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Customer-Centric Innovation – Are You Faking It?

Let’s face it, it’s not that hard to be innovative in business.  But being innovative in ways that customers care about and that drives profitable growth?  For most companies, that’s hard.  At ThirdSlice, we believe that the linchpin of successful product and service innovation is having a process that puts the wants and needs of customers at the center of everything that you do.  Time and again we have seen clients use carefully developed customer feedback in ways that fundamentally changed the product or service under development and, in many cases, helped avert an almost certain new product disaster.

Soliciting customer feedback during the ideation and development process sounds so incredibly obvious in 2016, and yet we continue to be amazed at how many companies don’t take it very seriously, and how many others don’t do it at all.  This despite the fact that everyone always says that their innovation processes are customer-centric.  Not being good at developing customer feedback we can forgive; that is our expertise, not our clients.  But not soliciting customer feedback at all?  That’s just plain dumb.  In our mind, there are really only two reasons not to intensively use customer feedback during innovation; either the product or service being developed is so novel that customer can’t possibly provide meaningful feedback until they actually use it (an incredibly rare circumstance), or the stakeholders who would normally rely upon and benefit from customer research are opposed to using it (more common that we’d like, but also solvable…usually).  Some might also argue that the need for pre-launch secrecy can make it impossible to get customer feedback, but the need for such extreme secrecy is incredibly rare in most commercial markets.

From our experience, the best customer-centric innovation processes have the following eight characteristics:

  • They call for the intensive use of customer feedback throughout the innovation process and product lifecycle, beginning in the ideation phase and ending with research to inform product line and lifecycle extensions.
  • The use of customer feedback is planned, meaning that the people leading the development of new products are trained to know where and when customer feedback is both valuable and required, and don’t make ad hoc decisions (which often come too late) about when to conduct research.
  • They are professional, meaning that someone with significant research experience is managing and/or executing the research to ensure it produces the most valuable insights possible.
  • They are cross functional, meaning that members from across all critical departments involved in new product development – typically marketing, product management, engineering, and sales – actively participate in the generation and consumption of the research.
  • They are experimental, meaning that they recognize that research techniques and best  practices are continuously changing, and that valuable new insights that lead to competitive advantages can be obtained through the use of new research methods.  They’re willing to give them a try.
  • They are supported from the top, meaning that senior management fundamentally believes in the value of customer feedback when developing new products, and continually advocates for its use.
  • They explicitly use research as a way to a) improve the product under development, and b) reduce the risk associated with the company’s investment in the new product by increasing management’s confidence that the product is something customers will actually want.
  • They are adapted to the nature of the business and the project – sometimes through the use of techniques such as Agile and Lean development methods and sometimes through the use of streamlined processes for less risky projects – to ensure the customer feedback portion of the innovation process is providing maximum advantage to the business, and never holding it back.

Despite the fact that virtually every company claims to put the customer at their center of their innovation efforts, few companies have developed innovation processes that incorporate all of these elements.  Fewer still follow all the elements of the processes that they do have.  But from our experience, the more elements of a customer-centric innovation process you choose to embrace, the higher will be your levels of new product success, the faster you will get your products to market, the lower will be your R&D costs per dollar of new product revenue, among other measurable benefits.

Ask yourself: to what degree do the eight preceding requirements describe your company’s innovation process?  Which are stated elements of the process and which are absent?  Of those that are stated, to what degree are they followed?  By taking a step back and mapping your company’s approach to innovation against these eight key characteristics, you’ll undoubtedly have some good ideas about where to focus your efforts on the road to a customer-centric innovation strategy.  Because if you say you’ve got a customer-centric approach to innovation but you’re really just faking it, you’re only fooling yourself.

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