“It’s not enough to create new value in your products and your services. You have to create new value in your customers and your clients.” – Michael Schrage, Author and MIT Fellow
Innovation breeds success. There is no question about that. Henry Ford reshaped the world when he created the affordable Model T, Larry Page and Sergey Brin brought infinite knowledge at the touch of a button with the creation of Google, and Steve Jobs changed the face of everyday communication forever with the iPhone.
In these examples, an innovative product matched with the desires of the customer to create major success. But, often times, “outside the box” ideas or products are misguided and leave customers confused and asking “Why?”
Michael Schrage describes the woes of unguided innovation perfectly. In a compelling blog post for the Harvard Business Review, he remarks: “Asking ’How can we build a better mouse?’ in an era of touchscreen and haptic virtuosity is not a recipe for success.” Innovation without context can lead nowhere, and unguided advances can lead to ineffective innovation.
Successful strategic innovation comes from outlining a clear answer to the following question: “Who do our customers want to be?” When you know the answer to that question, you'll be better able to invest in the innovations that empower them to get there.
But how can we build this type of thinking into our innovative processes? Here are three concrete strategies to begin the transformation.
1. Redefine the Purpose of Innovation
For years, marketing and innovation professionals have labored creating new products and services that they think are valuable to their customers. Yet, they are often asking the wrong question. When the focus shifts to what the customers wants to be as a result of using a product, this signals a key shift in the traditional views of marketing and innovation. Our primary concern is no longer extracting value (i.e., money, subscriptions) from our customer, but making the consumer himself more valuable. Schrage explains,
“Simply put, this new focus redefines the purpose of innovation — which is not just designing better products and services, but designing better and more valuable customers.”
Instead of investing in products or services that seek to enhance your customer’s experience, invest in ideas that that will make your consumers better. When George Eastman founded Kodak in 1892, he wasn’t creating a company that sold affordable cameras and film. He was creating a world of photographers.
2. Create a Vision
For years, business innovators have prided themselves on how they disrupt the market. They have asked questions like “How can we allow customers to do something that no one has ever done before?” and they have spent millions researching the answers. Schrage urges innovators to do more. He wants you to ask yourself, “How do I want to transform my customers?”
Everyone credits Henry Ford with the mass production of automobiles and the creation of the assembly line. However, Fords greater vision wasn't a world full of cars; it was a world full of drivers. Once Ford (and others like him) transformed America into a nation of car owners, the automobile industry thrived.
A more progressive, transformative vision is necessary when addressing innovations within your company. A clear and defined vision of your customers’ futures can forever change your business. Ford saw a world full of drivers just as Eastman saw a world filled with photographers. Schrage explains,
“The essential economic takeaway from these examples is that long-term innovation success doesn’t revolve around what innovations ‘do,’ it centers on what they invite customers to become.”
Worry just as much about the future of your customer as you do about the future of your products, and you'll win.
3. Know That The Customer IS the Value
Sam Walton didn’t invest simply in new products or services when he built Walmart’s empire. He deployed innovative scale and supply chain strategies that trained his customers to become everyday, high volume, low price shoppers. Walton’s innovations fundamentally changed the lives and habits of his customers and created an empire. Schrage explains this phenomenon as follows,
“You’ve got to begin with a value offering and the recognition not that you’re simply meeting customer needs, but you are training and transforming your customers by investing in innovation that transforms their behavior [and] that transforms their perception.”
All these success stories share one commonality: these entrepreneurs invested in the capabilities of their consumers. Their innovations ensured substantial, lasting change to their customers’ everyday lives. Unlike most innovators, they were not focused on transforming a product. They transformed their customer.
So ask yourself: Will my innovations habitually change my customers lives? An affirmative answer to that question is a great place to start.
How are you focusing on the customer with your product innovation? Tell me your story by tweeting @eidsonpartners.