Recently I’ve written about how Behavior Space predicts new product or service successes. This article uses a recent announcement by FORD to drill down into value creation by uncovering the role Relationship Space plays. As you’ll see, size of relationship space determines new product success.
Ford recently announced an agreement with Microsoft to incorporate its Hohm technology into Ford’s new Electric Vehicle. As an article in Fast Company explains
“. . .the home energy management service will be integrated into the Ford Focus Electric in 2011, another unnamed hybrid in 2012, and a third, yet unnamed hybrid in 2013. Hohm will assist drivers in figuring out the best time to juice up their vehicles based on when electricity rates are lowest. The service might indicate, for example, that electricity is cheapest between midnight and 6 a.m. on a certain day–a potentially money-saving piece of data. In addition to saving drivers cash, the feature will also hopefully help utilities reduce consumption during times of heavy stress on the electric grid.”
In previous articles I’ve written about how new behavior space helps create value, specifically, I’ve written about the Apple iPad, and the Google Nexus. The concept I introduced was how a new product or service creates value by allowing new behaviors to emerge with the product or service only as good as the new behaviors it enables the user to express.
Well, that’s not entirely correct. New behavior space is simply a stepping stone to where value is actually created.
Let’s look at the Ford example above to understand why. While Ford’s New Electric Vehicle has many new capabilities, I’m only going to focus on the Hohm system and the fact that it will help users “figure out the best time to juice up their vehicles based on when electricity rates are lowest.”
In this case, the Hohm system enables the user automatically to pre-schedule when to buy energy (electricity) based on reliable forecasts of energy cost. That sounds neat. Instead of being at the mercy of daily price swings in gasoline I now have more control over the price I pay for energy by scheduling “fill-ups at home” when energy costs are lower.
So a new behavior emerges – pre-scheduling energy fill-ups. But, there isn’t really any value in the behavior by itself. Who cares that you can pre-schedule? The benefit is in lower prices for energy, not in the behavior that enabled it.
So do all behaviors have to end in lower prices to create value? Of course they don’t. There’s more going on here. I’m going to take a moment and introduce the new concept of Relationship Space. And then, tie them together.
Life Equals Relationships
All of us exist in time and space. As we move through time and space we interact with the things around us. So at its most fundamental, our lives are comprised of all the many and varied relationships we have with:
time (when we are)
space (where we are)
ourselves (who we are)
other people (by themselves and in groups)
objects (inanimate and living)
ideas (how and why we are)
Of course it’s very complex and interactive. But, if we could add up all our relationships, taking into account the good and the bad, conceptually we could measure the size and quality of our lives. We could compute for ourselves our Relationship Space.
So what creates value? Value is created when you improve someone’s Relationship Space by making it bigger, or improving its quality.
Value Equals Growth in Relationship Space
So let’s go back to Ford and Hohm. So, the Hohm system enables a pre-scheduling of fill-ups to emerge (a new behavior). That changes the users’ relationship with an object (the car), and themselves. The relationship with the car changes because the price to operate goes down. The relationship with themselves changes because they feel more in control. To receive these two relationship benefits all they have to do is adopt a new behavior – pre-schedule fill-ups. And if Ford is smart, they will make the actions to do the pre-scheduling very easy. (Apple easy mind you)
Summary
Our lives are the summation of all our relationships (Our Relationship Space).
Value is created when our Relationship Space grows. (Value = Improvement in quantity or quality of Relationship Space)
New behaviors change our Relationship Space (both positively and negatively).
New products and services create value, versus mimicking existing value, when they enable new behaviors to emerge which improve Relationship Spaces. (iPad, Wii, Hohm system)
The actions a user must take to allow the new behaviors to emerge plays a role, too. (More on this phenomenon in later posts).
So, when thinking about new products or services, work your way through the new behaviors your product or service will create, and how they will impact your customer’s Relationship Space.
Questions To Consider
Test yourself with the following by thinking about a recent purchase that excited you.
What were your new behaviors?
Which relationships did it improve?
How did it improve them?
Oh, and if you’re not convinced about life equaling relationships, see if you can describe anything in your life that is not a relationship in one form or another. blog comments powered by Disqus
At Ennova, our client companies thrive, not just survive, through The Own Your Future ProgramTM by: knowing their value, growing their value, differentiating their value, reducing their risk.
