How to Innovate: Start With the Customer

Innovation isn’t just for technologists or scientists. At its core, innovation is about finding a new way to address an unmet need. Organizations that learn how to identify their customers’ unmet needs before generating ideas can become excellent at innovation. If you ask the right questions of the right people, you can figure out how to fulfill those needs faster and better than anyone else.

Consistently driving revenue growth is hard. Very few businesses can sustain it. Innovation is essential. For many organizations, however, generating ideas to create new value for customers is a frustrating experience fraught with high failure rates. Each flop wastes time and money, hurts the company’s reputation, and employee morale. Yet this is largely unnecessary. It’s time to pivot how companies innovate.

It has been said that, “Asking the right question is half the answer.” While this is certainly true, asking the right people is equally important. Some of those “right people” are not sitting around the conference room table either. They are your target customers (your customers and your competitors’ customers). As Peter Drucker said, “You cannot arrive at the right definition of results without significant input from your customers.”

Years ago, before I knew better, I facilitated a one-day strategy session for an engineering firm. The objective was to generate ideas to create new value for customers to drive growth. We spent the morning session reviewing the firm’s performance as well as market data to lay the foundation for generating ideas in the afternoon. Everything went extremely well according to plan. The team was fully engaged and prolific, generating 37 different ways to create new value for target customers. There was excitement and hope about the future.

Six to eight months later, I ran into the president of the company and asked him if any of those ideas had been commercialized. Much to my dismay, he told me that none of them had even been developed, let alone commercialized. The reason? Because he didn’t know which ideas were truly valuable to customers. Bummer.

This same scenario plays out in organizations every day. What most organizations don’t know, however, is that they can obtain clarity about their customers’ important unsatisfied needs before generating ideas and strategies. By identifying your customers’ unmet needs first, your organization’s full pallet of creativity and capabilities can be focused on opportunities that are already validated by customers and already vetted by your company as highly attractive to pursue. This is the essence of good strategy and it leads to a tight fit between what customers want and what your company actually delivers.

If you want to accomplish something you never accomplished before (dramatically drive growth through innovation), you need to start doing something you never did before. That “something” is discovering what your target customers want to accomplish with your offerings and the criteria they use to measure success, not their ideas about the offerings itself.

Forget about asking customers for ideas about how to improve your product or service. That’s not their expertise; that’s your responsibility. They can tell you, however, what task(s) they want to get done, how they want to feel, and be perceived when using your offering, or in any domain – even when there is no offering. Remember, customer “needs” are totally separate and distinct from solutions.

So ask those questions, the right questions, of the right people. Once you know where the compelling unmet needs lie, it’s much easier to figure out how to fulfill them, faster and better than anyone else. This approach will make innovation and growth a predictable business process, quicken time to market, and dramatically increases your success rates.