"A non-discrimination rule that bans all application-specific discrimination, but allows all application-agnostic discrimination. Discrimination is application-specific if the discrimination is based on the specific application or content (e.g. Skype is treated differently from Vonage), or based on classes of applications or content (e.g. Internet telephony is treated differently from e-mail)."

We started off with customer satisfaction. Not satisfied we decided we needed to delight them.

 It seems Apple has taken it (not by design - pun intended) to a whole new level. UK based gadget insurer, Supercover Insurance says "For short periods around new model or upgrade launches, claims for lost, stolen or damaged iPhones go through the roof. The issue appears to be that most iPhone owners can only go for so long realising that they're a generation behind the latest must-have spec before they resort to extreme measures."

Here are the top ten wildest claims:
1. I dropped it from a hot air balloon
2. I lost it while sky diving
3. It broke when my son used it as a table tennis racket
4. I lost it while building a sand castle for the kids
5. I accidentally buried it in the garden
6. It fell into the kettle
7. I dropped it in a food blender
8.  My dog chewed it to pieces
9. Juice from a defrosting piece of meat leaked into it
10. It flew out of the car window

Nielsen Media has an interesting report on demographics and the chart on income levels of iPhone users is interesting.

80% of all iPhone users make more than 50,000 USD and only 13% are below the 35K mark. So money is not the problem.

Now, fraud is obviously something wrong, but how many companies can claim their customers are desperately crazy about their products ? I don't own a single Apple product but after writing this I am in love with them.

"If at first, the idea is not absurd, then there is no hope for it." ~Albert Einstein

Clients expect many things from vendors. There are hygiene factors like good delivery, reliable resourcing and honesty in dealing with problems. These are the building blocks. Going back 15 years, getting these hygiene factors right was all that mattered. Certifications like CMM and ISO were supposed to reassure. As the industry has matured, "thought leadership" has emerged as a major expectation. Sudhakar Ram over at Sramana Mitra's blog calls companies that can do this as Wave 3 companies. The website of every major outsourcer seems to have a section on this topic. So how does one go about implementing this on the ground? How does one deliver thought leadership to clients?

     
Photo by Dierk Schaefer

JP has an interesting post where he says "don't focus on the business model, but think of ways to create value". I think this is very relevant to delivering thought leadership and innovation in a practical, actionable way. So very often we take an outside in approach to innovation. Start with an industry problem > Create a solution > Link it to the client's problem > Sell the benefits and hope it sticks. The problem with this approach to innovation is three fold:
  Priority: With budgets being what they are, every client is trying to do more with less. The problem maybe real. Solution maybe good but it might rank too low on the roster. Great idea. Thanks but not right now.
  Relationships: Deals and won and sold on relationships. Outside in propositions tend to be politically dicey. Technical buyers feel threatened. Objections on why it won't work are easy to raise and sometimes relationships get strained.
  Context: Most outside in solutions look cool on the flyer. Great ROI, strong credentials, vendor is willing to invest. However, what clients are really interested in is :How does this solution fit into my IT environment ? I have an in-house tool that can be extended to do the same thing! I don't think this platform aligns with my goal state. IT environments are too complex to allow any outside solution to easily integrate. 

So that leaves us with the problem of generating ideas from the inside. Here are five steps to help you get there.

Create the vision: Create a common vision that both clients (not just at VP level) and your own team can relate to. What do "Innovation" and "Thought leadership" mean to the customer ? How does it relate to known strategic initiatives ? What does this mean for someone who is managing a Java project to create a portal for Insurance agents ? Give specific examples of what this can be at a role level. How can a developer or a project manager bring thought leadership into their day to day activities ? People need to be able relate to the vision and see themselves as meaningful contributors.

Share it: Share it with the client and the team, including leaders outside the account. Get the whole organization aligned and create the internal marketing buzz needed to make it a success.

Photo by Ivanpw.

Create and publish a thought leadership register: This is a formal registry of value generated and accepted by the customer that each team should update. Dollarize the value where ever possible. This is the acid test as no idea can go it till the client accepts that this has been of value to her.

Incentivize people: Align performance plans and appraisals. Create quarterly awards for the best idea. Celebrate the winners. The tools are many. Objective is to motivate.
 

Check out this UN report on ageing population demographics in industrialized nations.

Almost a third of the population would be over 65 in some of these countries. The market is still nascent and companies like CAST (Center for Aging Services Technologies ) are attempting to build an ecosystem to cater to this future market. Majd Alwan the CEO of CAST says "The end game is to prove that technologies would allow seniors to have a better aging experience in a place they call home." I do believe that India based health care providers would get a fair share of this emerging market by playing the role of catalysts. The value prop: Open heart surgery in India + Visit to the Taj + Get a free (thanks to the money saved on the surgery) state of the art cardio robot implant that will give your an hour advance warning of heart trouble. Till the time policy makers get their act together, companies like CAST should seriously look at the possibility of India based providers as a part of their ecosystem.     

Everybody is talking of Web 2.0 and Enterprise 2.0. O'Reilly's web 2.0 meme map got me thinking on one for the services business. Maybe I should call it Outsourcing 2.0 or Software Services 2.0! My two cents worth:

Blue     : Drivers
Orange : Core competencies
Grey     : Themes

What do you think ?

Sharad brings out his top five reasons why R&D (product development and related areas) has blossomed slowly. Here are some other reasons I can think of:

Software engineering mindset: The local market for talent is heavily biased towards software engineering. Take the average manager or developer and he will live and breathe software engineering, quality and processes. Nothing wrong with that. But a true product company typically has a computer science core comprised of algorithm savvy programmers. If critical product development is to get outsourced, you need computer scientists. Sadly, the local market has few such people. If you don't believe me, trying interviewing a six year experienced technical lead and ask him what a binary search is.  The candidate would likely take offence, not because the question is too easy, but because he is above it in spite of not knowing the answer. He might even respond that he has left behind algorithms in engineering school.

Multi site, concurrent development expertise: To have product development outsourced across the value spectrum (not just low end work) you need to have multi site concurrent development enabled. The offshore developers need to live and breathe the same code base. Regular services delivery models are good at executing tightly coupled, single site development engagements.

Long gestation period and attrition: To add innovative value to a product requires intimate knowledge of the context, be it code or the domain. It takes time and investment to see the returns come. Most companies are unwilling to spend the time and effort and seek quick results. The high attrition in offshore labor markets only make the case worse.

Seeds of failure and the peak of success: It is commonly accepted that captive centers make sense only with scale accompanying it and when the work is strategic enough. As the product outsourcer's share of the business grows, both qualitatively and quantitatively, the case for outsourcing actually becomes weaker. The seeds of failure lie in the peak of success.

The technology lag factor: Products are not static. They need to evolve constantly in tune with market demands and need to aggressively look at incorporating new technologies to stay on the leading edge. Services companies typically absorb technology with a lag factor. There is a certain amount of derived demand for a skill set that needs to manifest before budgets get released for investment in the skill set. The classic utilization mindset. Makes perfect sense in the services world, but it does not help lead the innovation race.

IP concerns: This is a no brainer. Exposing precious source code to someone over whom you have no direct control is not easy and it is not just about the code. The minute you outsource product development and start sharing schedules you are exposing product release timelines, details about how behind you are on schedule, what features and in and what are out. These can be very sensitive.

Business Week brings up PC recycling as a way to bridge the digital divide. We also have more radical approaches like the Simputer innovation. Both approaches have their pros and cons like anything else, but I tend to favor reuse and "value engineered" innovation over radical innovation when it comes to bridging the digital divide. Here's why:


The stupendous importance of the platform: Making a radical innovation like a new platform succeed in the face of an existing, proven and mature option is a staggering task. Just ask any company that Microsoft has vanquished to know why.  


Ecosystem versus devices:  The question really is not access to devices but access to the ecosystem where there is information.The idea should be to find the path of least resistance to get the underprivilegded into the information rich ecosystem. An outdated PC with a local language version of Windows running just IE running would provide a much easier entry point than new devices or software.


Leveragability of the learning curve: Why bridge one divide to create another ? Why make a 'digital illiterate' learn a new device only to find that he is handicapped when it comes to what the rest of the world is doing ?

The human factor: Which CEO would not want to get rid of "junk" PC's for a noble cause ? Knowing that your junk can irrevocably and surely change someone's like for the better is a strong incentive. Meanwhile try selling a new, untested and radical innovation to the same CEO he will ask for a business plan.  

Think local when it comes into innovation: Innovation should be value engineered with the objective of reducing the cost of entry by leveraging local strengths. The wind up laptop is a good example. I will say take a PC and find a way to use a gobar gas plant to run it before taking it to an Indian village. The example is extreme but the message is clear, think local when it comes to innovation.