Tuesday, August 26, 2014

Innovation: faster horses or deeper needs?

In a bout of "physician heal thyself" we at OVO led an internal idea generation session yesterday for some of our internal compatriots who are developing new products and services.  It was a valuable and highly productive session, because our counterparts committed to doing the pre-work we asked.  Further, they invested their trust in us about the approach and methods to generate better ideas.  We all left thinking it was a valuable session, and they have some great new product ideas to pursue.

Now that I've patted myself (and Dean, and Dom) on the back, we can turn to a brief sideline discussion that I found insightful and interesting.  We were discussing what new features or outcomes the potential customer desired.  One senior executive argued that it's impossible to know, that like Steve Jobs we should tell the customer what they need, since they can't possibly imagine it.  He quoted the old Henry Ford saying about faster horses.  Another executive took the opposite view.  He argued that we should be meeting with customers to understand the challenges and faults with existing solutions and working to project future needs from current frustrations.  And in this divide we see one of the great innovation philosophical debates.  That is, is innovation derivative or emergent?

The "whole" cloth

On one hand you have the Jobsians, or perhaps the Fordians, who had the foresight (or simple luck) to create products that consumers may not have imagined that they needed.  These and other innovators argue that talking to customers about their wants and needs is fruitless because the only answers you'll receive are either very small tweaks to existing solutions (the notorious "faster horse") or impossibly large or vague requests that can't be fulfilled commercially (where's my jet backpack).  The argument posits that most consumers can't create new solutions from the thin air, can't imagine what they can't see, can't create features and attributes of new products from the whole cloth.  To a great extent, the people who hold these views are correct.  The vast majority of people are "anchored" in what they can see, what they experience, and for the most part find it difficult to imagine any product or service that doesn't conform to current expectations of a product or solution.

What the Fordians leave out is that with a few simple questions or a little bit of directional discussion, many consumers can provide better insight into their needs.  Let's use Ford as the example.  When asked what new transportation the average consumer might need, most would probably turn to the horse and buggy. They might seek a "faster" horse, or a larger, more comfortable buggy, or a horse that ate less but delivered the same transportation.  But anyone asking poorly defined questions like these shouldn't be in market research.  The vast majority of people had horses, and were very familiar with wagons and buggies.  Also, most were familiar with the idea of motors - electric and fuel based - which had been in existence since the 1870s.  Asking a leading question - could you imagine using a buggy that was powered by a motor rather than a horse - would have elicited a complete different and insightful set of answers.  Good innovation is often found at the intersection of several technologies or solutions that haven't been merged.  Could we take a wagon, remove the horse and add a new motive power?  Would that be valuable?  What are the benefits and/or downsides to doing so?

The average person asked a poorly conceived question about product aspiration will never provide good insight.  In this Ford and Jobs are correct. But can you actually argue that people weren't aware of the issues managing music and their players?  After all, music sharing and music management systems existed.  Jobs imagined a way to combine them, but in many ways he wasn't the first, just the one who considered it holistically and commercialized it successfully.

The researchers

On the other hand there are plenty of folks in the innovation community who have given up on being a Ford or a Jobs, and who insist on deep customer interaction, to learn about unmet needs and use that insight to drive innovative ideas.  If the former group can be defined as emergent, creating ideas that they then impose on the consumer, this latter group can be labeled as inquisitive, relying heavily on discovering needs to the detriment of creating leading products that consumers can't define.  The question becomes - how much should we trust our own (instincts, technologies, judgment) and how much should we discover or validate with prospects and consumers?

The problem with true market research is that far too many firms take too cramped an approach to discovering "customers" and "needs".  They inevitably rely on consumers who already use their products and are reasonably satisfied, because those consumers are easy to talk to and non-confrontational.  They are also the people who have the least interest in something radically new and different, because it will require them to change.  Talking to happy, well-adjusted consumers who are familiar with your products is OK, but don't expect them to introduce a lot of new concepts or features because they are already invested in your solution.  To discover interesting new needs, you must talk to the disaffected customers or to prospects who don't want or need your existing products or solutions.  And this target audience is not comfortable for many market research enthusiasts. They are hard to recruit and often say things that conflict with what is known internally or believed to be true.  In fact the people you may need to talk to most may be the people you strive to talk to the least.

The middle ground

There's nothing wrong with trusting in your gut, leading with your ideas as long as you validate the needs and expectations.  There's nothing wrong with deep investigation and interviews with customers, as long as you ask the right questions of the right people.  The choices you make should be based on the capability and vision of the people within your organization, and the breadth and depth of the people you can interact with outside your organization, and your ability to sift and analyze the feedback and insights of both interactions.  Trusting market research alone may leave you with a very cramped response based on existing products.  Trusting in your own vision may leave you with a compelling product no one wants or needs.  As with many issues where there is a spectrum of responses, the reality is that a middle ground approach is best for creating new products.  As Reagan was fond of saying, trust but verify.  Create a solution that you believe in, but verify the need and the potential uptake. It's typically the case that internally driven solutions look different than solutions created with exclusively external content.  It's probably in the mix of this insight and feedback that good innovation, that can be developed and will be accepted by the consumer, is discovered.

Let's face it, few of us have the insight or the intestinal fortitude to bet a company on internal gut feel or insight alone.  Pay homage to Jobs but don't mimic him.  Likewise, understand that there are people within your company who have good insights and ideas that can be validated.  Research is important, but only if you are talking to the right people and asking the right questions.  Good innovators will discover the best answers between their gut feelings and insights and the needs they discover from customers.
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posted by Jeffrey Phillips at 10:30 AM


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