iba bootcamp module 2 inclusive innovation - Inclusive Business ...

0 downloads 214 Views 3MB Size Report
To visualize the cash flow, participants of a focus group are provided with a calendar with each month of the year. They
WELCOME TO IBA BOOTCAMP INCLUSIVE INNOVATION MODULE 2 AUTHORS GERWIN JANSEN

All use, reproduction and distribution of this work is subject to a CC-BY-NC-ND license.

MODULE 2:

DEFINE WHAT INSIGHTS TO INNOVATE ON The early phases of inclusive innovation processes are full of uncertainties. First efforts of discovering and defining will even cause more uncertainty as they result in more new questions than answers, such as: ‘How does this particular discovery X impact my initial thoughts? and ‘Which of my new insights ‘X, Y, Z’ should I act upon first?’. Insights are based both on global trends as well as local developments. This module provides guidelines for collecting insights and defining strategies that not only make your innovation a viable business case in its context-of-use but also allow for scaling in other markets.

VIDEO MODULE 2

GUEST VIDEO 1

By Gerwin Jansen, BoP Innovation Center

By aQysta

PART I: KEY CONCEPTS

INSPIRATION HYDRO POWERED IRRIGATION

The need for innovation may arise in different ways. The venture aQysta was initiated based on a very personal experience. The founder Pratap Thapa lived in Nepal and saw with his own eyes how his family struggled to irrigate their farming land as water is not easily accessible and costly. The same applies to energy which is required to pump water up to higher levels of land in the mountainous areas. Pratat Thapa observed that most farms are situated nearby water streams which provide an intermittent energy potential. Based on these insights aQysta started developing a hydro powered irrigation pump for smallholder farmers. The venture is scaling its business to other markets and geographies, which requires an adaptation of the product and business model to meet requirements from the particular contexts and stakeholders involved.

DEFINITION & EXERCISE Insights | describe the capacity to gain an accurate and deep understanding of a person, thing or situation. Insights are crucial for the discovery of areas for innovations and for defining boundaries at the same time. Innovators collect insights in different ways, from a global level to a personal level, and through different methodologies.

QUESTION 1:

Describe two insights that Pratap Thapa, the founder of aQysta, had while living in Nepal.

PART II: STAKEHOLDER ENGAGEMENT

CONCEPTS When embarking on an inclusive innovation journey, innovators are often occupied discovering and defining their own ideas. There is a risk of postponing stakeholder engagement. Experienced innovators adequately and timely approach and consult stakeholders as it gives them the ability to rapidly change directions and adapt to changing demands when the innovation is not defined yet. Stakeholders are a source of insights themselves or may influence where to look for insights for your innovation.

IDENTIFYING STAKEHOLDERS

The most crucial aspect of stakeholder engagement lies at the start of the innovation process when defining what it is that you need to discover and who the stakeholders are you need to engage with. At early stages you interact with a broad group of internal and external actors relevant to your business. This may include any actor who is affected by, has knowledge of, or influences your business in the development, distribution, and use of the solution (e.g., owners, managers, personnel, investors, suppliers, customers, competitors, or state and community representatives.). Be prepared to put aside your own cultural assumptions. You may, for example, need to speak to village chiefs or religious leaders that influence the acceptance of innovation projects inside their communities.

For each of your stakeholder you can assess and define their importance and influence: Importance:

How does your product/service concept affect the interest of this party and how much effect will/does it have?

Influence:

How great is the influence of this party on your business environment and potential success of your innovation project?

When you would put these two dimensions in a matrix as shown below, you can identify key stakeholders for which early engagement is most crucial. They are usually the ones of high importance and influence.

INTERACTING WITH STAKEHOLDERS

There are different ways to facilitate the interaction with your stakeholders. For example, stakeholder dialogues can occur in a large forum or in smaller groups. When stakeholders are at the BoP, particular methods may be required to adapt to their culture. This engagement should not be underestimated as some of the stakeholders you interact with may become partners and will co-create your innovation process. Succesul innovators that set out to build a new venture are creative with their available means: who am I?, what do I know?, what do I have? and whom do I know? Knowing your key stakeholders gives a head start as committed stakeholders will influence the original idea into one that a whole network of stakeholders are committed to.

INSPIRATION The Mobile Money Transfer Service M-PESA started its innovation journey in mid-2003 when Vodafone’s proposal on financial empowerment was awarded a funding by UK’s Department for International Development (DfID). As one of the first next actions after initial research and proposal writing, Vodafone conducted a series of open workshops in Nairobi and Dar es Salaam to brainstorm with banks, microfinance institutions, technology service suppliers, NGOs involved in microcredit and telecommunication- and financial sector regulators. Jointly they discussed ways to increase access to financial services by boldly questioning themselves: “Assume that the technology can do anything you want it to; what are the biggest challenges you face in growing your business or increasing access to financial services?”. The workshop sessions were a great source of insights for Vodafone to discover and define its next actions.

EXCERCISE QUESTION 1:

Who are your key stakeholders based on their importance and influence?

QUESTION 2:

What stakeholders have you overlooked (or are easily overlooked) in the early stages of the innovation process?

QUESTION 3:

What recent discovery of insights from stakeholder engagement required / requires you to take a deeper dive and gain more insights on?

PART III: COLLECTING INSIGHTS

CONCEPT The Base of the Pyramid (BoP) is a compelling next billion market for inclusive innovation. In total the BoP represents a $5 trillion market (World Bank Group) including dominant sectors like food and nutrition ($2.3 trillion), clothing and personal care ($405 billion), energy ($317 billion), ICT ($206 billion) and water ($32 billion). There is much information available on the global developments of these different sectors which are a valuable resource for inclusive innovators. Global trend reports will inform you about market opportunities for your business. However, they do not give you the context specific insights required to develop tailored propositions for your target group. Hence, it is important to differentiate and examine different kinds of trends ranging from mega trends at societal level (10-30 years) to micro-trends (typically 1 year) that describe the evolving preferences of consumers. Demographic, economic and social trends are often slow, while political and technological trends may occur at a much faster pace at the BoP. The increasing adoption of (digital) technologies in these regions will increasingly influence societies and economies at the BoP. Trend analyses are usually performed at early stages of the innovation process as it provides interesting discoveries for new products or services. Besides that, trends allow you to identify the risks involved when introducing innovations.

GLOBAL INSIGHTS SECTOR SPECIFIC RESOURCES

Quantitative data resources from national bureaus of statistics, donors or NGOs (see the ‘Resource list’ at the end of this module for a number of relevant data sources) give insights in current market size and possibly developments of these markets in different geographies. When developing new solutions for safe drinking water, for example, you may want to find out how many people currently have piped water, what the roles of different stakeholders such as local authorities and NGOs are, and what relevant legal aspects such as regulations and water quality standardization should be considered. You may refer to the global trend analysis reports of Engineering for Change in which different resources are combined into an overview for each sector.

SOCIETAL MEGATRENDS

Global trends in emerging economies influence the innovation that you can realize. The following 4 trends are of significant influence. Depending on when you plan to introduce your innovation, you will have to explore how these will influence the impact that you would like to create. For example, when developing innovations for nutritious food, you might think of how the increasing penetration rate of smartphones at the BoP and the rise of individuals might influence how people want to purchase and consume their food in the future.

Demographics and social change | The median age across Africa is 19 years (compared to 37 in the US and 40 in Europe). Culture and religion remain to play an important role, even among new generations. For instance in Ethiopia, according to the Coptic Orthodox tradition of fasting periods, the diet is mainly vegan, cooked with either oil or water. No animal products are allowed which is critical to understand if you want to, for example, innovate in the dairy sector in Ethiopia. Rise of the individual and WE-economy | Low-income communities show a rise of individualism while most retain a strong sense of community and collaboration. In continents like Africa, the “I” and the “We” have an unique correlation in relation to income as they stay very much interlinked. While the individual aspirations rise, people cherish bonds with family and friends and remain to rely on the influence of others. Acceleration of technology | There is an increasing pace at which technology is adopted in low-income economies and the way it influences innovation. Facebook reaches 150M users in 5 years, 3 times more than for the same number of mobile phones users to be equipped in the late 90s’. Frugality | in a world of scarce resources, doing more with less becomes an imperative when innovating. Entrepreneurs within low-income markets have to cope with sub-optimal conditions. They often create new, low-cost products or technologies using few resources. By removing the nonessential features of a product, they reduce the complexity of these goods as well as the costs.

Yellowwood (2015), African Attitudes: Marketing Beyond The Numbers

Other trends include urbanization, the rise of the maker movement and the increasing relationships between different Southern countries (e.g. Africa with China).

EXCERCISE QUESTION 1:

What global sector trends can you find here which you have to consider for your innovation?

QUESTION 2:

Which of the societal megatrends mentioned will influence your innovation in the future and how?

FIELD INSIGHTS As described above you can consult the web to discover a lot of relevant global insights. They, however, do not provide everything you need to know. When it comes to the real “job that needs to be done” for inclusive innovation it is about BoP consumers and entrepreneurs in a particular context wanting to engage with your product or service. Inclusive Innovation is challenging because of the many unknowns and rapid changes of customer behaviour and micro-trends at the BoP. To overcome these knowledge gaps you may need to get down to the field level to collect insights. Naturally, you would first want to decide upon the market or context that you want to target with your innovation. You may consider factors such as geography (e.g. India or East Africa), location (i.e. urban, peri-urban or rural) and the income levels of your target group. Zooming into a particular context brings to light needs and constraints that are typical for that specific context (you will have to consider this limitation in order to ensure the scaling of your design; we will discuss this in the next part of this module). The insights you collected from the field are mostly ethnographic which will help you to describe and bring to life your customer and other stakeholders in terms of their attitude towards the “job to be done”, their behavior, values and living/working situation.

Field research in low-income environments requires specific methods, often other than those used in traditional market research due to the lack of data, interviewer bias, cultural gaps and customers’ lack of experience. There is a myriad of consumer research methods that you could use which are mostly qualitative at this stage. There are no golden rules for choosing research methods and it is important to understand that each has its weaknesses and strengths. Here are 3 methods you may consider: • Self-documentation | To get unbiased insights into people’s life, it is useful to ask them to observe themselves. Invite them to become active researchers in documenting their day-to-day activities, either by writing it down in a diary or by using disposable cameras or mobile phones to take pictures of the things they particularly liked or disliked. This can grant you insight into areas that are hard to access from the outside, such as family homes or everyday routines, like cooking. • Money flow charts | Talking about money is difficult. BoP households may not be able to say how much they earn per month, because they receive their income either on a daily basis or once a year during harvest time. Or they are afraid to admit how little they earn and spend. To visualize the cash flow, participants of a focus group are provided with a calendar with each month of the year. They explain their activities in the course of the year, which shows when they sell their crops and have money. This can lead to discussions about market prices and amounts of crops that are

sold. Participants can also explain how they sustain themselves during months when they have no money. • Activity mapping | It is important to find out if people understand, for example, the impact of kerosene on their health. Find out what knowledge customers have, what products they use and how they think about them. During this activity, participants map what they do during a day or week to understand local practices or the lives of local people. You can use a simple timeline and some icons to support this discussion. This can show you what needs people have in the course of the day and start discussions how much they like or dislike solutions they have used thus far.

INSPIRATION BoP Innovation Centre has started applying the SenseMaker research method within different projects. In Bangladesh for example, the team captured 800 stories among the farmer households, specifically around nutrition and hygiene topics. Eight nutrition officers equipped with iPads are collecting the stories in their districts. After a story is recorded, the officer uploads it to the database. Researchers then run quantitative reports to detect interesting patterns as insights.

EXCERCISE QUESTION 1:

What kind of insights do you need to collect from the field to get a better picture of the context your innovation will be implemented in?

QUESTION 2:

Which of the field research methods do you consider most effective to collect these insights?

ANOTHER WAY TO COLLECT INSIGHTS WHAT WE CAN LEARN FROM EXISTING SOLUTIONS

At this stage of the innovation process you are still miles away from the development of concrete ideas. Nonetheless we will already mention something about how insights lead to the design of new products or services. 1. When looking at a product or service, the first things you observe are the attributes or material features such as shape, weight, dimensions, colors and materials. 2. Secondly there are the functional features. A function is always described by a verb and an object (noun) e.g. a car enables the driver to drive fast. You may distinguish between the main function(s) and sub-functions of a product or service (these can be depicted in a function tree). Besides that, there are different types of functions other than the main function such as supporting or even unwanted functions. 3. The third layer comprises the experiential features which are the product values that people may aspire for economical, social or cultural purposes.

Let us take a ballpoint pen to exemplify this. Its material features include the plastic body and click mechanism. The primary function of a ballpoint is to allow people to write something on a paper (or any other kind of surface). Amongst the secondary functions are the possibility to retract the tip of the pen when not in use to avoid stains. And how about its experiential features? The ballpoint pen was invented because people have the desire to communicate and express themselves through writings or drawing. In low-income countries carrying a ballpoint pen may even give people status as it demonstrates literacy. Innovators often look at solutions that are already out there. We can use the layered reasoning process described above as a means to distill insights from existing solutions. Let us call this reverse engineering. In this case we are primarily concerned with the experiential features as they may reveal relevant insights regarding the pain points and desires that people have.

WHERE TO LOOK FOR EXISTING SOLUTIONS

There are three main areas where you can look for existing solutions. While these areas might not entail the specific context you are targeting, there is still much to learn through the reverse engineering process. • Learn from existing solutions for the BoP | Nowadays you can easily access solutions developed by other inclusive innovators, for example by consulting online databases such as the Engineering for Change ‘Solutions library’ or the Inclusive Business Accelerator.

• Learn from grassroots solutions | Another area to look for innovations is what BoP communities develop themselves. Their ingenuity results in frugal solutions that meet their particular needs and desires. For example, children making toy phones out of scrap materials which shows their aspiration for digital literacy. • Learn from solutions in developed countries | This area may not seem so obvious but the technologies find applications in developed markets may reveal opportunities for the BoP. For example, you may consider what elements of P2P services such as AirBnB are also relevant for the BoP and how similar mobile platforms can also be used within that context to take away people’s concerns about liabilities

INSPIRATION PROOFS is a 4-year project in Bangladesh that aims at providing smallholder farmers with access to appropriate technologies to improve their productivity and quality of produce. The project started with a sector studies to define “jobs to be done”. After that the team conducted a desk research to identify possibly relevant agrotechnology innovations that were successfully deployed in other markets around the world. In a 2-day workshop we looked at six of those innovations and screened each one of them in order to take out elements that would be relevant for the context of Bangladeshi farmers. One of the innovations was small-scale fish feed production using food waste streams in a farmer’s village. The team agreed that the most important insight here was the desire of smallholder farmers to become independent and not rely too much on dominants corporatives. This insight was used to set up a pilot for improved fish feed sourced from a company that aims at empowering farmers.

EXERCISE QUESTION 1:

Find an appealing solution that addresses the same or similar needs you want to address with your innovation and define the material, functional and experiential features of this solution. You can use the Engineering for Change ‘Solutions library’ (the website is still in beta version so you will have to sign up) or other resources such as Inclusive Business Accelerator (you can go to ‘Ventures’ and then search by sector).

QUESTION 2:

Think of the needs or desires that are satisfied by the experiential features of this solution and conclude with writing down what you can learn from this for your own innovation.

PART IV: CONTEXT VARIATION

CONCEPTS LOOKING AT MULTIPLE CONTEXTS INSTEAD OF JUST ONE Design approaches like Human (or user) Centred Design have shown positive results in delivering tailored offerings to a specific context. Focusing on a one-use context keeps the innovation challenge manageable (e.g. developing pico solar lights for rural households in a particular province in Mozambique). However, an issue is seldom isolated or experienced in one context only. By limiting the scope to one context and optimize the solution for that context, these solutions cannot easily be scaled to new contexts like regions, countries, segments and therefore ultimately have limited relevance. Hence, there is a need for a new approach that actually makes use of different contexts instead of separating them.

Context Variation by Design (CVD), developed by Delft University of Technology, provides such a kind of approach and mind-set. It has as a starting point that the complexity of contemporary society should be acknowledged and worked with to achieve better results. CVD purposefully makes use of the reality of complexity instead of simplifying it away. Acknowledging this complexity in the process does not necessarily lead to more complex solutions as we will show below. For many innovators the concept of “looking outside you own domain” and “getting inspiration elsewhere” are nothing new. CVD provides guidelines on how to more specifically find and use that outside inspiration. Although this approach is not a prescriptive step-by-step method we will provide guidelines to practice with it.

GETTING TO A SHARED SOLUTION SPACE

It is important to realize that an insight found in one context is never unique. It may have specific contextual details but the same or very similar issues occur elsewhere as well. CVD allows you to create better solutions by connecting these different parts of reality. Exactly because the contexts are different (stakeholder views, culture, legal system) you create a multiform analysis of the problem and bringing together insights from different contexts allows you to build collective intelligence, instead of specific limited mono-contextual intelligence. These insights interact in a ‘shared solution space’ as shown in the image below. It is not just the product/service and its features you can look at. The main contextual variation might be in marketing, distribution, the local partners etc. You may think that the result of this process is a universal solution but it is not. It can still be a range of products, with any degree of overlap; or even still different products. However, the point is that by combining the insights from the different contexts in this shared solution space the problem analysis and process towards solutions will be much richer,

P = PRODUCT OR SERVICE M = MARKET S = SOLUTION

in particular the following results can be expected: • requirements may collide, so creative tension is higher, leading to more creative solutions; • combining insights from different contexts reveals similarities, expected and unexpected ones; • even if the short term plans for entering contexts include only one context, the initial solution for this context will be better because it has been based on a richer solution space; • on the other hand, if more contexts are planned to be entered soon, by using the shared solution space, solution variations (with any possible range over overlap) can be developed and implemented simultaneously. That would create some operational efficiencies. Contextual variations may be expressed in modular or variable elements; • the CVD mind-set also allows the development of a more integral “multi-context” business models”, for instance one where sales in one context cross-subsidizes others, or the narrative from one context is a crucial part of the sales strategy for another which is employed by WakaWaka Lights. Summarizing, the main point of CVD is that combining insights from different contexts early on in the innovation process leads to insights that would at best have been unlikely based on mono-context information. First of all, solutions will be more creative and arguably better. Secondly, contextual variations are developed and implemented quicker and therefore larger scale impact is achievable sooner against lower overall costs.

INSPIRATION Below are two examples of how CVD led to richer shared insights (these are taken from real cases but details have been left out due to sensitivities).

CVD EXAMPLE 1: SYNERGETIC INSIGHT

A gasifier stove project was executed in two very different contexts (countries) that were however both on the ‘wish list’ of the producer. The team combined insights from both contexts in a workshop setting with people with design thinking capabilities. • From context 1 a main insight was the necessity of the product giving feedback to the user, triggering them to take a certain action. The likely design implication for context 1 was: create a clear interaction manual on how to interpret the feedback. • From context 2 a main insight was that it was desirable to train users how to detect problems in time. The likely design implication for context 2 was: develop a training that keeps the increase of operational costs as low as possible. • The shared insight from both contexts is: ensure that the feedback by the device to the user is so intuitive that you do not need extensive training nor manual. Hence, the team decided that the design implication was to work on intuitive use cues as well as minimise the number of situations where the user actually needs to act. This led to different and better ideas for the eventual solution design which could still be translated to different contextual variations if necessary.

CVD EXAMPLE 2: HIDDEN DESIRABLE REQUIREMENTS

The team looked at two different contexts for the development of a maternal health care device. • In context 1 portability and flexibility (adjusting position) of the device was considered essential. • In context 2 the portability is a nice-to-have and the flexibility was not considered automatically by users or solution designers. When “confronted” with the opportunities of a more flexible and portable device the advantages of these could immediately be seen for and by users in context 2; • If context 2 would have been explored in isolation, the requirements regarding portability and flexibility would likely not have surfaced. By combining the issue analysis with the one for context 1 (i.e. acknowledging the multiformity of the design challenge), the requirements could be readily assessed as relevant after all, and even be developed into extra sales arguments for context 2. When the team would have had to add these characteristics later in new versions this would only have been possible against high extra costs.

EXCERCISE You may practise the use of the CVD mind-set at the beginning of your innovation process or later when you already have your final prototype or first series and you are preparing for scaling. Instead of scaling to one new market, you can then – if only as a thought exercise – try to include several contexts in your process for this next step. Since it is an exercise, you can suffice with between 5 and 10 insights per context.

QUESTION 1:

Choose 1 or 2 contexts that are different from the initial context you are targeting with your innovation. This can be a context in which you may want to scale your solution in the future. You will get most out of the exercise if that context is rather different from your current target context (change an important variable such as continent, urban/rural or income level).

QUESTION 2:

Put the insights from your initial target context and the ‘new’ context(s) together in your shared solution space and create “shared insights”. These can reflect similarities, differences or, preferably, synergies which are insights that move beyond adding or subtracting but that really give you a new perspective (this is the part that does push your creativity).

QUESTION 3:

Now think of what design implications you can derive from the “shared insights”. You can decide for yourself whether you want to aim for one solution (product/service) with different modules

and variations or whether you develop distinct variations that are however based on these shared instead of mono-context insights.

QUESTION 4:

For at least two design implications (1) reflect whether they guide you towards better solutions and (2) whether that would have been possible based on insights from just one context.

ASSIGNMENT

ASSIGNMENT For this second module, you will have to recap the main elements that you have worked on. Answers will be given in the online assignment section of module 2.

QUESTION 1: WHAT WAS ONE OF THE FIRST ACTIONS THAT THE VODAFONE TEAM UNDERTOOK WHEN THEY RECEIVED FUNDING FOR THE DEVELOPMENT OF M-PESA? A: B: C: D:

Conduct a large customer research study on mobile phone usage Sit together with all kinds of stakeholders to learn from them Hire someone from Google to design the application Apply for patents in Africa

QUESTION2: WHICH OF THE FOLLOWING CONSUMER RESEARCH METHODS AIMS AT ELIMINATING THE RESEARCHER’S BIAS? A: B: C: D:

Self-documentation Surveys Focus groups Activity mapping

QUESTION3: WHEN LOOKING AT EXISTING SOLUTIONS, WHAT KIND OF FEATURES GIVE YOU

INSIGHTS ON WHAT PEOPLE WOULD LIKE TO ACCOMPLISH IN THEIR LIVES WHEN USING THOSE SOLUTIONS? A: B: C: D:

Material features Existential features Functional features All of the above

QUESTION4: WHAT ARE POTENTIAL BENEFITS OF PRACTICING CONTEXT VARIATION BY DESIGN (CVD)? A: B: C: D:

It leads to new insights It leads to more creative solutions It leads to scaling against lower overall costs All of the above

IBA BOOTCAMP MODULE 2 AUTHORS: GERWIN JANSEN

Licence All use, reproduction and distribution of this work is subject to a CC-BY-NC-ND license.