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Surprising innovation…..

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‘Listen to the voice of the customer’ – pretty clear advice delivered in thousands of business classes all around the world. And a foundation stone of good innovation management practice – right back in the 1970s the pioneering work of the Project SAPPHO team were uncovering the secrets of innovation success and failure. Their methodology was neat – take an innovation and find a pair of firms which had introduced it, one succeeding and the other failing to capture the benefits from it. Since the innovation was the same it was differences in the way the innovation process was managed which would account for the discrepancy in performance. SAPPHO paved the way for hundreds of other studies, replicating the methods and elaborating on them, digging deeper to find the secrets of success. And, no surprise, perhaps the most significant conclusion was the obvious one – firms which paid close attention to meeting market needs did much better.

But of course there are limits to this viewpoint. What if, as Steve Jobs notably asked, people don’t know what they want when you ask them? What if they can’t imagine outside of their experience the possibilities which might be? Borrowing a well-worn Henry Ford quotation, if he’d asked the market what it wanted back in the late 19th century he’d probably have had ‘faster horses’ as a response. There’s a challenge – and an opportunity – around stretching the customer’s imagination, offering something completely new. Get that wrong and you have the kind of wacky invention which makes up some of the wonderful exhibits in the Museum of Failure, Samuel West’s monument to failure in innovation. But get it right and you bring new categories of product or service experience to the world, from smart phones through to intelligent mobility to personalised helathcare.

And there’s the second risk around asking the market – what of you ask the wrong customers? Clayton Christensen’s famous studies of disruptive innovation sowed that when industries like steelmaking, earthmoving equipment or computer storage were disrupted it was not because the incumbents had paid too little attention to their markets. Instead it was that they were too good at listening to their customers and innovating within that envelope of user needs. The trouble was that the new market emerging at the periphery wanted something completely different and was developing in spite of, not because of the actions of incumbents.

This theme of not listening to customers isn’t new – but it was brought nicely into focus by Roberto Vergantii in his keynote speech at the recent ISPIM conference in Stockholm.   Drawing on his excellent book, ‘Overcrowded’, he suggests that part of today’s problem is not someone having a light bulb moment, it’s that we’re at risk of being blinded by so many bulbs flashing on at the same time. The challenge in a world awash with ideas its to find those which are distinctive, which create the new possibilities. His recipe is based on a mixture of three ingredients – love, principles and process.

‘Love’ is certainly not what you’d normally expect a business school academic to major in. But his point is that organizations need to find something which doesn’t simply satisfy their customers, they need to create something meaningful in their lives. Pushed to the limit it’s a world in which people don’t simply use their toaster, their shower, their air conditioning system – they love it, couldn’t live without it. The (not insignificant) challenge is how to create meaning in innovative ideas?

This brings in his ‘principles’ dimension – and in particular he suggests that even the best of methods for improving the user experience may have limitations. Instead of working ‘outside in’ he argues for a kind of ‘passion push’, finding something which excites and working out from that. This is, of course, the world of the designer and of the methods and skills with which great design pushes the frontiers of what we expect. Whether it is Steve Jobs passion for the hand-held computing devices we now are so reluctant to let go of, or the design team at Bang and Olufsen whose work found its way into New York’s Museum of Modern Art they use approaches which push new concepts, stretch our imagination. Principle #1.

Principle #2 is all about challenge, iconoclasm, breaking the mould, creative conflict. It’s something we’ve known about for a long time in creativity research – sometimes the most exciting innovations emerge not from a harmonious brainstorming session where everyone says ‘yes…and’ but rather from challenging critique and conflict. Ed Catmull’s description of how Pixar learned to make wonderful movies is a testament to this kind of approach.

Innovation is all about repeating the trick – anyone gets lucky once but coming up with a continuing stream of them depends on putting some kind of process in place and then continuously updating and improving that model. So Verganti’s third principle is to embed these core principles into a disciplined methodology. Not surprisingly this has a lot in common with good design methodology, building from ‘envisioning’ through various interactive experimental cycles to create a product/service which carries meaning for its end users.

It’s a process which begins with an individual and gradually swells its population, building and engaging a number of players in a widening network. Along the way he introduces some helpful devices – ‘the meaning factory’ where ideas are subjected to constructive criticism, polishing and revising, pivoting them in the same way as Pixar use to get to the magic stories which they tell. And ‘the interpreter’s lab’ where outsiders add their critical voices, joining in the process of co-creation.

What are we to make of this provocative book and the kind of energising and challenging keynote which Roberto gave? First it reminds us that innovation is about balance – for decades economists argued about whether ‘pull’ or ‘push’ were more important sources in driving the innovation agenda. The weary conclusion is, of course, that both matter – we need to get close to customers and work with their needs, using that information to shape the creation of things people need. But we also need to mobilise knowledge push to propel us and them further along the road, opening up new possibilities, expanding innovation space. And in an era when there is so much focus on user experience and needs it’s refreshing to be reminded of the push side of the equation.

Although never as fashionable as his international marketing colleagues might have been the quality research Noriaki Kano developed a simple and powerful model which pulls this into shape. His model looks at customer satisfaction as something which can be achieved at a basic level – satisfying (or not) the basic needs. But beyond that there is scope for surprising, exciting and delighting them – essentially the meaning which Verganti is talking about.

Push or pull – or maybe there is a point, perhaps, where these two fields might be converging. Much of the recent research around ‘free innovation’ has looked at a group of user-innovators who are very much self-centred in their innovation drive. Whether farmers or programmers or patients suffering from chronic diseases their motivation is simple – they have a problem which they want to solve. They aren’t in the game of creating new businesses, but their ideas and prototypes could form the basis of significant market development if they can be coupled with the skills and methods of experience organizations. They are quintessentially ‘passion driven’ in Verganti’s terms and this drive often makes them improvise, challenge, modify and otherwise explore radically different avenues which have meaning for them. So there may be another part of the process which is not just about mobilising design thinking and skills but also finding and working with this community.

And this raises another question about where this might happen. What are the equivalents of Verganti’s ‘labs’ – the places/spaces where shared exploration can happen and lead to the co-creation of radical solutions? One of the intriguing features about todays ‘fashion wave’ of companies and institutions setting up their own version of ‘labs’ is that at least some of these are conceived of as experimental facilities, places where failure is OK as long as it offers a route towards something interesting and different.

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