Where to start with innovation?


Where to start with innovation?



Before we get into where to start with innovation, we need to very quickly burst a commonly held view that innovation starts with an idea. It doesn’t.

Many organisations embark on their innovation agenda by encouraging all their employees to unleash their creative thinking and submit their latest and greatest ideas for improving what the organisation does – they create hackathons and/or establish idea portals where employees can easily submit their ideas in an attempt to demonstrate the organisation’s commitment to innovation. This approach is doomed to fail for two reasons:

When starting with an idea, there is no mechanism for determining whether the idea is going to create value for its intended customer – that the idea is actually to be “better” than the currently available solutions in ways that matter to the customer. Any new idea will be based on some assumptions around what customers value, but this is all they are, a bunch of assumptions many of which will be based on weak insights or the cognitive biases that prevail in the organisation.

  1. With a vast array of disconnected ideas, the organisation faces an impossible challenge – to determine which of these ideas are “better” and hence should be pursued. Faced with this complexity, most organisations pick a few ideas based on how well they align to the beliefs and views of the leadership team on the basis that the leadership team have an unusually deep insight into what customers value!

This is where it is useful to turn to the godfather of modern innovation theory, the late Professor Clayton Christensen of Harvard Business School – the man who coined the term “disruption” and who has been acknowledged as one of the leading global business thinkers over the last two decades. His work uncovered that “Thirty thousand new consumer products are launched each year. But over 90% of them fail – and that’s after marketing professionals have spent massive amounts of money trying to understand what their customers want”.

What this work highlighted is that products don’t fail because they don’t work (organisations are typically very good at taking ideas and turning them into products or processes that work), these products fail because they don’t create the anticipated value for their customers – the products are made “better” on dimensions of value that don’t drive customer behaviour or choice. And with customer needs and preferences changing faster than ever before, this risk is only increasing making it even more likely that innovations that start with an idea are going to fail.

The solution to this is to start innovation by identifying an opportunity – an opportunity to solve a customer problem where the problem is being poorly solved by the currently available solutions in market. Organisations should focus their efforts on identifying where these opportunities exist and then focus their innovation effort on solving the biggest opportunities.

Unfortunately, traditional customer research has done a poor job at uncovering these opportunities. That is part of Christensen’s core insight: historic methods for uncovering what customer wants and value have not served marketing professionals well. Christensen determined that “Customers hire products and services to get jobs done” in the same way that organisations hire staff to get specific jobs done. And “once you understand the job, then the product design is relatively straightforward”.

Using this approach, innovation opportunities will exist where customer jobs are not getting done well by the available market solutions. It is these opportunities that are the golden nuggets and it is these opportunities that organisations should get excited about and use as their basis for their innovation effort.

So, if you’re struggling to know where to start when it comes to innovation, start by uncovering opportunities to get customer jobs done better and not with ideas and make sure you fall in love with these innovation opportunities and not the pet ideas of the most influential people in your organisation.

If you would like some more information on this topic, I’d love to hear from you! Drop me a line at chris@orangequid.com.au.

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