Tuesday, May 04, 2010

Innovation Failure Points: Inside-out innovation

In a continuing series of posts I am examining a number of consistent innovation failure points, under the thinking that learning from failure is much more instructive than learning from success, since often success is situational, while repeated failures can be instructive.  In the first two posts, we reviewed failing by starting poorly, and failing by neglecting to closely link innovation to strategy.  What I'm interested in is identifying the "weak links" in the innovation process and examining why innovation fails most consistently at these particular points.

Today we'll consider the weak link of what I like to call "inside out" innovation.  This is the presumption that we know what our customers need, and that happens to look a lot like our existing products or services.  Too many firms "innovate" with very little information or insight about the market, their customers, or customers' need or wants.  Rather than go out and understand what customers need and expect, they rely on anecdotal evidence and market research, and simply extend existing products and services.  This is a failure point of the first order, consistent with running blindly down a path that ends in a cliff.

Too often innovators assume they can ascertain the needs of the market without interacting with customers.    What's really striking is to ask product and service development teams how frequently they meet with customers to LISTEN to their challenges and needs, instead of simply presenting a new product. In the innovation teams where customer insights are used, the team relies on third party research and customer feedback, rather than detailed Voice of the Customer or Ethnography work to uncover unmet or unarticulated needs.   Or the team fails to use Needs-based tools like the ones Christensen documented and Strategyn popularized like “jobs to be done” methodologies.  Too often innovation teams start generating ideas without understanding the needs and opportunities in the marketplace.  Sooner or later an executive is going to want to know what problem is being solved, who has that problem, and whether or not they are willing to adopt your suggested innovation.  You’d better have the answers or your innovation won’t move forward.

For some reason we've lost, or perhaps never really had, the ability to interact with customers and prospects in a visceral and empathetic way.  Even when our product and services teams are informed that customers are angry, frustrated and unhappy with the products and services, we continue to use the same tools and techniques to derive and design new products, assuming the fault lies with the prospects and customers rather than with the fact that we haven't understood the needs.

What’s the learning?  Innovation is about creating something dramatically better or completely new.  If you aren’t interacting with customers to understand unarticulated needs or “jobs to be done” then your shiny new product may be interesting, but not valuable to your intended audience.  Don’t rely on your own intuition, and don’t rely on third party research.  Go find out for yourself, interact with customers in unscripted ways.  You may not like what you hear, but you'll learn far more.  Leave the pre-conceived notions at home and deploy qualitative tools like Voice of the Customer or Ethnography.  Watch your customer interact with their challenge or problem.  The most common response to this kind of research is astonishment in the executive suite.
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posted by Jeffrey Phillips at 5:42 AM


Anonymous Charlie Garland said...

I see both good and "less-good" in this perspective, Jeff. Let me start with what I'd consider a challenge here. Customers don't always know what they want. Even if they do know, they may not be able to articulate it. Sometimes they give false or misleading responses to questions, surveys, etc. Anyone who pursues a VOC strategy needs to do so with the proper perspective, and absolutely not put all their eggs in that basket.

The good part as I see it here is that you're definitely getting people to think/look outside the box as far as their own, insulated perspectives and biases (presumptions as I call them) that stifle imaginative thought of the possibilities.

I applaud your bringing this topic up. It's highly relevant, and rather timely given what I hear people buzzing about these days...

8:46 AM  
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8:04 AM  

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