Thursday, August 19, 2010

How to research new products and services.

Post 544 - Finding out what customers want or value when creating new products or improving existing ones isn’t as straightforward as it may see. For example, when asked, nobody thought they wanted the Aeron chair. Henry Ford once said, "If I had asked people what they wanted, they would have said faster horses." If you ask, most people can only tell you what they 'think' they want. And they can't imagine what they haven't already experienced.

Surprise innovations confound those who believe that customers will use the product only as directed. An Indian company marketed a bicycle with a small engine. The bike didn’t sell very well but in one region, customers kept ordering the engine by itself. Upon learning that farmers were using it to run small irrigation pumps, the company switched businesses and became the leading maker of such pumps.

Innovation is the ability to continually and constantly renew, replenish and enrich our views, philosophies, values and competencies by looking out of bounds, outside the lines and out of the box. Useful knowledge is widely dispersed and expensive to collect. In general, facts are too dry and personal experiences are too situational to decipher, so giving people the tools they need to find their own voice is the highest form of education. You can take an analytical approach (tell me about...), a physical approach (show me ...), and a creative approach (let's play a game ...). The more approaches you use, the more information you’ll get.

For example, try thinking about a product or service as a speedboat with an assortment of attached anchors, each representing something that the customer doesn't like about the current offerings. Then think about changes to the product or the introduction of new ideas and features that will allow the speedboat to break free of each anchor in turn. However, if you worship the voice of the customer in this way, you’re likely to only get incremental suggestions rather than brand new ideas.

Different levels of innovation please different people. Satisfied customers, who already feel well served, accept small, incremental improvements and resent major changes. Potential customers who are satisfied, but not delighted, by a competitors product, are attracted by a distinctive innovation that shows clear advantage but remains reassuringly familiar. Revolutionary changes appeal to potential customers who reject or ignore all the options currently being offered to meet their needs. Innovation that’s too radical won’t be widely accepted. To succeed in business, choose one group of customers and learn what they want. Then use your skills and resources to surpass their future hopes, not just to meet their present expectations.

Bigger companies tend to be rather conservative in this regard as they're focused on squeezing profits out of past investments rather than creating new sources of income. Innovation is frequently blocked by competing departments and functions that have plans of their own. The rule for success when innovating in bureaucracies is to stick your neck out just enough to get a haircut but not enough to risk getting your head chopped off.

Try to discover the things you know, the things you know you don't know, and the things you don't know you don't know. Move items from the category of things you don't know you don't know into the category of things you know you don't know. In the latter, you actually have some knowledge about whatever that subject is. You can then apply other methods to reduce your ignorance about the subject.

"It's only when you drop yesterday's assumptions that you can glimpse tomorrow's patterns and possibilities. To see deeper, unsee first." - Umair Haq

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