Successful Innovation Means Matching Ideas to Customer Needs

A great deal of time and resources in innovation is spent on wasted, unsuccessful ideas, according to Arthur Middlebrooks, adjunct professor of marketing and executive director of the Kilts Center for Marketing. “This is, at the heart of it, a marketing problem – more specifically, a market research problem,” said Middlebrooks, who shared insights about innovation at the Steingraber/A.T. Kearney Speaker Series at Harper Center on January 15.

Innovation failures occur in products that are not successful in or never make it to the marketplace, he said. For every 100 products developed, only 24 get launched, and about 14 are successful, Middlebrooks said. “That is a very high attrition rate,” he said. “The bottom line is that one out of every seven ideas that is pursued is successful in the market.”

Historically, since the first formal innovation process was proposed in 1980, almost all of the innovation processes assume solutions are developed before beginning the process, and otherwise skip or minimize the “fuzzy front end,” or earliest stages, Middlebrooks said. “In particular, they skip how the ideas or concepts actually get generated and selected,” he said.

Attention on those early stages has just started to emerge within innovation, Middlebrooks said. “What’s entirely missing from most companies’ innovation processes is the step on deciding what customers actually need and then designing or brainstorming solutions to those particular needs,” he said.

An approach Middlebrooks called the “needs-first innovation process” adds this stage to the front end: uncovering customer needs, organizing those needs, prioritizing them, and then generating ideas and solutions. “We’re looking specifically for two types of customer needs: those that are important to customers and those needs that are currently unmet in the market,” he said.

The single biggest mistake in uncovering customer needs is asking the wrong questions, a common misunderstanding in product development, Middlebrooks said. “We ask customers for solutions — ‘tell me what to build’ — as opposed to asking customers what their actual needs are. Customers generally can’t envision the solutions. They might not understand the tradeoffs they have to make between solutions.”

He said the right questions to ask customers are:

  • What are you trying to get done? What’s the outcome or result you desire?
  • How does the product or service available today fit those objectives? “A great way to uncover needs is to ask customers, ‘What happens before, during, and after you use this product or service?’” Middlebrooks said.
  • What do you like best and hate most about you experience with the existing product or service?

“Those are the broader questions to ask,” he said. “More specifically, you can ask them about problems they have when using a product or service. Where does it slow things down, or what are the issues about speed? Where are things difficult, or what are the issues about ease of use? Where is it unreliable or unpredictable? Where is it costly or inefficient? Focus on the benefits the customer is looking for, not necessarily the products or solutions.”

--Phil Rockrohr