Foresight 20/20

I find it useful to think about two types of consumer motivations; those that are explicit, and those that are tacit. 

Motivations that are explicit are those that consumers can tell you about directly.  For example, if you want to improve your product you can find consumers who use it, and directly ask them what should be improved.  These improvements could be things like enhancing ease of use, changing product placement so they can find it easier in the store, adding new features, or delivering the same features in new ways.  You can see how you would map out a plan to implement these ideas, and your company can decide how or when to invest in them.

Motivations that are tacit are those that consumers cannot tell you about directly.  For example, let's say that the consumer tells you that one improvement would be to enhance ease of use of your product.  You may be able to improve the direct experience of using your product, but what if the real motivation behind that comment was deeper than that?  What if the consumer lacks confidence in performing the overall task that your product is a tool in accomplishing?  If that is the case, then improving the experience of using your product may not help them to achieve their overall goal.  You may need to develop an entirely new product that addresses their needs more holistically.  Or you may be able to market your product more broadly as a tool within a larger process that you can then own.

When you are thinking about innovating in your company, it is useful to make a clear distinction about whether you want to improve your current products or develop something new and different.  This will dictate the type of consumer research you will need to guide development efforts. 

Product improvements can be guided by explicit consumer motivations, and they can be discerned through direct research methods.  These methods are relatively quick to conduct and interpret, and can guide improvements directly.

Inventing new products, business models, or other types of disruptive innovations are best guided by understanding consumers' tacit motivations regarding your category.  These methods are exhaustive in their depth, and require people who are very skilled in this type of work to spend a lot of time analyzing, hypothesizing, and evaluating their conclusions.  Getting it right, however, will yield unlimited inspiration by which you can guide innovation efforts and evaluate their potential success.

This video "The Process" is a great illustration of Monday's post.  Thank you Katie for sending the link!

http://www.todaysbigthing.com/2008/07/23

Enjoy!

This sounds really obvious.  Your company decides to develop a new product.  This new product will fill a real market need.  So of course all the activities that occur during the development phase exist to ensure that the new product will fulfill this market need in the best possible way.  Then why is it that so many new products are launched in a form that is unrecognizable from the original intent?

The act of developing a product takes up much more organizational time and energy than the act of determining the right intent for the next product.  That doesn't mean that the intent is less important than development, but it does contribute to the fact that it can get lost in translation.

Let's take an example.  Say you are a company who learns that your consumers like to actively talk about your products and services.  After exploring many alternatives, you decide to develop an online forum to enable easy discussions.  Early on in the development process, it's decided that the forum could easily have all kinds of great features to make it the best forum around.  It now has great search, great graphics, lots of categories, you name it.  The excitement in the company is infectious, and as you walk the halls, you hear people talking about how this will be the best online forum out there.

It suddenly occurs to you that people are not talking about how you ultimately will be facilitating consumer discussions about your products.  In fact, they are also not talking about how the great search functions, graphics, and categories will enable people to have online discussions more easily.  At the next team meeting you ask everyone what is driving their decisions as they continue to develop this new offering.  The answers are unanimously "to build the best forum out there."

This was a made up example, but we've all been in a similar situation.  The forum was a solution intended to achieve a goal of enabling consumers to have easy online discussions.  It ultimately took on a life of its own and became the goal, and the original intent was lost.  It happens more often than we realize.

Start every meeting with a recap of why you are developing the product in question.  Evaluate every new feature, and every decision you are making against how it will help you to satisfy the original market need.  It's necessary to be relentless in making the original intent occupy its rightful place in the organizational mindset.  Otherwise the solution will determine the goal, rather than the goal determining the solution.

There is an interesting discussion going on in one of my Google groups.  (Thank you Cameron, Victor, Shel, and Manuel.) It's about the idea of Elimination Design, and is culminating in the development of a design award for removing things rather than making things.

Of course, services come to mind when thinking this way, and an example was given of a woman who wanted to have a cool, funky wardrobe.  Instead of buying new clothes, she hired someone to find clothes that had already existed at thrift shops.  They would be more funky, one of a kind, and interesting than what she could find in a department store anyway.  Then the example was extended.  What if the shopper then took the woman's existing clothing to be donated to the less fortunate?  At that point, the service evolves to the shopper becoming a clothing redistributor, and you can carry out this evolution to many interesting conclusions.

I talk a lot about developing offerings that will add value to consumers' lives.  But adding value doesn't have to mean adding things.  I'm sure many consumers would find value in being able to reduce the number of things they need to buy, maintain, and ultimately discard.

People buy products because of the experiences they will have when they use them.  What experiences do your products provide to your customers?  Is there a way you could provide those experiences by eliminating things?  This type of thinking could spawn incredibly innovative business models, beyond the basic service model example stated above.

I'll keep you posted on the development of the competition.  Whether or not you enter, I hope it will inspire you to think differently about the intangible value you provide to your customers.  It's not just about the stuff.

Who is responsible for innovation in your organization, and how do they ensure that it happens in the right way for your company?  Not surprisingly, the answers to these questions vary greatly.  Here are some of the most common answers I've encountered:

• Everyone is responsible for innovation, because good ideas can come from anywhere, and people need to be empowered to bring them forward.
• The Head of R&D, because we need to be developing new technologies that can drive our success in the future.
• The Chief Innovation Officer, who is responsible for forging relationships with technology partners and developing new processes for the organization to integrate them.
• The Head of New Product Development, because innovative ideas are embodied in new products and services.

Of course, there is no single right or wrong answer, as every company is different.  What is striking is that the main focus of these roles is on collecting new ideas and technologies.  I seldom hear of roles that are focused on determining the success criteria for new ideas and technologies beyond internal metrics.

Today I will leave you with a few questions that I'd like to explore further.  How many organizations drive innovation efforts based on success criteria that satisfies consumer goals?  By consumer goals, I mean understanding the motivations behind what your consumers do.  What needs does your product or service really satisfy?  What would provide a better solution and fit more consistently into the consumer's life? 

Finally, who is responsible for ensuring that your organization has the right answers to these questions?

I've talked about how it is often more valuable to learn from Lead Users than Early Adopters when developing new products and services.  I've even talked about the role of the Laggard in this process.  At this point it would be unfair for me not to mention the value of the Early Adopter.

As mentioned before, Early Adopters are people who are very involved in your product category.  They like to try new things in categories they care about, and they value being the first person to have the latest and greatest.  They also tend to be the people that the average consumer will seek out for advice before buying a new product, because they have likely tried most available options. 

For this reason,  they are a great segment  to focus on when you are marketing new products.  They lead the masses, and can be great advocates for your offering.  In some cases, they are also Lead Users, but not always.  But generally speaking, they are almost always a good segment to "market to."  What can you learn from them?  You can learn about why they are Early Adopters in your category.  Find out what aspect of your category they love, and make sure you speak to those attributes when you market to them.  Many companies already do this type of research.  It is fairly straightforward, and can directly inform your marketing message.

The next time you are planning which consumer segments you are going to research, make sure you can answer these questions.  Are you trying to develop a breakthrough offering, or are you trying to launch or improve an existing offering?  In each case, consider which consumer groups you need to learn from, and which groups you need to market to.  Sometimes the answer is the same, but don't get caught off guard if they are different.

The Laggard is an interesting beast.  In marketing terms, the Laggard consumer is so far behind the adoption curve that it makes little sense to expend resources to attract them.  When we are developing new products and services, however, we may want to reconsider the time and attention we give them. 

We've talked about learning from Lead Users as a way to stay ahead of market needs when developing new products and services.  In trying to ensure that the new offering will appeal to a broader audience than just the Lead User, many people like to also learn from the Early Adopters.  While the intent is good, the problem is that the Early Adopter likes new products simply because they are new, and this enthusiasm may lead you down a path that is interesting, but not particularly useful.  Learning from the Average Joe in your category is even less helpful, because these people don't care enough in either direction to illuminate their underlying motivations.

Learning from the Laggard, on the other hand, can yield a treasure trove of useful insight.  In some cases, these people are working just as hard to shun your category as the Lead User is working to innovate within it.  While the Lead User is helping you to understand what your new offering should do, the Laggard can help you to understand what your new offering should not do. 

An (oversimplified) example can be illustrated by the evolution of the PC.  The original PC made it easy to input and store documents and other data.  It also required that you sit in front of it to type in notes you may have taken at a meeting.  Many people did not want to do two steps and limited their use of the PC.  Enter the laptop.  Take it to a meeting or on a trip, and you never miss a beat.  Then there were people who disliked that fact that the screen was so small that they didn't like using it as a sole computer, didn't want to maintain two, and limited their use of the laptop.  Enter the docking station.  You get the point.

Of course, there are some people who are Laggards because their inertia and reluctance to change present too great an obstacle to be overcome, and I'm not suggesting that we break our backs to try.  What I am suggesting is that when trying to innovate within your category,  it may serve you well to find the people who are Laggards because using your current products would force them to give up something valuable.  If you solve that problem for the Laggard, chances are that the rest of your market will like it too.

As consultants we are often faced with a dilemma.  Our clients hire us because they need a fresh perspective that is unencumbered by the internal constraints, politics, and metrics that guide the day to day activities.  We know, however, that our recommendations cannot be implemented unless the organization adopts them.  If the recommendations are perceived to be too (scary, out there, different, impossible, etc) the likelihood of adoption is diminished.

This is a tricky balance to strike.  Some consultants solve it by presenting a fully implementable, turnkey solution to the organization.  Success usually requires a mandate from the most senior members of the organization for any type of adoption to occur.  We can see the organizational problems this could cause, but there are times (such as extreme organizational crisis) that it is the best way to proceed. 

Others involve client teams through the entire, messy process.  Success requires that all the client team members are able to suspend judgment while exploring new business realities.  They also need to be able to keep one foot in the comfort zone of the current business, while the other foot is outside their comfort zone.  This is a lot to expect of anyone, and can only work if enough time is invested in selecting these people and setting the right expectations for them to succeed.

It occurred to me the other day that the best results happen with a combination of these methods.  Sean Howard had a post about the role of serious play in the boardroom.  In it, he discussed a frightening experience where he brought crayons and blank paper to a final presentation meeting.  As I was reading the post and related comments, I started thinking about how the level of finish in a prototype can help to facilitate an environment conducive to mutual creation of the final solution.  As I thought about it more, I think the element of timing also played a crucial role.  Sean's team had already done 2 months of work.  While the elements for success existed, there was a need to simplify this complex information in order to communicate it to a diverse group.  Having the group join the process in how to communicate to each other was an excellent way to acheive that goal.

Clients often choose consultants for their proposals of "delivering a turnkey solution", or "involving us every step of the way".  These messages are easy to understand, and can only work under ideal conditions.  For the rest of us, accept the fact that some things are best left to the outsider, and spend time figuring out the best time for mutual creation.  It will be different for each client, consultant, and type of problem.   

Most companies have methods to evaluate the potential success of a new product or service.  Sometimes they come in the form of a focus group, or an online or in-person panel of consumers, or even an internal group of people who are thought to be "in the target market."  These types of evaluation typically have one element in common.  They usually are asking consumers directly about their preference of a new product over one, or several, alternatives.

This type of testing is useful if you are evaluating an incremental improvement, or correcting a problem with your current product.  These are things you can learn about directly from consumers, and during an evaluation they can directly tell you whether or not your solution hits the mark.  Companies feel good about these types of evaluation because they eliminate the guesswork in developing new products.

The problem arises when you are trying to evaluate a new product or service that challenges accepted paradigms of behavior within a category.  When asked about preference, consumers generally have a strong bias toward what is familiar.  Any new product or service that challenges the familiar runs the risk of performing poorly in a preference test.  There are countless examples of companies who missed an opportunity to be first to market because a product did not fare well in a preference test. 

Evaluating a paradigm changing solution requires different methodology.  The test needs to be designed to evaluate how well a new solution solves specific criteria, and consumers need to be immersed in that criteria to be able to give meaningful responses.  We can discuss many ways to do this, but what's important is that consumers are seldom asked to state their preference.

The next time you are struggling to understand why your new product is failing the standard preference test, think about whether it's the solution or the test that needs to be changed.