Archery, Not Baseball, Provides Better Model for Developing Innovation
Google announced recently it will shut down Google Wave, which only a year ago had been heralded as “the app that would revolutionize communications.”
The company also shut down Dodgeball, Mashup Editor, Google Video Uploading, Google Catalog and Google Notebook before that. Google Buzz is expected to follow suit.
Are these new product flops the inevitable consequence of a well-run innovation process – or an indication the process is flawed?
If innovation is coming up with solutions to address unmet customer needs, it can be executed in one of two ways:
One is ideas-first. That is, coming up with ideas and then seeing if they address unmet needs.
The other is needs-first, which is identifying the unmet needs and then devising solutions that address them.
A lot of companies fail in their efforts to manage innovation because they’re executing the innovation process ideas-first, like Google. The “ideas-first, fail-faster” approach is based on the belief that innovation is a numbers game: the more ideas, the better. In other words, if we come up with a lot of ideas, then some of them are bound to be good. After all, Babe Ruth had a record number of strikeouts as well as home runs.
Aim, then fire
While a lot of companies follow this kind of thinking and a lot of books promote this philosophy, it has an 80 percent to 90 percent failure rate that costs companies billions of dollars each year. The ideas-first approach will never deliver the kind of predictable growth that companies are looking for because it’s a guessing game.
There have been many studies comparing companies that are innovative with those that are not, and the primary distinguishing factor consistently has been the degree to which companies understand their customers’ needs.
Companies that excel at innovation execute it like archery, not baseball. In archery, you see the target before firing the shot. Such companies execute the innovation process “ready, aim, fire,” and they hit the target consistently. But companies that believe innovation starts with a good idea and as a numbers game are executing the process “ready, fire!” and then asking, “Did we hit anything?” It’s a wasteful and time-consuming process of trial and error.
But by knowing all the unmet needs in advance of idea generation, companies can eliminate hundreds of product iterations and transform 80 percent to 90 percent failure rates to 80 percent to 90 percent success rates.
The key to success with innovation is in understanding what a customer need really is. Most companies confuse solutions with true needs. The late great Harvard Business School professor Theodore Levitt made the distinction between a need and a solution nearly four decades ago when he declared, “People don’t want to buy a ¼ inch drill. They want to make a ¼ inch hole.”
Actually, Levitt didn’t go far enough. As one of my colleagues, Lance Bettencourt, has written, “People don’t want to buy a ¼ inch drill. They want to hang a picture. They want to accomplish something.” Similarly, people don’t want to buy a fixed-rate mortgage. They want to finance a home.
What are the jobs that your customers are trying to get done with your solutions? Innovation is not about making a better offering, per se. It’s about helping customers get more jobs done or a specific job done better. This is the focus that leads to breakthrough and predictable innovation.
Fast followers can thrive
If innovation is the process of devising solutions that address unmet needs, then the basic building blocks for innovation are a good understanding of the unmet needs and the solution capabilities.
If you don’t know all the unmet needs before generating ideas, then ipso facto, your creativity will be limited and no amount of left brain/right brain training, creativity tools, collaboration or open innovation is going to fix this problem. That’s because the problem isn’t a lack of creativity, it’s a lack of knowledge about the customers’ unmet needs.
The proper place for inspiration is not in attempting to divine customer needs. It’s to devise concepts that address identified, well-understood, customer needs.
Many companies justify the ideas-first approach by saying they can’t wait for the upfront market research to be completed. What they fail to recognize is that it’s not the company that is first to market that reaps the greatest rewards. It’s the company that is first to market and gets the offering right that reaps the greatest rewards. Many companies that are fast followers do well precisely because the first mover didn’t fully understand customers’ needs.
Additionally, many companies justify their ideas-first approach because they have been led to believe that you can’t uncover all the customers’ needs – that it’s impossible because customers have latent, unarticulated needs. This is simply false. Contrary to popular belief, innovation and growth, if they are to be predictable and repeatable, must be executed needs-first.
Think archery, not baseball.
(This article first appeared in Columbus Business First, October 4, 2010.
