Customer's Role in Breakthrough Innovation?

There has been quite a lot of discussion recently about a post by Jens Martin Skibsted and Rasmus Bech Hansen, titled “User-Led Innovation Can’t Create Breakthroughs; Just Ask Apple and Ikea”. Their major claim is: “Great brands lead users, not the other way around.” As expected, this lead to controversial discussions in terms of customer’s role in the process for innovation. The response reminded me of the reaction to one of Roberto Verganti’s polarizing posts.

It’s interesting to see that those discussions mostly result in ‘either-or’ positions – assuming that customer-centered and vision-centered approaches exclude each other. As innovation is about managing tension, I think a ‘both-and’ approach tends to be more promising.

Innovation aims at providing value to customers. Customers eventually decide whether or not an innovative offering is going to be adopted and to become successful. Therefore, the customer needs to be put in the centre of innovation considerations. Steve Denning writes in a response to the article above:

“One caveat that should be added: one needs to be careful not to interpret this to mean that designers don’t need to pay attention to users. On the contrary. They need to have a deep understanding of users, an understanding that goes beyond what the users themselves can say, because it combines an understanding of the hopes, dreams, irritations and fears of the users with what the designers can contribute to promote those hopes and dreams or avert those irritations and fears.”

Denning indicates that there is a shift in customer involvement from asking customers what they want to a broader understanding of their needs and drivers. That’s pretty much in accordance with the message of my previous post: targeting at customer involvement on the level of needs, rather than on the level of solutions, in order to leave existing regimes. Allan Cooper supports this in his response:

“Ikea and Apple may not ask their users what they want, but they sure work diligently to understand what their users want. There is a world of difference between the two.”

This issue was also covered in a talk by Steve Portigal on the LIFT conference 2011.  He explained how concentrating on understanding people’s behavior is so much broader than asking people what needs they have and what they would like:

“People, says Portigal, are not good at talking about solutions, but we can understand a great deal about needs by observing people. By leaping away from the specific, we can get at the principles that drive the specific. So the question that drives the research is not the solution but the problem we are trying to solve. Contemporary user-centred design, says Portigal, implies a willingness to shift what we think the problem is, a willingness to shift what we think the solution is, and a willingness to be comfortable with ambiguity.”

Moreover, I’d like to reference another post from Jeffrey Rosenberg. He weighs in counter positions to the points being mentioned by Skibsted and Hansen, why it may be harmful to listen to users. Let’s have a look at two of them:

“Point: User focus makes companies miss out on disruptive innovations. If a company bases their decisions on user studies, they will conclude that most radically new innovations are not rational to pursue.

Counterpoint: Correct. If you conduct user research and you do what users say you will probably suffer from incrementalism. But that’s not how you use research. You use research to gain insights that you then synthesize with other key inputs, such as competitive intelligence, business strategies, and brand strategies to generate ideas and concepts that are breakthrough, transformative, innovative (Although if you structure and moderate the research properly you will get some of that from users as well). User insights should be used as an input, not as the answer.

Point: User-led design leads to sameness. Even if user insights were useful, it isn’t a competitive advantage.

Counterpoint: Competitive advantage doesn’t come from insights that no one else has. It comes from unique products, experiences, services, or distribution models that are partially informed by user insights. Sameness is typically a result of focusing disproportionately on what the competition is doing. It’s a brand’s unique take on opportunities that leads to differentiation. And user insights can help uncover those opportunities.”

I think Rosenberg is dead-on: the capability to transform customer insights into novel and differentiating offerings distinguishes a great from an average innovator. It’s a unique vision, linking input to output, that makes the difference.

From my perspective, there is a second shift that tends to be of great importance when breakthrough innovation is being considered: the innovation addressees shift from majorities to minorities, i.e. from the mass market to the edges. Quite often, the term “customer-centered” is linked to existing market majorities. However, breakthrough innovation usually addresses needs of (still) unserved minorities. These can be innovators and early adopters in case of new market creation but also unsatisfied consumers in existing markets. Dissatisfaction of minorities is a strong driver of innovation. In order to transform the core, edges need to be taken into account while identifying an innovative and future-oriented vision.

Takeaway:

Customer-orientation and vision need to complement each other in order to stimulate breakthrough innovation. A visionary approach is essential to secure long-term success as well as to provide truly differentiating offerings to the market. However, this vision cannot be defined in a vacuum without customer insights. These insights are gained through shifts in focus from

• solutions to needs and broad understanding of customer’s context, and
• market majorities to minorities, i.e. unserved consumers with dedicated needs.

This leads me to the following conclusion: Innovation based on needs of edge customers tends to result in higher likelihood of breakthroughs than involving average customers in solution development. When it comes to breakthrough innovation, a customer-centered vision seems to be indicated.

Looking forward to your thoughts.

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Dr. Ralph-Christian Ohr has extensive experience in product/innovation management for international technology-based companies. His particular interest is targeted at the intersection of organizational and human innovation capabilities. You can follow him on Twitter @Ralph_Ohr.