Why do you use focus groups?

Posted on June 18, 2008 by Gary R Schirr

As has been noted in several postings on this blog, there is overwhelming evidence that focus groups and brainstorming actually:

  1. Reduce the number of ideas generated, and
  2. Eliminate the “outliers” — the most creative ideas

compared to 1:1 techniques that are a part of a “voice of the customer” effort.

Voice of the customer 1:1 methods include:

  1. one-on-one interviews
  2. ethnographic study, and
  3. site visits by NPD staff.

Why do firms still use group techniques — focus groups and brainstorming — in new service development?

PLEASE POST A COMMENT OR SEND ME AN EMAIL (editor@newservicecreation.com) with 2-3 REASONS WHY YOU HAVE USED FOCUS GROUPS OR BRAINSTORMING IN A RECENT NSD OR NPD EFFORT.

Thanks!

For a review of some of the research evidence, see the VOC article by Griffin and Hauser: http://dspace.mit.edu/bitstream/1721.1/2425/1/SWP-3449-27000178.pdf

To see the Business Week article, “Shoot the Focus Group” (I think it could better be called “shoot the moderator”):  http://www.businessweek.com/magazine/content/05_46/b3959145.htm

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“The customer is the company”

Posted on June 16, 2008 by Gary R Schirr

 Hi-tech t-shirts

There is a fascinating article in the June issue of Inc. magazine about Threadless. Threadless lets customers design t-shirts over the Internet, then takes a vote on the best designs which are then offered for sale. Potential customers do the design and critique the alternatives.

Despite being in a low-tech commodity business, Threadless used the Internet, the power of social networks, and co-creation with customers to thrive. von Hippel cited the company as a perfect example of an organization harnessing the power of customer innovation. A paragraph from the article:

“Ask Nickell what he makes of his company’s whirlwind success, and he will respond rather sheepishly. “I think of it as common sense,” he says. “Why wouldn’t you want to make the products that people want you to make?” Indeed, the idea that the users of products are often best equipped to innovate is something many entrepreneurs know intuitively. And it is supported by a growing body of research. A study published last year in the Strategic Entrepreneurship Journal suggested that the vast majority of companies are founded by “user-entrepreneurs” — people who went into business to improve a product they used. Meanwhile, studies by von Hippel and others show that in industries as diverse as scientific instruments and snowboard equipment, more than half the innovations generally come from users, not from research labs.”

The full story is available here:  http://www.inc.com/magazine/20080601/the-customer-is-the-company.html

Thanks to the bloggers at the Temple innovation site for pointing out this fascinating example! Their link is:

http://innovation.temple.edu/blog/index.php/2008/05/the-customer-is-the-company/

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Focus Groups, Brainstorming, and Freddy

Posted on June 3, 2008 by Gary R Schirr

Why won’t they die?

A reader made this comment on an earlier post about group-think efforts:

At a conference I recently attended, we had several brainstorming sessions devoted to finding ways to improve the grant we were all on. An expert moderator rotated between several groups, and I always felt like he did more harm than good. In one instance, a constructive conversation was beginning, but it didn’t fit the format that had been imposed on us, so he actually stopped the discussion to reimpose the format. By the time he’d done his damage and moved on to the next group, the idea was gone.

In a previous role as head of new service development I had seen useful information totally dry up when, at the urging of outside consultants, we switched from 1:1 interviews with users to focus groups moderated by experts.

A standard rebuttal to these experiences is that the moderator was not expert enough.

However there is 40 years of research, including at least three meta-analyses — using field experiments and controlled experiments with expert moderators — that shows conclusively and consistently that brainstorming and focus groups:

  1. Reduce the number of ideas generated compared to 1:1 discussions and
  2. Reduce the quality of ideas by eliminating the most creative ones (outliers).

In a seminal article on gathering customer information, “The Voice of the Customer”, Griffin and Hauser show that the group methods don’t even save time: you gather about the same number of ideas per hour 1:1 or in groups!

Freddy Krueger seems to have finally stopped stalking children, why do focus groups and brainstorming continue to kill ideas and hamper creativity despite 40 years of evidence of their harm?

My two thoughts:

  1. Hard sell by outside consultants who have trouble inserting themselves into 1:1 meetings and
  2. Executive participants enjoy these group activities and they provide bonding that is safer then relying on their colleagues to hold the rope in an Outward Bound bonding session.

I believe that both of these are key factors in understanding why group-think practices continue and will discuss them in a future post. Any other thoughts on why they won’t die??

Voice of the Customer: http://dspace.mit.edu/bitstream/1721.1/2425/1/SWP-3449-27000178.pdf

BusinessWeek: http://www.businessweek.com/magazine/content/05_46/b3959145.htm

A funny view of groups in action: http://www.youtube.com/watch?v=BOuC5jjTZOI

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Chicago — an innovation center

Posted on June 2, 2008 by Gary R Schirr

Nussbaum at BusinessWeek makes a case that Chicago is the most innovative city in America:

http://www.businessweek.com/innovate/NussbaumOnDesign/

He talks about several major initiatives by the city government as well as the IIT Design center, but does not mention the CME center for financial innovation or the Chicago Entrepreneurship Hall of Fame:

http://www.cmegroup.com/company/center-for-innovation/

http://www.uic.edu/cba/ies/ehf.html

And to top it off the Cubs and Sox are both in first place…and the Bulls have a new coach and first draft pick…and the Bears of course are on the cusp.  All of this my first summer NOT in Chicago…

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What is the degree of Service-ness?? Part I

Posted on May 28, 2008 by Gary R Schirr

How should a goods/service continuum be defined?

In my dissertation ( Schirr 2008 ) I had in-depth discussions with thirty executives involved in service innovation in their organizations. One of them who had had a varied business career noted:

I’ve worked in a lot of different categories, and I’ve seen, you know, how traditional consumer companies, as well as a lot of B2B [goods] companies, constantly are innovating, testing and rolling out new products… I know what those models look like, and I can assure you the service industry is nothing like any of those.

He went on to note that the differences were clearer the “more pure” the service. There have been numerous articles about the differences between service and goods and several suggested continuums. The four standard differences between goods and service are (Zeithaml):

  1. tangible/intangible, 
  2. homogeneous/heterogeneous, 
  3. inseparability/separability of consumption and production,
  4. storability/perishability

Generally continuums of “service-ness” have focused on tangibility. That seemed the dimension most of my interviewees focused on. But for differentiating innovation processes all four dimensions would seem to be meaningful.

Take a concrete example: in the 83% of the US economy that is service, software is counted as a business service; yet computer processors with just as much information content are goods. This makes sense by the tangibility test: you can hold a chip in your hand; software can be downloaded. However if you compare packaged standard software, say MicroSoft Office, to a designer chip made for a specific customer, the chip would be more heterogeneous and arguably more inseparable from the use the customer has in mind. This extra customization and centrality to the customer use would likely lead to some of the differences seen in service innovation, especially more customer involvement in development.

Therefore “service-ness” to differentiate innovation processes may not be a simple one-dimensional continuum, but some sort of complex continuum with four dimensions.

I would value input from readers about which dimensions you view as most important for differentiating innovation in goods/services.

An emerging service-dominant logic of marketing (Vargo and Lusch 2004, 2006) argues that these four dimensions are totally invalid. I will do a followup posting in the next few weeks with my thoughts on how my subjects’ observations on the differences between goods and service innovation fit in this new theoretical framework where all products are service and all marketing is service marketing.

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“Gating” Ideation?

Posted on May 20, 2008 by Gary R Schirr

 

Don’t fence me in…

In this month’s issue of Visions magazine the owners of the stage-gate(R) trademark take a look at ideation. They conducted a survey to find the most used and most effective customer research methods.

Few details are provided about the survey, but as noted in a previous post, one would assume that there would be a natural bias: an NPD manager might feel stupid admitting that his most used tools really aren’t all that effective. Tom Wolfe recently said that it is fun to read autobiographies because they are personal and “like Wikipedia–some of the statements might even be true.” A pet theory of mine is that survey respondents have main three goals, in order of importance they want to: (1) look smart, (2) tell you what you want to hear, and (3) tell some truth.

I was impressed that, although little used, ethnography was found to be the most effective tool, although as noted in the earlier post there are some methodological issues with this also.

I believe that there are problems with all of the other results. The authors find “Voice of the Customer” tools to be very effective. However they include tools such as focus groups, which Griffin and Hauser  (as well as 40 years of other research) showed to be ineffective and did not include 1:1 interviews which was the primary tool suggested in the VOC article.

I would recommend skipping the Visions article and instead finding a copy of the original Griffin and Hauser VOC paper (1993 Marketing Science). Or in its longer, working paper version it is available online:

http://dspace.mit.edu/bitstream/1721.1/2425/1/SWP-3449-27000178.pdf

I will devote a future post to an overview of the VOC article.

For a short discussion of how P&G freed itself from using Focus Groups and moved to true VOC methods:

http://www.businessweek.com/magazine/content/08_15/b4079073614638.htm

Also see my two previous posts.

Posted in Co-creation or User collaboration, Customer Research Methods, Ideation, Stage-Gate® | Tagged , , , , , , , , , , , , | Leave a comment

Expert moderators and Focus Groups

Posted on May 13, 2008 by Gary R Schirr

It is not square!

Several readers have pointed out that I seem negative on Focus groups. They are correct and there are two primary reasons:

  1. In a former role we were innovating with the help of customer input. We hired a consultant. Using an expert moderator and focus groups with our users the consultants managed to bring useful input and innovation to a halt.
  2. 40 years of academic research (e.g. VOC) shows that group innovation efforts such as focus groups and brainstorming kill ideas and totally eliminate the most creative ones.

However in the name of fairness, I must share this video that shows the power of an expert focus group moderator:

http://www.youtube.com/watch?v=BOuC5jjTZOI

Here’s a three-year-old article about firms who have benefited by eliminating focus groups and the moderator-charlatans.

http://www.businessweek.com/magazine/content/05_46/b3959145.htm

Posted in Customer Research Methods, Ideation, Uncategorized | Tagged , , , | 1 Comment

“Keep the Customer at the center”

Posted on May 8, 2008 by Gary R Schirr

Customer immersion at P&G: “Living it” and “Working it”

“We have figured out how to keep the consumer at the center of all our decisions,” Lafley writes. “As a result we don’t go far wrong.”

Before, P&G would rely heavily on consumer focus groups to gauge reaction to products that its researchers thought up. Now researchers go so far as to live with shoppers for several days at a time—an immersion process P&G calls “Living It”—to come up with product ideas based directly on consumer needs. Such experience with a lower-middle-class family in Mexico City produced Downy Single Rinse, a fabric softener that removed a step from the less-mechanized laundry process there. P&Gers also hang out in stores for similar insights, a process they call “Working It.”

Note that in order to better understand the customer better, P&G abandoned the focus groups and went to 1:1 interactions.This is fully consistent with the “Voice of the Customer” (Griffin and Hauser 1993): forgo group research for 1:1 interviews and ethnography.

 In an earlier post, “Should you hire an anthropologist?” (4/9) I expressed my reservations about suggestions on ideation from the “stage-gate(R) duo.” It was interesting that ethnography was the most powerful ideation tool in their survey. However the rest of their study was undermined by claiming they were focusing on VOC methods, while highlighting focus groups and not even including 1:1 interviews.

Listen to P&G: abandon the groups and go see your customers in action!

See the original article on P&G:

http://www.businessweek.com/magazine/content/08_15/b4079073614638.htm

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Many Crummy Trials BEAT Deep Thinking: Discussion

Posted on May 5, 2008 by Gary R Schirr

 Two related posts in the last month have generated a fair amount of interest:

  1. “Many Crummy Trials BEAT Deep Thinking” (4/20)
  2. “the cost of trying is lower than the cost of analyzing.” (4/1)

—

An executive in charge of online services at a major Wall Street firm sent an email which included:

[I] sent this article onto a few of my staff – it happened to hit at a particularly interesting time.  I have a project with very complex business logic and the analysis phase is quite painfully slow.  I had been contemplating this very issue – as the article puts it, “is the cost of detailed analysis greater than the cost of iterative trials.” 

I like the notion of “cost” here – either time or money.

—

One comment on the site said that trials instead of analysis was already a key part of innovation in his bank, but that better techniques to manage and prioritize the trials was needed.

—

In two comments and five emails (I hope ratios will reverse some day: WordPress makes it easy to post) NO ONE found the idea of trying before analyzing to be strange. I think this is a result of interest in its own right.

One financial service executive did note that at her firm development teams tended to BELIEVE in analysis or prototyping/Beta culture with religious zeal that is not impacted by empirical data. In her firm the North American team believe in getting Beta version out quickly, the European group believed in analysis, and the two Asian teams were also split into one each. Therefore the development process followed for a new service depends on which regional group is in charge of the project.

—

One commentor questioned whether crummy trials had the potential to hurt the brand name.

I indicated that in my experience (B2B) we picked the testers carefully and indicated that we were Beta testing even if it was really Alpha or first time testing.

B.J. Fogg, the author of the original study of Facebook applications cited and the source of the “Crummy trials” quote, also responded to that comment, indicating that “As of right now there are no major brands in the top 50 applications on Facebook. It’s likely they are afraid of hurting their brand by doing something innovative and new – but eventually if they want to play the game they’ll have to figure out the rules. It takes a completely different way of thinking about innovation and most major brands haven’t learned to do that yet. Regarding crummy trials hurting brand, it’s an interesting question. There is certainly that potential… I think people are learning not to expect perfect execution all the time.” BJ Fogg Stanford Persuasive Technology Lab

—

Crummy trials beat deep thinking. Ready, Fire, Aim! Probe and Learn. Experiment. Prototype. Beta Culture.

However you express it — just do it.

— But lets work to find a way to manage, prioritize and sell the experiential methods.

The original postings are below (4/20).

The link to the BJ Fogg Stanford study is

 http://www.slideshare.net/bjfogg/10-million-in-10-weeks-what-stanford-learned-building-facebook-apps

Posted in Co-creation or User collaboration, Customer Research Methods, experiential innovation, Experiment, financial services, NSD Process | Tagged , , , , , , , , , | Leave a comment

Beta Culture at Nokia — now in BusinessWeek

Posted on May 3, 2008 by Gary R Schirr

Two weeks after this blog ran a piece (see April 17 below) on the Beta Culture at Nokia, BusinessWeek wrote an article on their efforts. Nokia has had incredible success with Beta Testing and pre-Beta Testing of products and ideas by lead customers. Their current “problem” is customer collaboration greater than they had planned for.

The link to the BusinessWeek article:

 http://www.businessweek.com/globalbiz/content/apr2008/gb20080430_764271.htm?chan=innovation_innovation+%2B+design_top+stories

 The earlier post is below and the link to Nokia Labs is: 

http://betalabs.nokia.com/blog/2008/04/16/celebrating-beta-labs-1-year-birthday/

Posted in Co-creation or User collaboration, Customer Research Methods, experiential innovation, Experiment, Ideation, NSD Process | Tagged , , , , , | Leave a comment