[MUSIC] In our last segment, we walked through the entire four phases of the innovation process. In this segment, and the following three, we are going to zoom in on each one of those four phases. And going to a little more detail about what they are, how they work, and how we operate within them. Our first one, is the observation phase. In our process diagram it looks like this. We talked about how observation and ethnographic research are the main tools in this phase. We accomplished this by using three different activities. We ask questions, we watch people, and we engage them in meaningful, open ended conversation about their needs, their work, and the potential use of any product or service we might be imagining. Now, lots of people use this process. I'd like to share with you the story of one such company, Proctor & Gamble. Here is AG Lafley, the Chairman and CEO of Proctor and Gamble, he retired in 2010, but he was asked to come back to the helm of the company to continue driving it forward using some of these processes that we call observation. As you can see, he had a pretty good track record at the helm of the largest consumer product company in the world. How does AG Lafley use observation? He spends up to three or four months a year in the field traveling around the world talking with customers. Going shopping with them, sitting in their kitchens, watching them cook or clean. Now, proctor and Gambles products are for household use, as you know. If this was the chairman of Ford he would be driving with people, parking with them, going to the DMV, getting their cars repaired, etc.. AG Lafley visits with people all around the world. He frequently asks people questions about the products that they are using that are not Procter & Gamble products. And even back at corporate headquarters in Cincinnati, Lafley uses observation and listening as key management tools. But Procter & Gamble isn't the only company that's using these processes. As you can see from the logos on the screen, there are similar large companies, and small companies, from very different industries, all using the processes of observation to better understand the needs of their customers, and how they're using their products, or not using their products, as the case may be. This idea of observation was best said in a very old quote. I'll put it up onto the screen now. The task is not so much to see what no one else has seen but to think what no one else has thought about what everybody sees. This of course brings us to a question. How do we see? We all are products of our culture, our age, our generation, our gender, our socioeconomics, where we live, the language we speak. Oftentimes, we don't have a big awareness about the things we take for granted, or the ideas that we never challenge, we take them as articles of faith. The notion of understand the water were swimming in, is an important part of being able to observe in the field with objectivity, and compassion, and curiosity. There's an old joke about two fish swimming in the water. And they're passed by an older fish going in the other direction. The old fish says to the two young fish, so, boys, how's the water today? A few moments later, one of the young fish turns to the other one and says, what the hell is water? The idea of that story is that we often don't understand the way we see, so that when we are looking and observing we fill with our own biases. And so, we need to develop careful habits of mind to observe with the eyes of the beginner, of almost the child.
