 A
few years ago a furniture company flew me down to their headquarters to
talk to them about innovation, and to get my comments on a new product
that they'd developed for the professional services industry. This was
a company that had been honoured for years as one of America's most
innovative companies, so I wasn't sure how much I could help them. They
ushered me first into the R&D department where I met with some very
creative individuals who obviously knew a lot about their business, and
about product innovation. The department featured a giant furniture
'playroom', stocked with a variety of furniture components, where
creative minds could serendipitously experiment and build makeshift
prototypes on the fly. I was impressed.
Being a consultant, the first question I asked them was about their innovation process.
Specifically, I asked, how were customer needs, complaints and ideas
routed from the front-line customer contacts (the sales and marketing
people) to R&D. I got blank stares. New product ideas were
developed in the laboratory, it seems, and the only customer input was
from surveys and focus groups once the R&D people already had
something to show them.
An interesting discussion ensued. The gist of it was the company's
argument that customers, not being experts in furniture, don't know
what they want until they're shown something. If you were to ask them
what they want, they'd just respond "what can you offer me?" My
response was two-fold:
First, I said, you shouldn't be asking people what furniture they want, because it's not a piece of furniture that they're looking for, necessarily, it's the attributes and benefits that the furniture offers that people want: Comfort, orthopedic support, mobility, prestige, 'workability'.
I described a company I had recently read about that had abolished
chairs. All the work surfaces had been raised to a comfortable
work-level while standing, and each employee had been given a
lightweight, personal 'memory cushion' to stand on that clipped to
their belt, and a pair of personal orthopedically-designed shoes
designed to make standing for long periods comfortable. In this
company, people were constantly on the move and an enormous amount of
time was spent booking meeting rooms. Now, the entire office could be
configured as ad hoc meeting areas, chairs (with their high attendant
cost and floor-space needs) could be eliminated, and mobility was
optimized. People even found that they were more productive standing up
and constantly moving around. This was a company that understood
furniture was a means to an end, and the end for them was mobility and
flexibility, so they 'invented' tools (furniture, cushions and shoes)
that had those attributes.
Secondly, I added, you need to use an iterative process to elicit what people need, want and would use, a process Imperato and Harari (in their book Jumping the Curve)
call "Thinking the Customer Ahead". This process entails a combination
of visioning, asking a lot of 'what if' questions, and generally
helping customers imagine the future state of their own organizations
and needs, and how they would react if something new were suddenly
available. This is an inherently collaborative
process, as much as it is an innovative one. Just as asking people
'what would you like to see on the company intranet?' is likely to
produce unimaginative (or no) answers, so would asking customers what
furniture they need. But if you helped them to envision what the future
of their business would look like, and then worked from that vision to
ask an iterative set of 'what if' questions to elicit the kinds of
furniture they could imagine using effectively in that future
environment, and then collaboratively work with them to 'design' it, then you'd be getting somewhere.
As it turned out, the new product they had asked me to evaluate was
designed to solve a problem in the professional services industry that
had been widely talked about for a generation. Now they had an answer, but it was an answer to yesterday's
problem, for which effective work-arounds had been found and were still
evolving. And they had designed a product that had several critical
inconvenience factors that were show-stoppers, and which they could
have known about by spending more time talking to customers much
earlier in the process.
One of my creative suggestions to them, as a customer, was that if they
really want to sell their top-of-the-line ergonomic chairs to CEOs,
they should give them away free to hotels and conference centres for
their meeting rooms, where CEOs hang out and where the chairs are
notoriously uncomfortable. The proviso would be that the name of the
chair be conspicuously emblazoned on each chair. I don't think they
ever took me up on the idea. I still think it would work, and pay for
itself in no time.
Specialization has created intellectual and imaginative silos in organizations, and a recent Wharton study written up in S+B Magazine
has found, as I did on that trip, that these silos are a huge obstacle
to innovation: "The most effective product development and
commercialization processes encourage dynamic communication and idea
sharing among engineers, marketers, and customers...Failure to
incorporate the customer’s perspective often seriously limits the
potential financial and competitive value of corporate
innovation...Often, engineers are tucked away so far within a company
that they don’t see firsthand what customers really need."
Other key findings of the study:
- over-concentration on technology and under-emphasis of the emotional appeal of products leads to market failure
- better products result when employees are themselves customers of the product
- 'anthropological research' -- visiting customers to see how
they actually use (and mis-use) products can provide huge insights on
need and innovation opportunities
- when entering new markets, having local partners 'on the
ground' can help tweak products to meet needs that are unique to that
new market
- using cross-functional teams and having the R&D people 'get out more' can help reduce 'customer blindness'
- spreading R&D efforts around the world can help global
companies enhance their 'environmental scan' and tap into ideas and
adaptations that may not be apparent at head office
- surveys that gather data on customer behaviour are insufficient -- it's more important to know why
customers do what they do, to determine their true wants and needs, and
this usually requires face-to-face contact and collaborative effort to
determine
- it's important to understand customers' aversion to change, and annoyance with having too many choices, when developing products
- key qualities needed of the facilitators of dialogue between R&D, sales and customers: humility and curiosity
This study focused mainly on new product innovation, but the same need
for collaboration with all the departments of the company, and with
customers as well, applies equally to other types of business
innovation. I like the Doblin Group's Ten Types of Innovation, an excellent way of parsing all the innovation opportunities open to a company:
- Business model: How you make money (e.g. Dell's pay-in-advance for a custom-made PC model).
- Networks and alliances:
How you join forces with other companies for mutual benefit (e.g. Sara
Lee sticking strictly to branding and outsourcing all manufacturing)
- Enabling process:
How you support the company's core processes and workers (e.g.
Starbucks' premium wage and benefits packages to attract superior staff)
- Core processes: How you create and add value to your offerings (e.g. Wal-Mart's reinvention of retailing as shelf-space leasing)
- Product performance:
How you design your core offerings (e.g. the Mercedes Smart Car's
unique and imaginative attributes -- pictured above -- pick up the new
Feb/05 Fast Company for a fascinating discussion of why you won't see it in the US)
- Product system: How you link and/or provide a platform for multiple products (e.g. the Microsoft integrated productivity suite)
- Service:
How you provide value to customers and consumers beyond and around your
products (e.g. Singapore Airlines' thoughtful and pampering extras)
- Delivery Channel: How you get your offerings to market (e.g. Martha Stewart's multi-media ways of getting her 'home' stuff to your home)
- Brand: How you communicate your offerings (e.g. Absolut vodka's "theme and variations' advertising concept)
- Customer experience<>: How your customers feel when they interact with your company and its offerings (e.g. the Harley Davidson owners' community)
Collaboration within company departments and with customers is
absolutely essential to the success of any of these ten types of
innovation. My sense, however, is that in most large organizations
collaboration (as opposed to mere coordination) is antithetical to
corporate culture, modus operandi, and hierarchical structure. That's
why many innovation advisers think innovation is best done in a
business unit separate from the main operating unit, where emphasis is
inevitably on protecting the status quo.
And that's also why I was surprised to see the results of a new study,
by KPMG and Ipsos-Reid, of Canada's most innovative companies. Only
three of the top 10 are small-to-medium sized businesses (Research in
Motion, Westjet Airlines and Ballard Power Systems). The others include
four of Canada's five largest telecom and broadcasting firms, its
largest grocery chain, its largest engineering firm and its largest
software distributor. And while this 'bias to big' is less noticeable
in the Innovation category than in the overall Most Admired rankings
(which are top-heavy with banks), it struck me as peculiar -- until I
read how the winners had been selected: Only the CEOs of Canada's
leading (read: biggest) corporations got to vote. It's not surprising,
then, that they picked almost exclusively other large corporations.
I
wonder what the answers would have been if they had asked customers?
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