3 Mistakes Companies Make When Fostering a Culture of Innovation

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Given the rapid pace of change today, it’s no surprise that many leaders want to create a culture of innovation to stay relevant.

Yet, in my work as an innovation and growth-strategy consultant, I consistently see organizations make the following three mistakes:

  1. Confuse innovation with creativity
  2. Generate ideas instead of gain insights
  3. Seek to understand customers instead of the jobs that customers are trying to get done

Mistake #1: Confusing innovation with creativity

Innovation and creativity are different. There are many definitions for innovation, but I like this one because it reveals the two key steps of innovation:

“Innovation is the process of first discovering target customers’ (internal or external) unmet needs and then developing solutions to address them.”

This sequencing is critical for success if organizations want to transform innovation from a guessing game into a business process that consistently delivers results. There’s a reason why doctors conduct a patient diagnosis before developing the treatment plan: because it informs them in how to develop the best treatment plan.

Similarly, companies should learn how to conduct an effective “customer diagnosis” to inform them in how to develop the best new and improved offering.

Creativity, on the other hand, is only part of innovation. It’s the mental process of making connections between the target customers’ unmet needs and solution capabilities. Hence, the essential building blocks for creativity are to gain a clear understanding of:

  1. The target customers’ unmet needs
  2. The solution capabilities available to address those unmet needs

It’s virtually impossible to be creative and generate a winning new offering that addresses an important unmet need if you don’t know about the unmet need or misunderstand it. This is why creativity training alone often fails to deliver results. It’s shooting at a target (the customers’ unmet needs) with a blindfold on.

Most organizations don’t lack creativity; they lack focus. They lack clarity about where the best opportunities in the market lie. Gaining clarity about where the best opportunities lie requires talking with target customers. Once these insights are obtained, employees will have the focus they need to apply their creativity and expertise to the issues that target customers care about most. This dramatically improves results. The best creativity trigger is a well-defined customer need.

Mistake #2: Generating ideas instead of gaining insights

Contrary to conventional wisdom, innovation does not begin with a good idea; it begins with an insight. Every new solution idea has an insight about an unmet need and a new way to address that unmet need. An idea is not fully formed if it does not consist of an insight about how to address an unmet need in a new way; that’s what an “idea” is.

Successful innovators know that they must first prepare the soil in which creativity and ideas can germinate. That begins with obtaining clarity about the target customers’ unmet needs and the solution capabilities available to address those unmet needs.

By focusing on generating ideas before understanding the target customers’ unmet needs, companies unwittingly engage in a haphazard guessing game that generates many bad ideas that waste time and resources to vet. In truth, any idea that doesn’t address an important unsatisfied need is a bad idea. Companies can dramatically increase their new product success rates, unclog the stage gate process, and quicken the time to market by first discovering customers important unsatisfied needs.

Companies that know how to conduct a customer diagnosis upfront to identify the customers’ unmet needs find that they can narrow their focus to a few big opportunities that they know customers care about. This information enables them to consistently generate good, even breakthrough, ideas.

Mistake #3: Seeking to understand the customer instead of the jobs that customers are trying to get done

Contrary to conventional wisdom, you do not need to obtain a deep understanding about your target customers to win at innovation; you need to gain a deep understanding about the jobs they are trying to get done with your offerings and the circumstances in which they execute those jobs.

To generate the design and features of the iPhone, for example, Apple did not need to know what magazines its target customer read, their age, education level, ethnicity or income.

While this sort of demographic information is very important for reaching target customers with messaging, positioning and the product after a new offering has been conceived, the most important information companies need to generate breakthrough ideas is to determine:

  1. What job(s) are target customers trying to get done that the firm can address?
  2. How do target customers measure success when executing each step in the job?
  3. Where in the process are they struggling given current solutions and why?

The answers to these questions are readily available to all who know how to conduct a customer diagnosis. The answers obtained explain why customers buy various products and services and this turns innovation into a business process that consistently yields excellent results.

By focusing on helping customers get their jobs done better rather than generating ideas, managers can be confident that their people will devise solutions that deliver superior value, establish competitive advantage and drive growth.

Take a moment to write out the answers to the 3 questions above and see what insights you gain. Even better, talk with at least five target customers to discover the answers. Remember, don’t talk about solutions when obtaining this information. Contact me (uw@revealgrowth.com) if you need help or have questions.

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(A version of this article initially appeared in The Business Journals, December 11th, 2017)

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Comments

  1. Gary Monti  January 8, 2018

    Great blog. Crisp. Clear. To-the-point. It is so easy to get distracted when working to innovate. These 3 tips are keepers!

    • Urquhart Wood
      Urquhart Wood  January 16, 2018

      Thanks, Gary. I am pleased to hear that the blog resonated with you.