Your Innovation Pipeline Is What You Feed It
There was once a time, in the early part of the Twentieth Century, when companies could develop a technology, make a product out of it, and then go sell it. It didn’t matter much what their customers thought of it, as customers just didn’t have that many choices to choose from. So long as it mostly met a need, it got bought. As Henry Ford famously said, “you can have it in any color you want, so long as it is black.” And so it was that the marketplace was characterized by a few undifferentiated products that all more or less worked the same. The world was awash in a sea of black cars. The balance of power lay squarely with the producers. It was an era of indifference.
But then things changed. After World War II, competition, especially global competition, entered markets, and with it, many more choices. Suddenly, the balance of power began to shift toward the customer, and what customers thought began to matter to producers. Companies began to listen, and at least somewhat care, if for no other reason than their own survival. Those that didn’t listen didn’t survive. It was at this point that the market research industry came into its own. As time went on, companies became increasingly “customer centric”. By the time the 1980s rolled around, the concept of being customer centric was firmly entrenched. The mantra of the day was to listen to the “Voice of the Customer”. And as with all such things, an entire consulting industry sprang up to capture the VOC and promote its awareness. The focus group was in vogue.
This era — from the 1950s to the 1990s — was an era of listening. Unfortunately, it was not an era of thinking… of thinking deeply about the human psychology and motivations involved. It was what I refer to as “the golden age of gullibility”. As we wrapped up the Twentieth Century, and companies continued to rack up market failure after market failure, despite their listening, the evidence was mounting that something was still not right. Fortunately, a new era lay around the corner.
First off, a new wave of thinkers came along and demonstrated — via Outcome–Driven Innovation — that for existing product categories, instead of thinking in terms of demographics, we instead needed to think and talk in terms of jobs, outcomes, and constraints, allowing us to segment markets more effectively according to desired outcomes, which derive primarily from motivations and needs (functional and emotional). This often ended up being quite different from what traditional Voice of the Customer inputs were telling us. All of a sudden we realized that the customer’s voice was not always that reliable. Second, people like Steve Jobs came along and made it clear that, at least for new product categories, there was no basis for an explicit Voice of the Customer. We had to look beyond what customers were saying and doing, as those were rooted in the context of what they already knew. Instead, we had to place our focus on what jobs and outcomes were ultimately desired, as well as the motivations behind those, together with the experiences required to best deliver those outcomes. Combining these insights with emerging market and technology trends, we could then ourselves define what “might be”… something entirely new and different. This is a process known as Discovery–Driven Innovation. As a result, the world got iPods, iTunes, and iPads. This ushered in the era we are now in… an era of looking, listening, feeling, smelling, and tasting — and, most importantly, of thinking deeply about the outcomes people need and the underlying human motivations behind them (the essence of Design Thinking). I call it the “age of considered motivation”.
This all being the case, for at least the past ten years now the tools have existed — together with an understanding of how to use them — to feed an innovation pipeline with high caliber inputs. And yet, the sad fact is that most companies have never availed themselves to this. They continue to feed their innovation pipelines “junk food”… stuff that makes the outcomes flabby and ineffective. In fact, just as often as not, these inputs amount to random guesses.
I am not the first person to say this, and I probably will not be the last, but it doesn’t have to be this way. There are sound discovery methods for getting at the knowledge and insights a company needs to feed its innovation pipeline “health food”… stuff that will make its outcomes fit and effective. Part of the problem is that most MBA programs do not teach these discovery methods, because they do not know the methods. As a result, managers come out of MBA programs no better off than when they went in, in terms of having an ability to discern the right inputs for an innovation pipeline. This means they end up making the wrong investment decisions, putting their money in places where the market is already overserved, and missing many key opportunities in areas where the market is underserved. This is almost “anti–strategic”… their innovation portfolios and product roadmaps are full of things that simply do not matter, or that do more harm than good! Subsequently, their results are less than impressive, and their businesses suffer, falling well behind the market and the competitors who do get this.
So, the message is this… what are you feeding your innovation pipeline… “junk food” or “health food”? Are you using the right discovery tools and methods to uncover the insights you need to make “health food”? Make sure you are. Your customers will thank you. Especially if you happened to ignore their voice.