The Key Ingredient to visionary Open Innovation

14 08 2011

“Go forth and Innovate” – whilst I have yet to hear those immortal words actually uttered by any senior executive (at least not without tongue-in-cheek) – it is the virtual call to arms that many Innovation execs receive nowadays.

The resulting rush to show action prior to thinking that action through is probably one of the greatest contributors to corporate malaise around the expectations for a fledgling innovation program.

Nowhere is this more obvious than in corporate innovation programs where, in a bid to emulate their own version of a P&G-style “Connect & Develop* program, Innovation exes rush in to embrace ideas from the outside without stopping to think about whether or not the audience they’re asking is actually capable of the answers they’re looking for…

For example – let’s look at what’s probably the most obvious place for a company to start  – existing customers.  Even better – let’s choose our long term customers with which we already have good relationships – surely that will lead to some synergistic big ideas that will result in big sales down the line…it sounds like a good idea, no? And it continues to sound like a good idea until you realize that, whilst prolific with ideas for your company, the vast majority of ideas you get from your customers seem to always end up being iterations on your existing product lines… new colors, new flavors, new add-ons – but primarily minor changes – why aren’t they delivering on those big ideas I was looking for?….

The Answer: Because they lack one vital Innovation ingredient… Unhappiness.

In order to be able to innovate – in order to even want to innovate – you have to, be default, be in a motivated state to look at/consider new options and solutions – you have to be unhappy with the current status quo.

After all, your customers are already buying from you – you’ve already satisfied the “job they’re trying to get done” (to borrow a Clayton Christensen-ism) – so why would they even consider any radical alternatives?

And the bigger the ideas you’re looking for – the higher up the “unhappiness-scale” you’ve got to go up to stand a chance of finding it.

So let’s go up that unhappiness scale – next up are groups known as “lead users”. Lead users (not to be confused with Lead/Early adopters) are people who are only buying your product because it’s the closest darn thing to what they really wished you’d made.

They use and adapt and do all sorts of crazy things to your product in order to satisfy their real need.  Get them to open up those real needs to you, and you unlock the potential to find the next generations of your current product lines as you uncover tangential markets, brand extensions, and new applications of existing/modified product sets that satisfy new niches and customer segments.

Want an example of how powerful this can be?  I had one former client of mine go out to all his customer facing staff to ask for “all the crazy, wacky, and abusive things that our clients are using our products for, that we never envisioned them being used for”.  After searching far and wide, they found a small company in New England that was using a product they made to waterproof new housing, to waterproof boats instead. Why? Because it was a quicker, easier, and simpler method than the traditional way they’d done it before.  It took my client all of a few months to repackage the existing product to target the boating community and create an entirely new market for themselves that added an additional $7 Million in its debut year – not too bad, eh?

What if we want to go for the really big ideas? Well then we have to go to the most unhappy person of all – the people who aren’t buying your product at all because the product you make don’t even come close to what they are looking for. Listen to these people and you might just find the future of your company.

These last two groups represent the “fringe” of the populations available to you – the edges of where your company is, and where it could be. Engage those and bring them in to reinvent your core business, and you’ll find the way to ensure your company lasts the next 5 years.

In the meantime, keep in mind this mantra I give to my clients:

Customers give you Iterations…

Lead users give you Generations…

Non-customers give you the Future…

As always, I welcome your thoughts and comments below!

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10 responses

15 08 2011
James Hughes (@RedCuber)

Hi Boris – good post. I like all your points. How do you motivate your customers / future customers to care enough to give you their ideas?

17 08 2011
Boris Pluskowski

Hi James – The current methodology for engagement varies wildly by brand, by company, industry, and also by type of person you’re trying to reach.

In each case you have to answer the timeless question that all people external to your company ask themselves before interacting with your company:

“What’s In It For Me?”

For some, notably big consumer brands, engaging current consumers is not much of a problem – take the Starbucks My Ideas site that taps into thousands if not millions of highly caffeinated and motivated consumers who want to submit their ideas for how Starbucks should be improving their services to better suit a brand that’s become an active part of their lives. Of course, if you look at the ideas themselves, they are almost entirely incremental ideas/opinions/or cries to bring back services, products, and quirks that Starbucks no longer offers or is discontinuing. Whilst I would consider the program a failure in terms of really driving any significant change/benefit to Starbucks, it is a success on the engagement front. Of course, there are few companies who can rally that kind of broad support for their program with minimal incentives.

For many companies though, engaging their customers requires some level of intrinsic reward and recognition program. The further out you go up the “unhappiness scale” (and the further away from your core customer you go) – you typically need to utilize more extrinsic incentives for participation.

For example, take companies like my current clients Houghton-Mifflin-Harcourt with their Global Idea Challenge, or Cisco’s I-Prize – both of whom incorporate large scale cash incentives to bring in and engage people and teams who wouldn’t normally engage with the company, and to ask for them to engage in a deeper fashion (by submitting full-on business cases, and value creating ideas for example).

Does that answer your question?

18 08 2011
Toby

I am currently working on an innovation project where I have been partnered up with a market researcher. At every turn, her impulse is to survey customers – ask the customers what they want, then we’ll build that. If only it were that simple! Aside from your “happy customer” explanation, which I really like, I think there is also a problem when you respond to a majority view, or assume that all customers are created equally. When polled, a majority of your customers may say that they like one thing or another. But the really creative, forward-thinking people may be a minority among your customers.

There’s a famous quote from Henry Ford: “If I’d asked people what they wanted, they would have asked for a faster horse”.

I also like to remind people of the Starbucks example. You never would have gotten customers to tell you, “we want to pay four dollars for a cup of coffee”.

18 08 2011
Boris Pluskowski

Excellent points! And I love the Starbucks example :)

With regards to not being able to please everyone – just think of how many successful businesses started up by selecting a niche/small segment of the consumers and worked to satisfy their needs specifically – only to then find out that niche represented the real opportunity in the market. In many ways – by trying to serve everybody in some way, you end up serving nobody well.

Thanks for the comment!

24 08 2011
Jason

Interesting topic but really makes sense. I think Apple does a great job of utilizing these points in their business plans.

19 03 2012
Mike Colucci

Boris, Nice post. Keep them coming. Your point on the customer being “unhappy” is a good one. I use the term “state of dissatisfaction.” We always want to tend toward “satisfaction” and in order to do that, often we (and our customers) “settle” for what is rather than what could be.

We can train ourselves to choose dissatisfaction in the natural process of innovation and therefore increase the likelihood of presenting something new.

27 06 2012
Christian Schumacher

good points. It is so much consensus view nowadays to cooperate with existing customers as key success factors for innovation input. This is OK for many businesses, no doubt. It depends what is the business and what is the target. But also true, in this way people will only provide input for marginal optimisation of current products but not real step changes. I believe you need to interact with the real creative thinkers, completely out of the box, and people who are really outside the framework of a daily business.

21 02 2013
Master of Methods

Great post and comments. As always there are many ways leading to Rome. Every advocate of one way or other will be providing their success stories. A certain fact is that an innovation needs a customer, a market. So ignoring market needs and wants is not a good idea. Also an innovation needs creativity. Non-creative, obvious innovations cannot create a sustainable market advantage. A lot of information is contained in the current, existing products. If we determine their features, their functions, we can learn a lot about what the market needs and wants. As an example: mobile phones and smart phones have touch screens, on screen keyboards, voice recognition …
This tells us that the consumer or user values hazzle free, convenient operation of the device. No need to go to the user and ask him that.

26 09 2013
Jonas

Good post Boris. I personally think that the truth lies somewhere in the middle. Succesful innovators can do both – developing new business models like starbucks or nestle (no customers told them to sell coffee for 30 bucks per pound in a little capsule) AND cater the needs of the customers – in the nestle example the need for easy and quick coffee.

18 10 2013
The Key Ingredient to Visionary Open Innovation - Conspire: A @Mindjet Publication

[…] This post was first published on The Complete Innovator. View the original post here. […]

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