by CIO Staff

Watching Is Knowing, Knowing Is Winning

Aug 22, 20055 mins

On a gray, misty San Diego morning, CIO magazine Editor in Chief Abbie Lundberg kicked off the 7th annual CIO 100 Symposium, addressing a packed house at the Hotel Del Coronado on Monday, August 22, welcoming hundreds of CIOs and setting the agenda: boldness in innovation and business transformation. Boldness, to be clear, is not foolhardiness. As Lundberg said, when mountaineers approach a climb, getting to the top is optional; getting down safely is not.

Lundberg then introduced Jonathan Zittrain, Chair, Internet Governance and Regulation at Oxford University, and Berkman Visiting Professor at Harvard.

Zittrain sees a four to five year build-out of the Internet, which shortly will not resemble the Internet we have today. What’s bold today—like FedEx giving its customers real-time information, the same information FedEx has whenever it has it—will soon be commonplace.

Zittrain then introduced the morning’s first speaker, Patrick Whitney, Director, Institute of Design, Illinois Institute of Technology, which has developed everything from wireless headphones to baby strollers you can push with one hand (without traveling in circles).

Watching Is Knowing; Knowing Is Winning

Whitney acknowledges business turn toward top-line growth and not just cost cutting.

In a survey of retailers, Whitney’s group found a “manic craze” for front-of-the-store innovation, rather than supply chain improvement. “The common view of design is that it takes things from engineering and makes [them] look pretty,” said Whitney. But actually design should mean making things efficiently—taking a water flow device from something with over 400 parts to something with less than 100.

The gap that design seeks to bridge, says Whitney, is between innovation in technology and business models and the lack of innovation in the way we live, work, learn and play every day. Business, says Whitney, knows less about its customers than it did 20 to 30 years ago. Thirty years ago, for example, home builders could build for a family with two or three kids and hit a huge demographic. Today, that traditional household represents only 6 percent of the home-buying market. Now, what kind of home should builders be putting up?

They don’t know.

And if you don’t know who you’re building things for, you don’t now what to build. You may know how to do something, but you may not know what to do.

The winners of the future will know the patterns of daily life. To divine these patterns, Whitney looks at three factors: The cognitive (how people think); the social (how people interact) (if, for example, everyone works in teams, why do they all work on individual PCs?); the cultural (how groups act) (people who drive sports cars, unlike people who drive family sedans, want their cars to be customizable).

The key here is observation; watching and internalizing the way people work and play. For example: in Hong Kong, parents are spending two to three hours helping their kids with their homework. Response: Turn one wall of the living room into a white board. (Sounds like hell, perhaps, but we love our kids and want them to succeed, right?)

What’s Next?

You have to look at how people are living. For example, as our population ages, people are taking more pills. Managing all those pills is a challenge, especially for the elderly. Whitney’s group, working with Motorola, thought a pager, underwritten by pharmacies, could remind people when and how to take their meds—a plus-plus solution for consumers and healthcare providers.

Looking for investments at the economic base of the pyramid, Whitney’s group looked at the slums of India. What they noticed was a huge amount of economic activity going on within the homes, serving the upper scale restaurants and hotels and shops that the slums border on. Whitney showed a short film about the life of Indian slum dwellers, waking up at 3 o’clock each morning to line up to buy . . . water. If they get there too late, no water. Trucks carrying water cannot navigate the narrow streets, so the people must go to the water.

The opportunity Whitney saw was to create water containers that could be brought into the slums and purchased there, improving the quality of life for the people, and creating an increased source of profit for the water supplier.

Again, it’s crucial to watch the way people live, and not make assumptions, often based on ignorance. Business, in short, has to pay attention, and has to move quickly. Observation, says Whitney, may not provide answers, but it will provide the questions—which may be more important.

Q&AAfter the talk, Whitney took questions from Zittrain and the audience of CIOs. How successful, Whitney was asked, is innovation? Right now, according to Whitney, it’s around 2 to 10 percent. Everyone, he says, wants to be bold, but how many who want to be bold also want a 100 percent success rate? That, says Whitney, doesn’t happen. But moving the success rate from 10 to 20 percent is a huge success.

Whitney was asked by a CIO in the service business how a company that’s not making a physical product can use observation of customers to improve the business. Most successful products, said Whitney, are successful because of their service element. Luxury cars, for example, succeed or fail competitively not on horsepower, or gadgets, but on the service plans they offer.

Another CIO asked Whitney what the difference is between watching and listening. According to Whitney, people can only tell you about what they know. But people only know a small percentage of what they do. Watching people in a structured way produces magnitudes more of information. Ask, for example, someone to describe what they do to prepare breakfast, they’ll only be able to tell you about 10 percent of what they do. Watching them is a much more robust source of information.

—David Rosenbaum