Tuesday, August 28, 2012

Strategies for Discovering Innovation Opportunities

One of the most difficult challenges for the R&D professional is to identify and uncover a new or emerging need.  A veteran product developer often reminded me that “we humans are coping animals.”  We put up with the way things are until we believe there is an alternative.  Without the belief that there is a better way, we simply cope.  This coping tendency makes it hard to discover new or emerging needs in the market.

How then can the R&D professional listen to customers or end-users who are not able to articulate their needs very well, if at all?  How can we listen for new and emerging needs when we are not certain that the end-user for tomorrow’s new product will be the same one as today's?

We have observed three strategies for listening to end-users who are not as “articulate” as we wish they would be.  The strategies are called ideation, foresight and insight.  All three strategies require R&D to invest time and effort up-front in the identification and understanding of opportunities before rushing to invent and develop solutions.  However, each strategy takes the R&D professional into a different set of activities and methods, each with its own inherent strengths and weaknesses.

Ideation Strategy

The ideation strategy relies heavily upon the generation of ideas.  Here product developers generate and develop new product concepts and use them as “hidden microphones” to listen for the symptoms of new and emerging needs of end-users.  These concepts are used to stimulate reactions from end-users or customers with the hope that new and emerging needs will be expressed.

One advantage of this strategy is that it uses common and accessible tools and techniques of market research (e.g., focus groups).  Having new concepts to test gives you more of a reason to talk to customers, and conversing with end-users within this context is familiar and safe.

One disadvantage of this strategy is that the generators of the concepts often become wed to their ideas, and so the concepts become the ends rather than the means of discovery.  Even when concepts are regarded as “listening probes,” R&D professionals often wonder whether potential areas of opportunity were missed because the concepts were so limited in scope.

Foresight Strategy

The foresight strategy uses trends to uncover new and emerging needs.  The rationale is that new and emerging needs come from new attitudes and behavior, which are derived from trends.  If you identify and understand a trend, you are in a better position to identify a new need.

Given the lead time it takes from concept to commercialization to develop a breakthrough new product or innovation, many try to uncover and anticipate new needs for enough in advance to have time to prepare.  The foresight strategy is attractive to many because even with mediocre marketing, you should be able to succeed if your new offerings are aligned with the momentum inherent in the path of development.

In practice though, we have seen a lot of R&D efforts become distracted with the identification and analysis of trends.  People often place too little emphasis on making creative and solid associations between the trends, their company’s core competencies and the new and emerging needs.  They often over-indulge (in time and dollars) on trend identification, while underestimating the importance of doing trend analysis from the perspective of their company’s unique technical and market strengths.  Therefore follow-through and internal integration efforts tend to fall short.

Insight Strategy

The insight strategy, the least understood but perhaps the most potent of the three strategies, uses in-depth interview and ethnographic methods of observation to discover new and emerging needs.  Carefully selected subjects – both existing customers as well as “leading edge” users and even non-users – are interviewed and observed in their “native” environments.  They are even invited into the interpretation of their own behavior and attitudes.  This is a good method for originating proprietary end-user insights – perspectives on the end-user that your competitor is not likely to see.

The insight strategy is not for the faint of heart.  It requires organizational patience, a long leash extended to those involved in the research, and a special tolerance for ambiguity, characteristics which are not often found inside our organizations.  While it takes patience and discipline, the payoffs can be quite large – total new “competitive spaces,” as 3M calls them, have been discovered with this strategy that have led to new categories of products.  The elusive “big idea” may result from this strategy more than any of the others.

Ultimately, each team will want to consider its own combination and variation of these three strategies.  Whichever strategy is taken, the identification of new and emerging needs is best done by R&D professionals intimately familiar with the technical capabilities of their company and with what is technically possible.  Surround technically-savvy R&D professionals with ideas, foresight and insight regarding existing and potential end-users, and watch them help the market find the words for needs that had previously remained silent or hidden.

Listening requires ears.  Hearing requires empathy, understanding and imagination.

This article was originally published in Innovating Perspectives in April 1997. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 387-1270. 

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