In previous posts, we have explored the first two gaps of the Innovation Process (Action Gap & Idea Gap). Today, we will continue our journey through the stoney valley of corporate innovation by focusing on the NEED Gap.
WHY THIS MATTERS…
Over the past few years we have worked with several companies who have decided to take action and have generated a lot of idea, but somehow failed in the process of converting a “great” new idea into a “great solution” for the customer. Moreover, we have observed that key decision makers, channel partners, and employees are not always taken into consideration, which decreases the financial attractiveness for the intermediaries who are in charge of distributing the product and generating revenues and profits. What’s basically missing to some extent is the full understanding of the NEEDS of all these key stakeholders.
The Goal of this stage of the innovation process is to IDENTIFY the needs of all relevant stakeholders who are related to the successful commercialization of the product.
Our research in the area of innovation has lead us to identify some very simple, useful and effective tools that can guide an innovation managers thinking about identifying the right user needs.
1. START WITH AN UNDERSTANDING OF THE THE CUSTOMER ACTIVITY CHAIN AND IDENTIFY KEY STAKEHOLDERS
We have first come across this concept in the work of Ritha Gunther McGrath and Ian MacMillan Market Busters – 40 Strategic Mooves that drive Business Growth. In chapter 2 the authors describe the move “Transform you customer’s experience” based on a thorough mapping and analysis of the complete customer activity chain and creative and strategic thinking applied to transform the experience.
In the process of applying this methodology, we have identified that the mapping process of one specific customer segments experience you can identify also all the key stakeholders who are involved in the process. Once you understand who the key stakeholders are, you can analyze their needs and how they seek to satisfy them.
This basic understanding of who the key players are and what each of them is aiming for will give you a clear overview of the system dynamics. This systems view will help you to identify the most attractive and profitable customer segments (b2b vs. b2c) and potential key partners who can complement your offering.
Most companies we have worked with, however, are do not possess a systemic view of the market… their focus is too narrow and biased by past experiences… they lack the mental flexibility to shift their focus due to the inertia of every-day business practice and old paradigms.
2. IDENTIFY KEY JOBS TO BE DONE & KEY OUTCOMES
In “The Innovator’s Dilema” and “The Innovators Solution” Harvard Business School Professor Clayton Christensen highlighted that “customers don’t buy products… they hire products to get a specific job done” (video). Since then, Christensen’s fellows Anthony Ulwick, Scott Anthony, and Peter Skarzynski have further developed the concept and a range of tools and frameworks.
Anthony Ulwick’s team at Strategyn has developed the most complete set of tools and processes in this area. In his work “What customers want”, Ulwick presents a very interesting approach to systematizing the new product development process. What we at Paradygnamics and The Innovation Center of the Tec de Monterrey liked the most of this work is that Ulwick puts the new product development process into the context of the organizations overall strategy (e.g. First define your strategic goal, and then design your research approach) and complete the innovation process with clear communication and positioning guidelines for communication, which will increase the probability of your product’s success in the market place.
Ulwick’s Outcome-Driven-Innovation (google it!) approach has been very useful for our work with customers from all industries, sizes and financial capabilities as it is a like special lens which enables you to see beyond functional attributes of the product or technology. The process helps you identify the core needs that the customer really wants to satisfy and inspires your product development team to expand their focus and look at new solutions to old problems. This is made possible due to the systematic way of describing, analyzing and understanding your customers functional, emotional and social needs.
In our experience, companies which neglect the insight into the deep, underlying needs and values of their customers and other stakeholders, come up with only half-baked solutions and therefore fail in the process of diffusion and adoption of their technology due to barriers buit by external channel members, other stakeholders, but most often by their faulty designed business processes…
WHAT DOES THIS ALL MEAN…
Companies which have a clear understanding of the fundamental underserved, over-served and appropriately served needs of the key stakeholders in their industry will expand their innovation potential and, most likely, identify the low-hanging fruits that can be reaped with minimum ressources. Understanding the needs can be achieved with a set of concrete methodologies, practice and patience.
Understanding needs, however, is not enough.. the next challenge that companies face is to translate the intangible needs into tangible products and solutions. We will explore this problem in our next post…