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st product, commercialised it and took it to market. It didn’t make a lot of money but the whole experience taught be quite a lot and I started to think about what exactly it is that makes a product or business work and what is required to make a business grow. Using what I learned I decided to write my first book, a very simple one about the risks of taking a product to market and how to succeed.
Shortly thereafter I became a Director at the Innovation Centre of Victoria (INNOVIC). During my time there we saw many inventors come to us with ideas and we helped them to patent and commercialise these products. Using what I learned there, I did a conference talk on the subject of innovation and people seemed to really like the message. So I decided to write a book called ‘Think New’ about product innovation and later I did some further work on identifying business opportunity which led to more books on process innovation and another on service company innovation for banks, insurance companies, airlines, restaurants and the like.
It is based on this extensive experience and material that I developed Matrix Thinking. This is the basis of my workshops which I conduct all over the world in 28 countries and the material is in fact licensed to the Deloitte Innovation Academy in Australia.
Q: What exactly is Matrix Thinking and how does it work?
A: So say you are starting a new business, in essence there are two major risks that your business plan must contend with. Firstly, are you actually able to produce and secondly, will it actually sell? Business plans fail for a lot of reasons but at the end of the day, businesses fail because t
hey simply don’t sell enough products.
Understanding the feasibility of manufacturing a product is a relatively straightforward task, simply consult an engineer and ask them if it’s possible, but what I wanted to do was figure out a system that could determine what to sell and the answer to that is embedded in innovation.
What I’ve developed is basically a simple platform for thinking. It’s so simple that I’ve even done workshops at Primary Schools so it really is the most simple concept you can ever imagine but it is so powerful that I can take it to even the most senior Board level and people just love it.
My job is to go into companies and help them to unleash the power that they already have by making them realise that there is nothing they are doing today that can’t be done better. Everything can be improved! I then give them the tools to do just that and I form some teams within the Company to help them achieve this goal by analysing bits of the business, products and services and help them to improve each of them.
Q: How would you define innovation and how do you use this to project demand on a given product?
A: I define innovation to simple mean: ‘change that adds value.’ There isn’t a product or a service in the world that cannot be improved in some way. If you want to disagree with that, what you’re telling me then is that what you’re doing with a particular product or service today will remain the same in 50 years. Simply put, that is impossible. Does that seem right to you?
Q: In general I suppose that’s true but I’m sure there must be an exception to the rule
A: Alright, try and think of just one product that you think will remain the same.
Q: How about the process of brewing tea and tea bags? That seems to be a product which won’t change much?
A: That’s an excellent example and it’s a good one for this reason. I recently did work with a company that specialises in tea bags and they wanted to find a way to innovate the tea bag. One of the ways you think about innovation is: what annoys me about the product? When you make tea with a tea bag why is it that it doesn’t taste as good as when it’s brewed in a pot? Because you don’t allow enough time for it to brew. That’s the reason it doesn’t taste as good. So how do we fix it? Well I have an answer for that but unfortunately that’s an invention that we’ve done some work on so I can’t really share it with your readers, but what’s important here is the method of thinking and honing a product.
Q: And you’ve developed a framework for this type of thinking that can be applied to any product or service?
A: Yes. Generally speaking when you create a product, there are four ways to build your business. You change an existing product by enhancing it; that’s what Apple and many other tech companies and it’s what car companies. Every five years or three years or every year, they cha
nge their product and take it up a notch.
You can also sell accessories to the main product or sell products that complement the product. So if you sell shoes, you have to think about what complements a pair of shoes; socks, polish, brushes and the like. Here you have to understand the mindset of the consumer and capture their attention.
Finally, there is channel enhancement, if I have a product that I’m selling to a group of people, my connection between me and this group of people is what is known as the channel. What we do is look at what else we can feed through this channel that the people will want.
If you have a look at the most valuable companies, Apple, LinkedIn, Twitter and Facebook, it’s all about connecting people and connections. Once you’re connecting people, you have a whole lot of opportunity.
Point being, if someone gives me a product and 10 people to work with, and we apply my Product Innovation Matrix, we can come up with a better product in 10 minutes. It’s that simple, so that’s product innovation.
Q: And in terms of services and service companies?
A: For the service sector I developed another method called the Opportunity Capture Matrix. This is because the world has gone beyond simply changing a product for innovation. The opportunity matrix shows you the five things to look for. If you teach someone this matrix, they will start to see opportunities everywhere.
Q: Can you give us an example of how this would work?
A: Okay let’s look at traffic as an example. I’ve travelled to Istanbul and I guarantee you’ve not seen traffic until you’ve seen how it is there. When someone drives somewhere, it takes two hours for them to get from A to B. For about an hour of that time, their foot is on the brake, so the stop light is on. In Istanbul alone, every morning 200 million watt hours is consumed by car brake lights only, every morning, just in Istanbul, so think of the world!
With that in mind, I’ve worked on a patent to build a better brake light and we’re working to develop this idea as well.
Another example is with mobile phones, it takes two watt hours of electricity to charge a phone and you charge it every day. Assuming that there are one billion phones actively being used in the world you can find out how much energy you’re wasting on charging your phone and it’s in the gigawatts!
That would be an unbelievable amount of energy being devoted solely to charging a phone. If we were to give away a small solar cell for $ 2, you could charge your phone for nothing! It’s not so much the cost than it is about the energy that is being used and the greenhouse gases being produced as a result. Simply using a cheap solar cell to charge phones and you eliminate a massive chunk of this energy.
This kind of thinking feeds into marketing and services and just about everything really.
Q: If innovation is the key to improving product sales, what is the implication for companies that don’t make an effort to innovate?
A: Did you know that in the 1920s the life expectancy of a public company in the United States was about 60 years but by the 1990s it was less than 10. Companies that do not continuously innovate and change and move forward you will fall behind. With mobile phones, look at the cases of Motorola which was one of the earliest players. Eventually consumers moved on to Nokia, then Blackberry then Apple and now Samsung and already there are new brands coming in to challenge them too.
Steve Jobs of course re-wrote the book with the tablet and everyone’s playing catch up now but the key take-away from all this is simple: if you don’t keep moving, you’ve got maybe five years. So what I try to do is inspire people about the need to do this so I go in to middle management, senior management and even the Board level and deliver this message, show them the tools and conduct workshops and then form innovation circles, and this analogous to the quality circles formed by the Japanese in the 1950s.
In the ’50s, stuff made in Japan was junk, rubbish and by the ’80s it was among the best in the world and this was accomplished by forming quality circles and I do exactly the same with businesses by forming innovation circles. They take parts of the business and explore how to improve it.
Some companies say we will give you 10 minutes or 20 minutes to think about how to improve the business. And you know what, it never happens! The only way that you can make it happen is to allocate time to do it, give people tools, encouragement and reward success and I guarantee that if these people are given these simple tools that are easy to understand, there’s no stopping them.
Q: What was the reason behind your decision to come to Sri Lanka and what has your experience here been like so far?
A: I’ve worked in 28 countries but when I got here I honestly didn’t know what to expect. I thought it might be another Mumbai, so I was blown away by the cleanliness of the airport. It’s not like Singapore but it’s still very well organised.
The second thing I observed was the cleanliness of the cars but the best thing was the mirror smooth freeway into town. That was the best road I have ever been on in my life and Australia has some outstanding roads so that’s really saying something.
That set the scene for me in Sri Lanka. Since then I’ve been here for a week and I’ve been made to feel very much at home and comfortable. The people are so friendly and I can speak to them about anything and the food is great! I didn’t bring my wife on this trip since it was the first one but I can promise you that I will be bringing her on the next one. Sri Lanka is definitely a well kept secret.
As for reason I came over here, one of your countrymen heard my delivering a seminar and he loved what he heard so he brought some of his friends to listen and they too loved the message. Afterwards they approached me and told me ‘you have got to come to Sri Lanka and speak to some of our businessmen’.
Since then I’ve met and spoken to some of the very top businessmen here and we’ve had some very positive meetings and what we’re looking to do is explore how we can bring some of these processes into the developing businesses in this country. I will be leaving soon but with the way that things have gone, I expect to be back here in a couple of months to carry out some seminars and workshops on innovation.
Q: Sri Lanka, comparative to many of the countries you’ve worked in previously, has a very small domestic consumer market and many of our industry leaders seem quite comfortable at the top. How would your insights vary given this situation?
A: Getting comfortable where you are is one of the most dangerous things that could happen to any company. What I see in Sri Lanka is a burgeoning economy that’s about to explode with opportunity. I agree that it’s a small market but its growing at a rapid pace and where there is growth there is always opportunity, to start new business but also for existing businesses to grow through innovation as well.
Q: Certainly there is a lot of room for innovation and improvements to processes in Sri Lanka, but what is the cost of this innovation and what will the return on investment be like for companies that go down the route?
A: Like I said before, I’m an engineer and engineers love to measure and what I like to tell people is that if you can’t measure it, then don’t change it. It doesn’t matter of it’s a different production process or a different marketing process, or whichever, if you can’t measure it, do not change it. As an example, I worked with a chocolate company in Australia to develop a new marketing plan.
What we did was use my Opportunity Matrix to look at key factors with regard to people who buy chocolates and we discovered that 83% of high quality chocolates are bought by ladies. High quality chocolates can only be bought by relatively well-to-do people.
So the question then is where does a well-to-do lady go every six weeks? The hairdresser! While they are there, they are given tea or coffee or in some places champagne so we decided to give them chocolates. And the chocolate came with a little card that elaborates on the benefits of eating high quality dark chocolate and promoting the company and right at the end a small statement informing them that if they take the card round the corner, we have a shop where you can get some more. So every time that these people give the cards they get a discount at the shop therefore we could measure the effect and using this, and other simultaneous promotions, we reached 100% of our target market in a way that was measurable.
So to answer your question, the cost of innovation will vary, it will depend on how complex the idea is but even the smallest effort of printing a card and supplying a single chocolate can be enough to generate massive new business, hence the return on investment too will vary however provided you apply Matrix Thinking correctly, all of this can be measured.
Ultimately, it’s all about thinking about the behaviours of people and figuring out the right way to get into the market.
Pix by Lasantha Kumara
