Monday, July 13, 2009

What we know too well

In countless innovation projects, we've queried the management team about the state of research. What we're interested in is what the firm "knows" about its customers, its market and its opportunities. Typically we are quickly reassured that the firm has a significant amount of research, and it will be made available. What we usually find is that most research is focused on very specific product or service markets or niches, and on very short term opportunities. Most firms lack overall strategic insight, and most are heavily, if not exclusively weighted to quantitative research.

Now, there's nothing wrong with quantitative research, especially from a customer satisfaction perspective. After all, most firms want to be able to quantify their results and measure how well a particular service offering meets the needs of customers and satisfies their expectations. The problem in most firms is that "research" becomes obsessed with quantifying results of existing products and services. Ask any research team how happy the left-handed, red-haired baseball fans in the southeast like their existing product line, and you'll get an answer to three significant digits. Ask most research teams what these folks want next, or would consider a compelling innovation, and there's rarely a good answer or insight.

That's because most quantitative research (and, therein, most research conducted in major corporations) is focused on the existing products and services, and existing customers or strong prospects. This means we are experts at knowing what our existing customers are happy with or how satisfied they are with what we already offer. As noted above, from a customer satisfaction standpoint, that's great. From an innovation point of view, it's really not relevant.

Granted, it's hard to ask questions about what new products and services people want - most people can't tell you that on the fly. Often a new product or service must be experienced before customers can tell whether or not it will be valuable. But some insight about unmet needs or undiscovered opportunities should be conducted. Far too often we are asked to create new products and services that will "disrupt" a market, but with little direction and no sense of what customers want or need. Where most corporate research is focused, we know all too well what we know (quantitative, satisfaction oriented data) and far too little about what is important from an innovation perspective (qualitative, aspirational, unmet needs).

Further, we are quick to apply quantitative methods, which are internal strengths, to new ideas. Can we justify the new ideas using existing survey and research tools? Well, we definitely have the methodologies, but we may be asking the right questions in the wrong ways. As noted above, most people can't dream up new products and services on the fly, and even when presented with a new concept many people may find it hard to understand, or reject it simply because it represents change. It is dangerous to test new ideas using many quantitative tools, simply due to the fact that a new idea, regardless of its worth, is often rejected. After all, as Henry Ford said, if I'd asked my customers what they wanted, they'd have said a 'faster horse'.

So, there are two traps when thinking about innovation and the role that research can play. First, we have a preponderance of narrowly focused research in most firms that tells us how satisfied existing customers are with existing products, but little to tell us what new products these customers want, or what would attract new customers. Second, our reliance on this existing strength often leads us to validate new ideas using tools and methods that we understand, but might not be the right "validation" methods for new ideas.

What we know too well is not enough when it comes to innovation, and what we know too well may actually trip us up when it comes to validating new ideas. New thinking is important when it comes to generating new ideas, and when it comes to validating them as well.
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posted by Jeffrey Phillips at 7:27 AM


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