Should you innovate with your customers? (part 1)
Listening can be very valuable, but customers don't always know what they want or what is possible.
To what extent should innovators listen to customers' ideas and suggestions? There are proponents and opponents of involving customers in innovation endeavours. In the first of this two-part series, we'll hear from each camp and explore different situations that may influence their arguments. The second part will propose some possible solutions to reconcile the different views.
The Pro camp: "More than 50% of innovation comes from the voice of the customer," says Lou Rossi, chief commercial officer at the marketing and advertising group Publicis. If he's right, we'd better embrace our customers' ideas and feedback, which is what they do at Stew Leonard's and Ingersoll Rand.
Stew Leonard's is a family-owned US chain of experiential farm-fresh grocery stores. From its early days, it has involved customers it its efforts to make its stores better. Customer suggestion boxes are filled to the brim every day. Some customers even volunteer their Saturday afternoons to participate in focus groups.
"It's all about listening to the customers and doing what they say," the owners have said. "We give customers what they want. They see that we act upon their ideas, and they tell their friends about it."
Involving customers also seems to work well for initiatives to upgrade existing products and services. Some years ago, a leading tool distributor challenged Ingersoll Rand, an American industrial tool maker, to develop a more innovative grinder within a year -- or the distributor would sign up a competitor.
The Ingersoll Rand team visited end-users to observe first-hand how they interacted with their tools. To their surprise, the workers looked like medieval warriors. They were wearing body armour and helmets to protect their upper body and had wrapped tape around their hands to prevent their fingers from accidentally slipping onto a grinding surface spinning at 7,000 rpm.
These "real customers", as opposed to the corporate purchasers of the tool, had to hold it for eight hours each workday. The team realised that the decisive criterion for whether to include a new idea in the final product was: "Does this feature make end users' lives better?"
The Con side: "If I had asked people what they wanted, they would have said faster horses," Henry Ford famously said. The inventor of the moving assembly line rightly highlights that when you ask customers, they tend to suggest ideas that reflect their current needs and what they feel comfortable with, and rarely constitute more radical departures from the status quo.
But as the anonymous quote goes: "True innovation is coming up with a product that the customer didn't even know they needed."
People who hold his view maintain that customers often lack intimate knowledge of what is technologically possible and feasible.
"How can I possibly ask someone what a graphics-based computer ought to be when they have no idea what a graphics-based computer is? No one has ever seen one before," argued Steve Jobs.
Jobs further explained why customer input would not be useful when developing a disruptive "new to the world" tech product (such as the iPod, the iPhone or the iMac): "We have a lot of customers, and we have a lot of research into our installed base. We also watch industry trends pretty carefully. But in the end, for something that complicated, it's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them."
Sony founder Akio Morito expressed a very similar idea in his autobiography Made in Japan: "The public does not know what is possible, but we do. So instead of doing a lot of market research, we refine our thinking on a product and its use and try to create a market for it by educating and communicating with the public. Sometimes a product idea strikes me as a natural. As an example, I can cite a product that surely everybody knows of, the Walkman."
Others who argue against listening too much to customers' ideas say they may have unrealistically high expectations of what they want or need. Or they may be satisfied with a solution that is inadequate given what is already possible.
Customers fall into a wide spectrum. The few you survey, interview or invite to a focus group may not be a representative sample of your "average customer". You may end up with products that please a few but ignore the needs of he many.
Involving customers in developing a "new to the world" product also comes with real business risk. Someone could intentionally or inadvertently leak information, undermining your efforts to preserve secrecy and the competitive edge of the new product might offer.
In short, there seems to be more than one truth. Both sides seem to have good arguments and success cases. So which side is right? And how can the different views be reconciled? In the next column we'll consider different situations that may tip the balance to one side or the other.
Dr Detlef Reis is the founding director and chief ideator of Thinkergy, the "Know how to Wow" Innovation Company in Asia and beyond. He is also an assistant professor at the Institute for Knowledge & Innovation -- Southeast Asia at Bangkok University, and an adjunct associate professor at the Hong Kong Baptist University.