Two quotes from a recent New York Times piece on why user research in invaluable get to heart of why consumers and companies need to talk.

“I was intrigued by the fact that people in the microcontroller industry won’t actually be the people who invent what they’re used for,” Mr. Ford said. “If there is a guy who knows about microcontrollers and a pig farmer who knows about pigs, it will be the pig farmer who will see how to automate feeding his animals so he can sleep more.”

“I want to see how you get people to experiment. Maybe a washing machine repair man will figure out how to get the machines to report back to him and revolutionize the machines to get a competitive advantage. The point is that I don’t know what they’ll be used for.”

Quotes are from a researcher leading the efforts of ARM to put kits for microcontrollers in hands of everyday people. The project is named mbed.

This article inspires me to remind people that we know our hesitations when it comes to purchasing and sometimes, we the consumers, know how to solve the. User research brings this type of insight back into the organization for the different teams to use as fodder in their work – and after a few sets of iterations, we may see a product that does something useful for people.

From the New York Times, You Too Can Join the Internet Of Things, September 20, 2010.

There is an interview with Prith Banerjee, director of HP Labs, in the recent McKinsey Quarterly about how HP structures its research to achieve innovation. Four highlights below.

#1: Balance Different Business Needs Using a Portfolio

Managing innovation through a portfolio approach took HP Labs two years, Mr Banerjee. That’s not bad for a large company. The point of the portfolio was to balance the needs of business units with the long-term growth of the company depends on innovation.

Research is divided into three areas, each getting 1/3 emphasis.

1. Basic research that might “change the  state-of-play.” This work is given five to fifteen years.
2. Product  research that is tied to an existing product and has a time line of 6 months to 18 months.
3. Applied research blances the extremes of basic and applied research. This segment has business impact but has a longer time line of two to five years.

#2: Get Close to the End-user, who doesn’t live in America (“the next billion”)

HP has its seven labs around the world. The reason R&D is in India and not  Palo Alto isn’t because of the cost of labor. The reason is to bring the researchers close to the end-user. Researchers need to be part of the context they are developing for.  India has a billion people, 70% of whom have cell phones but only 5% of whom have a computer. Computers are comparatively expensive, Mr  Banerjee says, yet people can afford comparatively expensive items (scooters, TVs) if the items have a perceived value.  Computers are not perceived as valuable enough to own. Obviously, HP Labs would like to solve that problem and that’s why they have a location in India.

#3 Managers Must Create Incentives

Providing the right incentives and measuring the impact of R&D is difficult. Management’s task is to create incentives and not a list of goals from the top, which nobody listens too, Mr Banerjee said.

HP has a board in which researchers can pitch big, aspirational ideas. The board is composed of 1/3 lab directors, 1/3 technologists from across HP, and 1/3 business unit people. For an idea to get approved, the different groups have to align.

#4 Measuring impact with the $100 Test

Measuring impact of R&D doesn’t work if you try catalog every little item that got transferred to business units. Why? Too many little transfers get counted as successes. What to do? HP uses the $100 Test. Each CTO of a group is given $100. (I wonder if they actually get $100 for this game? ;) ) They are asked to allocate portions of the $100 to the technology transfers from R&D that had an impact.  Mr Banerjee’s examples was something that allows HP to solve digital printing problem would get $30, while some incremental that improves a laser jet printer would get $1.

Basic summary. Innovation depends walking the line between long-term and short-term objectives while giving line employees incentives to bring their passions to work.

(After free registration, a video and transcript of the interview can be found at the article McKinsey Quarterly.)