The Innovators Studio with Phil McKinney

Today's show addresses questions from listeners on innovation KPIs. I'm back in Colorado after clocking 12,000 miles in the mobile Innovators Studio. On the road, I talked with interesting innovators and analysts. Taking a break from interviews, I'd like to answer your questions on measuring innovation success.

There are hundreds of Key Performance Indicators (KPIs) to measure innovation success. What are the right innovation KPIs to use? What KPIs will give insight into the innovation process? KPIs should be unique to your organization. Think through what KPIs will measure and how that can guide innovations and your organization.

I've broken innovation KPIs into categories, like building blocks. Build up the blocks to get a complete perspective on your innovation effort.

Six categories for Innovation KPIs:

1. Idea process/managing the idea funnel
   • What's done to get ideas, put them in a funnel, review, manage and analyze them?
     • Raw ideas
     • Raw ideas validated
     • Ideas prototyped
     • Age of ideas
2. Idea commercialization
   • Innovation idea brought to market.
     • Innovations that became a product
     • Innovations that make a profit
     • Are early customers willing to pay a margin premium?
     • Innovations purchased
     • Are resources in organization aligning to make product a reality?
3. Financial impact
   • Tough to measure - long lag from time of investment to product launch in market
     • Revenue from new innovations
     • Profit from innovations
     • Revenue protected by patents
     • Revenue from patent licensing
4. Customer impact

   • Customer success compared from old product to new innovation

     • What has new product allowed customers to achieve?
     • How many customers have shifted to new?
     • Market share trend for innovation - grabbing from competitors?
5. Organizational impact
   • New products/services have an impact
   • Can pull organization into new category or focus
     • Ratio of sales from old versus new - sales ramping up for new/declining for old?
     • Ratio of profit from old versus new
     • Investments – is investment shifting from old to new?
     • Rate of return on innovation investment
     • Has it driven brand awareness?
6. Pure Innovation KPIs
   • Catch-all
     • Staff trained for innovation
     • Use of formal creativity tools
     • Implementation and use of Idea Management System
     • Structured problem-solving tools
     • Committed resources to innovation
     • Patents/year

[callout]

1. Pick three to five KPIs from each category that work for your organization.
2. Ensure you have the ability to measure them.
3. Validate KPIs drive the right behavior and achieve the desired outcome.
4. Test/adjust KPIs as needed.
5. Share with the community.

[/callout]

We'd love your feedback. What do you think about the five-minute focus in the last segment of today's show?

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Delays at the grocery checkout line set William Chomley on a retail innovation course. Like most of us who are short on time, a quick stop at the supermarket took longer than he liked. He began ideating on a better way to shop – reinventing the checkout process.

William Chomley, Founder and CEO of IMAGR, joins me in the mobile studio from his home base in New Zealand. He's been working on his retail innovation concept for three years. It's been an uphill trek, but the company is now ready to put the product to the test.

When Will's retail innovation idea sparked, he jumped in head first. Quitting his finance job, he focused on a solution using RFID (radio frequency identification) technology. It was simple: put RFID tags on products and eliminate the checkout line. But it wasn't that easy. He ran into roadblocks, cost to implement and technology limitations to name a few. His business failed.

Will didn't give up on his idea. He reworked it – went back to the drawing board. This time he did the product/market fit research. This involved a lot of talking and listening to retailers, researchers and investors. His new design incorporated computer vision, a form of Artificial Intelligence (AI). A computer with computer vision "sees" and processes information much like the human eye, then performs tasks accordingly.

With a new design plan, Will pitched to investor after investor. Rejection brought him nearly to the "end of his tether". Over 150 investors later, he finally got the funding in 2016. Through all, he held three jobs to keep afloat. Persistent and undaunted, Will kept going through tough times and held fast to his vision.

The SmartCart will undergo trial testing this year. It's a shopping cart equipped with small cameras to capture product data as the shopper places a product in the cart. The cart system is synced to the shopper's mobile phone. Through an app, the shopper sets up the payment method prior to shopping.

Looking back, Will has three points of advice for entrepreneurs.

1. Do product/market fit as soon as possible.

• Make sure what you've created is what customers want.
• Ensure it's commercially viable at a price buyers will accept?

1. "Get in front of as many people as you can."

• He learned through the experience of facing numerous investors
• The rejections/failures helped refine his product and pitch.

1. Look for "smart money."

• Seek investors experienced in your area of innovation who can guide/advise.
• Be picky about who you bring into your business

The best place to track Will's retail innovation: www.imagr.co

If you have a guest you think should be on the show, drop me a note.

If we were to trace the roots of what we do online, what would we assume about the creation of the online community? Whether it's taking college courses or Facebooking, when did it start. The 1990s with the internet. Was that the start of online video games, chat rooms, blogging, online courses? Most of us know the foundation of the internet – the ARPANET. With ARPANET, the first successful network computer message was sent in 1969. Less known is the internet forerunner, the PLATO (Programmed Logic for Automatic Teaching Operations) system. The creation of the online community truly began with PLATO.

Plato said, "You know that the beginning is the most important part of any work."

Before the ARPANET, an interpersonal computer revolution kindled. A group at the University of Illinois Urbana-Champaign created the PLATO system. It was 1960 and thousands of miles from Silicon Valley. The intent for PLATO was a computerized learning system. Ambitious and wild as it may have seemed, by the mid-1960s, the University offered college credit for courses taken through PLATO. Here was the beginning of computer-based training.

Through the 60s and 70s PLATO bloomed into an orange glow of computing innovation. Expanding the purpose for the PLATO System, students, professors, hackers and hobbyists joined the fun. Innovative and sometimes eccentric, this motley group continued adding functions and apps to PLATO. Through the orange glow of plasma screens, a vibrant and varied community ideated, created, and chatted. The creation of the online community emerged.

You might wonder why hasn't everybody heard about PLATO? You're in good company. Enter Brian Dear. Brian has collected data on PLATO for over thirty years. His early career working on PLATO sparked his fascination with its capacity. By the 70s, the PLATO system already had touch screen and plasma displays among its features.

PLATO had fundamental influence on the technologies that we have in our pocket and on our desks. Yet, this amazing system seemed unrecognized, uncredited, unnoticed. By creating PLATO, brilliant minds had invented the future. Now PLATO was slipping into the shadows.

[shareable cite="Brian Dear , Author The Friendly Orange Glow"]I knew even in the 80s that it was something really phenomenal….This was historic, what was going on.[/shareable]

Brian waited for someone to write the book. He could not even find PLATO referenced in computer history books. He feared this important piece of computer history would disappear. Finally, he set out to do the work himself. The result is The Friendly Orange Glow: The Untold Story of the PLATO System and the Dawn of Cyberculture. The book captures the history of PLATO and the creation of the online community around the orange glow.

Want to know the story behind the term "orange glow"? Listen to the story on the podcast.

Find out more about Brian Dear and his book at http://friendlyorangeglow.com/

For large companies, does innovation happen tucked away in a lab? How does a professional services company innovate? I delve into these questions with Michael Whitaker ("Whit") of ICF. He dispels misguided concepts about service innovation. The unique challenges of this industry demand a unique process. Whit shares his process for innovation at ICF.

A global company, ICF delivers strategic consulting services. ICF employs experts in a range of fields. It may seem an unlikely place to innovate. But it's a non-traditional industry creating non-obvious solutions.

Whit joined ICF after ICF acquired his startup, Symbiotic Engineering. He went from a small, nine-person company to a large, global one. Innovation at Symbiotic Engineering may have been tenable. It is a bigger challenge at ICF. He watched efforts to instill an innovation culture. But it didn't take off. ICF lacked a clear pathway to innovation. With advancing technology, ICF recognized the need to keep apace. It was time to get serious about innovation. ICF established Whit's position as President of Emerging Solutions.

Whit employs a "pragmatic agitation approach". The ICF performance engine is delivery of expert services. To provide clients with the cutting-edge, ICF must keep ahead of technology. It's a delicate balancing act.

In the services business…

• profit margins are narrow
• clients are risk averse
• there is no R&D budget
• innovation is not the main focus

You have to weave innovation into the company's daily workings. Service innovation must happen while keeping the performance engine on track.

[shareable cite="Michael Whitaker, ICF"]The vast majority of employees throughout their entire careers have been incentivized and trained for execution, not for innovation.[/shareable]

This industry conditions most employees to execute not innovate. Execution and innovation are different skill sets and mind sets. How do you get the domain expert to think about innovation?

Whit considers his role as supportive and integrative. He works to lay out clear and believable pathways to innovation.

The book Influencer: The New Science of Leading Change has been a good resource. He highly recommends this book to those pursuing service innovation.

Steps to building service innovation include:

• Choose an area to incubate.
• Conduct surveys to assess your organization's culture of innovation.
• Establish a common language of innovation.
• Make innovation management a core project delivery discipline.

• Build training programs to grow innovation skill sets.
  • Teach the language of innovation
  • Encourage employees to share peer stories of innovation
  • Encourage innovation discussions with the team and client
  • Train a subset of employees on spark sessions
  • Coach emerging innovation managers/leaders

To learn more about ICF, visit their website: https://www.icf.com/

You can follow Whit on Twitter at Papa_Whit

On Linkedin: https://www.linkedin.com/in/michaelwhitakericf

Would you like to continue the discussion with Whit? Join him at The Innovator's Community on the Slack channel.

If you know someone who would be a great guest for the show, drop me a note.

I'm searching for real innovation in Artificial Intelligence (AI). A surfeit of AI products leaves me skeptical. Not to rain on anybody's parade, but the term appears on countless products. Even so, some companies do the work of real innovation in AI.

DeviceBits is one such company. This start-up charts a unique path. Their AI customer support suite is distinctly real innovation. AI customer support is new ground and makes a widespread impact. It brings value to people's everyday lives.

Who hasn't reached peak frustration with some new tech product that won't function? You seek answers on the internet and through product instructions. Finally, you call customer service. This heightens the tension. Maybe the customer service agent can't resolve the issue. Or the agent doesn't answer the phone quick enough. At this point, you may do one of the following. 1) vow never to buy that company's products again. 2) return the faulty item to the store. 3) shelf it until something better arrives on the market. From the company's perspective, they lost a customer.

This frustration was the catalyst for JC Ramey, DeviceBits CEO. His previous start-up focused on mobile application development. This was early in the mobile applications market. The business grew from a basic text messaging app to millions of apps. In a short time, the growth of technology was exponential.

During this tech spurt, JC observed customers - including himself, friends, and family. People struggled to understand, use and fix these products. This highlighted an area for improvement: customer support. JC had career experience in tech and telecom. He's also a self-described "ultimate consumer." This gave JC insight from both sides.

DeviceBits' customer support solutions integrate AI. Customer service agents access AI generated knowledge portals. The portals enable quick response and resolution. Another option is AI assisted self-service. Customers can resolve issues on their own using this interactive support. These products exemplify real innovation. They reach beyond incremental improvements. DeviceBits transforms a critical aspect of business.

Key lessons JC shares from his experience (big telecom to start-up):

1. Put yourself in the place where things happen.

• For JC, this was Silicon Valley. The move set things in motion for him.

2. Your team is critical.

• Temperaments and skill sets should complement and sometimes even conflict.
• To garner respect and bring value, team members should know their swim lane.

[shareable cite="JC Ramey, DeviceBits CEO"]Know your swim lane really, really well. And no matter how brash you may appear, everybody respects the knowledge that you have and what you bring to the organization.[/shareable]

Track DeviceBits at https://www.devicebits.com/

Today's Killer Innovations podcast begins Season 14. It's hard to believe the show has run for thirteen years. I'm thrilled to propagate the best of the innovation world. Killer Innovations exists to foster creativity and innovation. This past year welcomed two new resources to stoke the innovation fires. The Killer Innovations mobile studio and The Innovator's Community. I'm excited about the new season and hope you are too.

Are VR/AR (Virtual Reality/Augmented Reality) glasses the future? It might bring to mind an awkward image. People lumbering with bulky headgear. Besides intense gaming, what are the practical uses for VR/AR technology? By refocusing the innovation and having the courage to pivot, GridRaster Inc. reveals that VR/AR technology is not reserved for gaming enthusiasts. This innovative start-up is creating the foundation for a new world.

Seeing Beyond the Bulky Glasses

Rishi Ranjan, CEO and Founder of GridRaster Inc., joins me in the mobile studio to share his insights on this burgeoning technology. VR/AR tech has amazing, unexpected uses. But it's hard work on the road ahead. It's a road with some twists and turns, such as when the GridRaster team made the decision to pivot.

Rishi highlights the complexities of developing infrastructure to sustain VR/AR for the future. Speaking of future, Rishi believes VR/AR glasses will be the next ubiquitous device.

"We strongly believe by 2025, everyone will be walking around with these glasses. But, we have to start building the infrastructure today."

Mobile phone shelved, we will all don a pair of streamlined VR/AR glasses to interact with the world. Think sunglasses with superpowers.

Consumer or Industry: Refocus

Things weren't so clear for Rishi in the beginning. When GridRaster Inc. started in 2015, the focus was on VR/AR for the general public – the consumer. They centered the technology around the mobile device platform. Gaming was the assumed end use.

GridRaster soon realized refocusing the innovation was essential. Their focus shifted from consumer to industrial and retail businesses. Industries can afford to invest in this technology and see a return on investment.

Time to Pivot

Business partner ODG helped GridRaster pivot. They homed in on three use cases - industrial maintenance work, industrial training, and retail business.

Rishi states, "This will be the beachhead - they can build the network based on these use cases." GridRaster continues to develop and refine their technology. As they establish infrastructure, the game's afoot. By refocusing the innovation now, their future customers will have a product that is usable and affordable for gaming and beyond.

[shareable cite="Rishi Ranjan, GridRaster, Inc."]It's hard to change the passion, but you can't afford to lose time in a start-up.[/shareable]

Balance and Adapt

Rishi has two lessons to share:

1. Keep your family onboard with the start-up process.

• Don't lose sight of what's most important – your loved ones.
• Apprise family members of what's going on
• Have balance – don't let your start-up consume your life

2. Be ready and willing to adapt, refocusing the innovation if needed.

• Weigh input from partners, mentors, customers.
• Same input from multiple sources? Might be time to pivot.

Check out GridRaster's innovative VR/AR technology at https://gridraster.com/.

Follow us on the road at The Innovators Studio on Facebook to check out where the mobile studio is headed next.

If you are looking for advice and coaching around your innovation efforts, then reach to The Innovators Network or look into joining the community of innovators that are hanging out at The Innovators Community.

Walt Disney said, "You can design and create, and build the most wonderful place in the world. But it takes people to make the dream a reality." Marco Carvalho would like to share this lesson with a fellow entrepreneur and innovator.

As Marco travelled the world, he discovered the need to reach out to others and extend a hand. Be it mentoring, networking, sharing of information and expertise, innovation doesn't happen in a vacuum.

At thirteen, he teamed with a friend's father to bring internet to his hometown in Brazil. Arriving in Shanghai as a late teen, he confronted the complete aloneness of his situation. A mentor would have made the way smoother. Although the road was difficult going it alone, Marco acquired a gamut of international business development and trade experience.

Marco's dream is in the realm of interactive children's toys. Endeavor is a non-profit organization that promotes entrepreneurs worldwide. Through the support of Endeavor, Marco developed a solid network of mentors and supporters. Now based in California, he continues to expand his vision in interactive entertainment through his company, Immersive Play.

[shareable cite="Marco Carvalho"]When you're an entrepreneur, everybody will tell you that you're crazy.[/shareable]

Technology barriers in product development led Marco to connect with Chirp. This U.K. based company uses sound to encode and transmit data. The U.S. network Marco gained through Endeavor allowed him to further Chirp's exposure in the U.S. He now oversees Chirp's business development efforts in the Americas. This is a symbiotic relationship. Marco uses Chirp technology in his Immersive Play products.

Marco states: "When you're an entrepreneur, everybody will tell you that you're crazy." This didn't deter him. It generated excitement.

Marco's advice for entrepreneurs is two-fold:

1. Mentoring is essential.

• His experience in China highlighted this need
• Endeavor showed him the immense benefit of mentoring
• He mentors and is mentored regularly

2. Innovation takes time. Don't rush it, test it…

• Do your MVPs (Minimal Viable Products)
• Take time to work out the issues
• Don't release a product until your customer base is ready for it

Marco and I had the honor of hearing Eric Ries speak at a CES event. Eric provides an excellent gauge for keeping innovation on track.

• Check out his books The Startup Way and The Lean Startup.
• Eric's advice benefits the entrepreneur getting started, the big corporation, and every innovation driven organization in between.

To check out what Chirp has to offer, visit https://www.chirp.io/

Immersive Play can be found at https://www.immplay.com/

Marco welcomes you to connect with him on LinkedIn (https://www.linkedin.com/in/marcoimmplay).

Seeking an innovation mentor or a community to share what you've learned as an entrepreneur? Join The Innovators Network.

Imagine a major sporting event that you can't sit at home with friends to watch on TV. Maybe you've had to work late or you're a student returning from classes on the subway. You do the next best thing. You take out your mobile device to live stream it. To add to the excitement, you live chat with friends who are streaming the event. Then, you hear your friends cheer. What just happened? You missed it - the winning goal your friends saw first. Only seconds of delay but big disappointment. It's prime time for a live streaming innovation.

South Korean start up company Hecas has tackled this problem. The company focuses on live video streaming solutions. Hoisoo Cho, Hecas Marketing Director, joined me in the mobile studio to discuss Hecas and its live streaming innovation.

In live streaming, latency is the delay between a live event and the time it appears on your viewing device. As Hoisoo points out, what's called live is not in real time because of latency. South Koreans love video live streaming. From sporting events to K-pop to personal broadcasters, South Koreans like to connect and watch in real time.

[shareable cite="Hoisoo Chu"]The seconds of latency will make the difference between users who stay or leave.[/shareable]

Hecas has stepped up to meet this demand for mobile low latency live streaming. With the Olympics hosted in South Korea, the timing couldn't be better. Their customer driven solution has gained traction with big players in South Korea. Companies like South Korean Telecom have tapped into Hecas's mobile live streaming innovation. Now Hecas is ready to break through international markets.

"The seconds of latency will make the difference between users who stay or leave." Hoisoo affirms. For video streaming, I agree - latency is the new metric. It's impact on a variety of applications is going to become more critical.

Two things that Hoisoo learned in the start up process:

1. Teaming with the right people is everything

• Hoisoo was fortunate to make great connections at university – a core group of like-minded friends who had the entrepreneurial vision
• She launched her first start up with these friends

1. Failure can be a good thing.

• University is an excellent environment to initiate a start up – it's a safe place to experiment and fail.
• Failure can offer valuable lessons

Listen to this week's podcast to learn about Hecas. It's journey from a group of college friends to a company working with the largest telecom company in South Korea is inspiring.

Track how Hecas is shaping the future with live streaming innovation at http://www.hecaslab.com/

A video game competition between siblings is one of those simple joys of childhood. But it is no simple thing when one of those children has physical limitations that have kept him from that joy. His smile when at last he can play a virtual soccer match against his sister speaks volumes. Xogo is an accessible innovation that makes things possible for the physically challenged.

People with disabilities are a largely underrepresented group in the U.S. Bansen Labs, the company behind Xogo, focuses on the needs of these people. One of their goals is to make technologies accessible at a reasonable price. Their merging of business and social good is inspiring.

Ray Abel, CEO of Bansen Labs, tells us about this remarkable product. He shares what brought the company from class project to the Cable Labs Fiterator. One of the things that sets Bansen Labs apart is its unique perspective. Dalton Banks, Bansen's Chief of Product, grew up with a person who was physically disabled. This was his inspiration behind the class project.

When it comes to accessible innovation, Ray feels that those who have a personal connection have the advantage. The result is a product that looks better, works better, has a broader range, and a lower price.

When you think of gaming, you may not think life changing innovation. From its beginnings as a class project, Xogo has emerged as an innovation with a broad range of uses. This technology interface product enables people easier access to and control of home electronics.

As the Xogo technology matures, its potential uses have expanded. If you know someone who gets frustrated with technology in the home, consider Xogo. It simplifies and streamlines home electronics. Bansen Labs has created an accessible innovation that opens new worlds to people.

To learn more about Bansen Labs and Xogo, visit myxogo.com and www.facebook.com/myxogo.

Innovation can spring out of ideating beyond your own needs. Look to others' challenges to shine a light on prime areas for innovation. Innovation can also come from dire need. Both cases push innovators to ask questions. What can I do to make this better? Can innovation through collaboration improve or accelerate the process?

John Chang, co-founder of Willow, discusses his solution to an overlooked problem. A mechanical engineer, John had the technical background. But the conversation with his wife about the challenges moms face launched Willow Pumps.

As part of a business incubator, John searched for areas of innovation. The spark of an idea began with his wife's input. It became an innovation through collaboration with mothers – relatives, friends, business associates. He asked these women "what are the unmet needs of mothers with babies."

[shareable cite="John Chang, Co-Founder of Willow"]The most gratifying result: knowing this product has helped women and babies. [/shareable]

The recurring theme: the breastfeeding pump is overdue for innovation. The products on the market were bulky and noisy. The basic design had not changed much since the pump's development. In designing the product, John focused on the target customer.

Now available, the Willow pump is discrete, quiet, handsfree, and mobile. The most gratifying result: this product has helped women and babies.

Learn more about Willow at www.willowpump.com.

On the battlefield getting the right product could be a matter of life or death. The problem – long lead times for innovations. As a soldier, Jay Rogers felt open sourcing and crowdsourcing could accelerate military vehicle innovations. The faster turnaround would benefit the military.

Jay founded Local Motors to build upon this idea of innovation through collaboration. His first success was the Rally Fighter, the world's first crowdsourced vehicle. It reached market within one year.

Justin Fishkin is Chief Strategy Officer for Local Motors. He is committed to impact investing and the environment. The company mirrors these values. At the core of Local Motors' business are co-creation and microfactories. A microfactory is small volume production in local markets. This sustainable way of doing business has future impact. Justin believes it "could solve the issues globalization may have caused in the early days of outsourcing."

Local Motors' innovations are a fusion of ideas from contributors in all walks of life. The company exemplifies innovation through collaboration. In a sense, Local Motors is bridging the local and the global communities. Drawing innovative ideas from the far reaches of the world and bringing production down home to local communities.

• Check out Local Motors' Olli, a self-driving vehicle. Watch it in action at CableLabs on Youtube.
• Track the latest with Local Motors at Localmotors.com.
• Join the Local Motors innovators at the crowdsource platform Launchforth.io.