature of customer context is intentionally dynamic – it becomes a playing field that you and your target prospects iteratively define together over time.  The tricky part is that sometimes this iterative process is conscious and directed, while other times it involves what can feel like uncomfortably wide-ranging experimentation.

Unlike “traditional” research formats, customer context embraces the importance of data patterns, linkages between human behaviors and technology (new or existing), and a desire to shape or shift how a given target audience or collection of users views the benefits of what they are doing.  Thinking about context engages us in a different starting point than “knowing” what the industry boundaries are, or even what the value proposition may be as this iterative process begins.  An understanding of customer context uniquely offers a rapid iteration and collaborative learning framework in which product development can be accelerated.

Here are two examples which illustrate ways to begin engaging customer context. Think of the development of customer context as an activation mechanism which allows innovators to examine user patterns and behaviors with a new lens.

1) Ask a new question: When Thomas Edison (began experimenting with incandescence in 1878, more than 40 years of data already existed about what scientists had discovered did not work in creating incandescence itself.  Rather than treading the same path as his predecessors, Edison began his explorations by asking “How do substances burn?” rather than rehashing what others had asked, namely “What substances will burn the longest?”  Asking a new question led Edison to develop a dynamic context around lighting that involved concepts 180 degrees opposite from the prevailing thinking about electricity.  He devised a context which embraced oxygen-free environments, natural compounds rather than metals, and patterns from the world of telegraphy. He then conducted ethnographic research to determine how the technologies he had in mind would impact daily life. At the start, Edison had no idea that the light bulb would represent the end point of his search. But by asking a question which redefined the context of lighting itself, he generated breakthroughs that impacted both technology and customer behavior.

2) Imagine a new behavior:  Steve Jobs, in conceiving the iPod, saw from existing data that “music” was a huge market. Yet, he was less concerned about leveraging the iPod to compete within the boundaries of the existing music industry, and more focused on generating a new context for behaviors that would entirely redefine music consumption itself. In order to generate this new context, he needed to create linkages between both new and existing technologies massive data storage, long battery life, plus others). He also had to imagine new customer behaviors which required connection to virtual libraries of music – ultimately birthing iTunes, a revolutionary means for digitally accessing music. Jobs focused on customer context and new behaviors in masterminding breakthroughs for both the iPod and iTunes, shunning industry boundaries.

We can see Intel applying both these customer context approaches today — asking new questions and imagining new behaviors. Recognizing the speed of market change in smart devices, and mapping this against the company’s historically slow pace of new chip development, Intel marketers began asking “What kinds of digital interactions appeal to young adults?” To address this, working under the direction of CMO Deborah Conrad, Intel brought together software engineers, R&D specialists, and data scientists to develop online as well as streaming content for prescreened Gen Y audiences delivered during live performances by popular rock artists hired by the company. The Intel team analyzed real-time interactions of audience members with online content during these live performances as part of their customer context exercise. Rather than focusing on industry boundaries, Intel found insights for new offerings via analyzing patterns of connections between users in this live concert community. They embraced the “data mountains” that were generated by this process and intentionally sought to create customer context that created a new ecosystem for chip applications.

Where can you begin employing customer context rather than the tired, linear constructs like stage gate mechanisms or other traditional research? Consider how asking a new question and imagining a new ecosystem of customer behaviors could revolutionize your offerings, and break old definitions for industry boundaries you may still be clinging to.

image credit: mobile phone image from bigstock

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Sarah Miller Caldicott is an innovation author and great grandniece of Thomas Edison.  After her ground-breaking book on Edison’s innovation process, Innovate Like Edison, Sarah wrote Inventing the Future: What Would Thomas Edison Be Doing Today? Her next book, Midnight Lunch (Wiley, Nov 2012) will translate Edison’s world-changing collaboration process for the digital era. A professional speaker and master trainer, Sarah is Founder/CEO of the innovation consultancy The Power Patterns of Innovation. You can find Sarah on Twitter at @sarahcaldicott.

No comments

  1. Sarah thanks so much for this great piece. Please keep them coming. I’d love to see you when I’m in Chi next!
    xx, Julie

  2. Julie…So glad the post resonated with you. As industry boundaries continue to disappear, context will become a major area of focus over the next several years. Would love to see you when you’re next in the Windy City!
    Keep innovating,

  3. Great, thought provoking article Sarah! Reading it, I couldn’t help thinking… What if the White House and Congress became receptive to a little ‘context’ in the innovation of our country?

    • Frank…Thanks for your note. The political scene in Washington could benefit greatly from an increased focus on context. Issues have been divided along party lines rather than looking at the broader picture, creating polarizing divisions. Looking at the nation’s current challenges from the vantage point of context could definitely help move things forward more productively!
      Keep innovating,

  4. Sarah,

    minor correction: Steve Jobs didn’t concieve of the iPod, it was brought to him along with the seedling concepts for iTunes and the iStore. He did correctly recognize the nature of the value of the concepts to youthful entertainment consumers and acted to implement them well and with courage to pivot his ‘computer’ company.

    Your methods of context are strongly reminiscent of the demand ecosystem methods as popularized by Erich Joachimsthaller and Vivaldi Partners. I work in healthcare innovaiton and have been using such methods for a decade to make innovations that are relevant to the whole tribe within their daily lives.

  5. Royce…Greatly appreciate your comments. I don’t know Erich Joachimsthaller but have certainly heard of him, and Vivaldi Partners. The use of ‘context’ offers a powerful approach with many applications. Great to hear that it has been so helpful to you in healthcare.

    I expand on the notion of context in my upcoming book “Midnight Lunch” (due out in Nov) offering a broader view of how Edison employed context so successfully. I hope it can also be of use in your efforts!

    Keep innovating,

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