“Is innovation inherently a hit-or-miss endeavour? Not if you understand why customers make the choice they do”
Innovation for many large organizations is as mush a top priority task as a source of frustration. A McKinsey research revealed globally 84% of business leaders acknowledged that innovation was integral to their growth strategies, yet 94% were far from satisfied with the way initiatives fell short of aspiration. Something has been going wrong, despite best efforts. However, it isn’t as inscrutable as it is often made out to be!
With enormous volumes of customer information and cutting-edge data analysis available to organizations alongside talented individuals working on them, disciplined innovation processes and benefits thereof still elude organizations. “From the outside it looks as if companies have mastered a precise, scientific process. But for most of them, innovation is still painfully hit-or- miss.” The problem primarily lies in managers tending to base their decisions on customer data that show correlations – say, 65% customers prefer version A to version B – and not on causality. In fact, knowing more and more about customers along with such correlations is probably misdirecting organizations to take decisions that aren’t paying off.
To begin with, organizations need to understand what a typical customer hopes to achieve or the progress he wishes to make with the service or the product. Pinning down a customer’s job to be done and empowering him to accomplish that could be the way forward. And the ‘jobs’, complex and multifaceted as they would be, do not solely pivot on functions but have emotional and social dimensions as well. Buying a product or service for achieving a ‘job’ is akin to a ‘hire’. A satisfied customer goes in for ‘rehiring’, as against ‘firing’ marked by discontinuing the use, rejecting it, and seeking out alternatives. The ‘jobs-to-be-done’ theory bases itself on understanding the customer’s choice as the causal driver behind his purchase. And as a counter-thesis to the disruption innovation theory which has competitive response to innovation as its driving force, this allows an organization to focus on and differentiate its offerings from that of competitors.
Innovations and offerings must provide a compelling reason for a customer to make his purchase without making any trade-off. It is also essential to create the right set of experiences for its purchase and subsequent use, integrating those experiences into the company’s processes. It goes without saying, processes are critical to an organization’s culture and output. Data has its own place, with its significance and value. Ethnographic research, focus groups, customer panels, competitive analyses can all be key starting points for generating insights that drive innovation. Additionally, answers to a few simple yet critical questions could be analyzed too!
1. Have you identified the ‘job’ that is crying out to be done?
While the world is obsessed with data and the findings pointing to the big tasks that must be accomplished, some of the greatest innovation ideas take birth from discerning minds, with intuition guiding their efforts. Sheila Marcelo’s Care.com, with 19 million members operating in 16 countries and revenues close to $140 million in ten years, was born out of her own family’s struggle with caretaking needs. Another important learning comes from identifying people or groups that aren’t typically buying an organization’s services as from those that are. This could help an organization to take the next step in reaching out to them. “Nonconsumption is often where the most fertile opportunities lie”.
2. Do you see people inventing work-arounds?
When you see consumers struggling or getting by, “cobbling together work-arounds”, then that is a sign of dissatisfaction with the available solutions or options. Opening up new business lines or scaling up existing business could involve timely effort in plugging that gap.
3. Have your customers invented surprising new uses for existing products?
A novel twist to, or an unusual use of an established product or service could provide tips to what could be the next big thing. NyQuill, for instance, was sold for decades as a cold remedy. Some consumers were found using it for its soporific effect – to help them go to sleep. Hence ZzzQuill was introduced to offer consumers what they needed, minus the ingredients they didn’t need.
4. What tasks do people want to avoid?
There are plenty of jobs, daily chores and otherwise, that we loathe but cannot avoid doing. Providing innovative solutions to such ‘negative jobs’ that create stress and irritation can also give birth to a new loyal customer base. Companies tend to spend inordinate amounts of time and money in innovation efforts that bear disappointing results. Data-driven ‘informed’ decision-making or predictions also tend to disappoint. It’s time organizations read the signals that consumers send out, and based their innovation researches to less complex but more predictable and profitable endeavours. At the end of the day, successful innovations solve people’s problems and allow for progress they need to make. What’s it worth if customers and consumers are left asking, “What is in it for me?”