When I get several requests in the same week on exactly the same topic, I know something is happening in the marketplace. This week was one such occasion.
A Pharma company wants a presentation on it; a CPG company asked me to give a half-day workshop about the topic; a conference requested a keynote speech about it; a major US business school wants a guest lecture covering the idea and a consumer goods company wants an article for their newsletter. What’s the topic? The new ways to innovate, that’s what.
With all this interest, and despite having written some popular posts in the past on best-practice innovation, such as “ How to innovate more creatively”, “How to get R&D as excited about consumer innovation as you are” and “Never succeed at innovation: 10 mistakes even great companies make”, I thought I would summarise the latest trends around how to innovate more successfully today. So here are some ideas to get you thinking about the changes you might want to bring to your own innovation processes.
So many organisations still have an innovation process that starts with R&D or operations. It’s time to reverse your innovation funnel and start with the customer. (>>Tweet this<<) What are their problems with current products and services; what do they dream of having? How are they compensating or compromising?
“If I had asked people what they wanted, they would have said faster horses” Henry Ford
“People don’t know what they want until you show it to them” Steve Jobs
However, as Henry Ford and Steve Jobs remind us, customers don’t usually know what they want. They are usually very clear about what they don’t like, but they also often know the solution they are looking for – even if they don’t express it as such. It is our job to interpret what they are saying into what they need. Therefore, identify the result they want but not how they want to achieve it, otherwise you will be looking for that “faster horse”!
2. Stage-gate innovation is essential for a successful business
Today’s world is fast paced and customers never stay satisfied for long. What surprises and delights today, is ordinary and normal, if not tomorrow, at best in a couple of weeks or months. That’s why it’s vital to work on new product and service developments even before you launch your latest offering.
Many companies today work with generation pipelines, with three, four or five stages of innovation preparation. This ensures that they are already working on the replacement of each product they launch, whether or not it’s a success.
3. Line extensions can only do so much
According to the McKinsey article “ Reinventing Innovation in CPG“, real growth comes from ground-breaking innovations, not simplistic renovations. However, line extensions do provide the time for organisations to prepare their true innovations, while responding to today’s customers incessant desire for novelty.
They are also easier to develop and launch, which means they are less dem anding on resources. Companies which are satisfied with only incremental innovations are unlikely to see significant growth in the long-term. For this reason successful br ands need to do both. (>>Tweet this<<)
4. Launch before you’re finished
Many tech companies use this approach, by involving customers as beta testers. In this way, they get their customers help – for free – to improve and mould the final offer. It also allows them to launch more quickly and gain the positive image associations of being first to market.
If you are concerned about confidentiality or competitive speed to respond, then work with customers through co-creation. (>>Tweet this<<) Involve them at every stage of the development process from ideation to launch preparation. If your management are concerned about the risks of sharing innovative ideas outside the company, involve employees instead, perhaps from other divisions so they are less biassed.
5. Review the category in which you’re playing
Are you sure that your customers see your br and in the same light as you do? Many times I have heard a customer correct an interviewer in a research project, when asked about br ands in a category. “That br and isn’t in that segment, category A” they say; “It’s not a competitor of X, but of Y and Z, the main br ands in category B”. Some examples include dried soups which today compete with sauce mixes, carbonated soft drinks with fruit juices and body gels with shampoos.
Another advantage of underst anding the category in which your customers place your br and is that this can provide you with new ideas for expansion.
Many confectionary br ands have moved into ice cream and desserts. They have understood that they are being seen as more of a “treat” than merely “just” a chocolate bar. When your customers choose between products from several different categories when deciding what to eat or buy, it is a clear indication that you are not (only) competing in the category you first thought you were. (>>Tweet this<<)
In conclusion, there are many reasons why innovations fail:
- A short-term mindset where success is dem anded in weeks or months rather than years.
- Top management instils a fear of failure, so no-one will defend ideas that are unpopular.
- The innovation process itself is biassed towards current knowledge and skills.
- A lack of deep customer underst anding.
These five ideas will help you to reinvent your innovation and also make it more customer-centric. After all isn’t that what all best practices should do today, involve the customer? If you have other – better? – ideas, then why not share them below?
This post includes concepts and images from Denyse’s book Winning Customer Centricity. You can buy it in Hardback, Paperback or EBook format in the members area, where you will also find downloadable templates and usually a discount code too.
The book is also available on Amazon, Barnes and Noble, iBook and in all good bookstores. If you prefer an Audiobook version, or even integrated with Kindle using Amazon’s new Whispersync service, you’ll have to be patient just a little longer – but it’s coming soon!