“Customers don’t know what they want until we show them.”
Type “innovation success rates” into your browser, and shield your eyes. While you’ll see many different statistics, there’s one thing everyone can agree on: too many innovations fail.
Clearly, innovation has the attention – and investment – of corporations trying to be more Intrapreneurial. So why do so many ideas generate zero excitement from customers, and frustration from executives trying to foster innovative cultures?
It’s not from lack of trying. Around the world, we see organizations both large and small working hard to re-invent themselves using LEAN strategies and other fantastic principles. One problem may be that companies are thinking too narrowly about innovation (see http://theaccidentalmarketer.com/blog/are-you-missing-80-of-your-innovation-opportunities/). But we also observe organizations making 3 critical innovation mistakes that undermine their success rates.
How to Reverse Engineer the Mind of Steve Jobs
As an innovator, Steve Jobs knew what type of market research was useful – and what types of inquiries could lead a company down a rabbit hole (see the quote at the top of this article).
But it’s an error to assume that what Jobs accomplished was the domain of rare genius and thus non-duplicable. Upon study, you’ll see that his “process” addressed 3 common innovation traps. By illuminating them – and showing how to avoid them — we hope you’ll see a path to improving your company’s innovation success rate.
Trap #1: Lack of Corporate Agreement on Which Trends Will Impact Its Markets
Trends are economic, social, political and technical factors outside of a company’s control that impact their customers and markets. They are the fuel of innovation.
Many think it’s hard to keep up with the sheer number of trends impacting their markets. We disagree. The amount of published information and websites – most of it freely-available – make keeping up with trends easier than ever if an organization sets their mind to it.
The harder part: agreeing as an organization which trends are most likely to impact the company and its markets. We recently worked with a famously innovative consumer products company that missed a huge opportunity — not because they missed a trend, but because they couldn’t agree that the trend was meaningful in their markets. This happens all the time.
Steve Jobs’ autocratic ways allowed Apple to avoid this mistake – if Steve believed it, it must be true! But it’s a cop-out to believe that organizations, armed with the right discipline and tools, can’t forge agreement on which trends matter in their industry. Cross-functional/cross-executive input can add a “wisdom of crowds” element to the trend-prediction process that can increase a company’s ability to predict the future.
Helpful Hints: Convene a small group of cross functional leaders together quarterly or semi-annually to evaluate potential trends. Rate each trend based on the impact the trend may have on the business (i.e., High, Med or Low) and the probability that the trend will occur (i.e., High, Med, Low). Through this analysis, you and your team can identify trends with the greatest impact that are likely to occur. This creates agreement, commitment – and the confidence that you are addressing the trends that matter to your markets!
Trap #2: Not Translating Trends into Customer Needs
Identifying trends is a necessary, but not sufficient, innovation practice. Anticipating how those trends are going to affect customer needs is the crucial next step.
This is easier than it sounds. Customer needs are more stable than most expect. Trends impact how those needs are fulfilled, opening the door to innovative ideas.
Certain consumer segments are always going to prioritize efficiency, speed, status, cost-savings or convenience. Specific business segments are looking to succeed through operational excellence, customer-intimacy or product service innovation.
Unlike others (see, for example, the history of Zune), Steve Jobs didn’t just run-off and make an iPod device that capitalized on the digitization trend. He knew the design had to translate the trend into key consumer needs mentioned above, such as fit-in-your-pocket device (“efficiency”), stylish looks (“status”) and an iTunes mechanism for filling up a 10,000-song library (“ease of use”).
Helpful Hints: If you are stuck on the implications that a trend may have on your customers, you may want to ask a few “thought leading” type customers directly “how might this trend impact you (and your operation) over the next 3 years.” Your best innovations will solve problems customers don’t even know they have yet – but will encounter soon enough. This practice will provide a Jobs-like, anticipation-of-customer-need- like quality to your innovation efforts!
Trap #3: Moving Too Slowly by Trying to “Eat the Elephant”
Most big organizations take way too long to get innovative offerings to market. In long sales cycle b-to-b industries, this is due to the length of time required to get market feedback on any new products.
These businesses think they need something close to a full turn of their sales cycle to know if customers will want their innovative offerings. Unfortunately, this leaves them vulnerable to nimbler competitors offering new technologies that connect to incumbent’s machines and optimize them.
The established companies in the industry are thinking about offering these same types of technologies, but are paralyzed because they think it will take many months or even years to get customer feedback. By setting up qualitative, directional metrics that measure the change in customer attitudes and intent to purchase immediately after a customer is exposed to a company’s innovations, incumbents can get vital feedback to determine if they should “pivot or persevere” on their innovation path.
Due to the fast-moving nature of Apple’s consumer-oriented business, this issue of a long sales cycle wasn’t a problem for Steve Jobs. However, to this day Apple tempers any analysis-paralysis tendencies with a release discipline that gets new products to market fast – as of this writing, iPhone 7S is due for a mid-September 2017 release.
Helpful Hints: If your company tends to move too slowly with its innovations, institute a mindset of experimenting (“piloting”) smaller-scale innovations with a plan to measure customer reaction quickly via qualitative metrics. Creating a roadmap to your full-blown innovation with several “horizons” (short-mid-long term) of releases will add the element of speed to your innovation processes that keeps those pesky new competitors from seeing an opportunity to poach your customers!
A Sure-Fire Way to Make Your Innovations Succeed
Innovations that succeed are typically the ones that address important, emerging trends, offer solutions to customer’s emerging needs, and get to market in a timely manner.
If your organization develops these habits as organizational disciplines – we like your odds of raising innovation success rates.