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Warning: Listening to the market can kill innovation (81)

Cool for cool's sake is not enough

I recently had the honour to participate in a fast-track innovation management course from a prestigious university. This course included many topics: portfolio management, innovation strategy and human factors for innovation, among others. A strong theme throughout the course was to listen to the most important stakeholder: the paying customer.

There is much wisdom in this statement when addressed to engineers. Being an engineer by education, I can tell you that engineers see their projects as a craft they take pride in - not a money maker. Consequently, new features are prioritized on the basis of a "cool" factor. The end result of this philosophy is over-engineering, where teams spend lots of energy and time on solving the wrong problems in a wrong way.

Think for example a slightly faster train which costs 10 times the expected cost and consumes more power. The technology involved might be breathtaking and involve new materials, propulsion and processes but there is little chance somebody is going to use all this hard work.  

Client driven innovation as panacea

So, what's the alternative? The sharp dressed folks at business schools and the common sense of our age would say to stop trying to guess what the market wants. Instead find out what the purchasing customers want. Take feedback, involve the customer in the design process and tests assumptions frequently. This way you make sure you invest your resources where it matters most.

A classic example here is all the software companies and especially, big tech. The Software as a Service (SaaS) idea is perfectly suited for this. Constant, agile, small releases with a clear way to tell if the update helped the bottom line or not. Sometimes even testing multiple features against each other simultaneously to find out what customers engage more with (A/B testing). Compared to the old monolith model, where production equals to making a bet on what people will like, spending all the effort to develop it and then pray, client driven innovation seems to offer some control over the process.

Customers don't always know what they want

There is no question that client driven innovation can be profitable within the coordinates of our market driven system. But is it really "innovation"? I claim, categorically NO.

First of all, all the classic business prophets that we now celebrate as innovative were absolutely not thinking like this. Steve jobs pushed for many of Apple's most innovative products totally against the current (ipod, AirPort, iphone,...). Clients and even his own engineers expected these to be niche products. The same applies to Henry Ford, who is quoted as having said "If I asked people what they want, they would have told me faster horses". People do not always know what they want and can hardly imagine something radically different.

Perhaps then, the answer is not to ask people what they want, but go deeper and ask why? This is exactly the type of thinking that has led to the mediocre results of our age. Think of a thermostat app that doesn't let you directly set your schedule, but rather asks "helpful" questions such as when you go to bed and if you work from home. Or the tons of "smart" items made because people "do not like wasting time doing chores". It is quite easy to end up again in a self-reinforced game of poor interpretation with the side effect of making sure all innovation is just incremental.

Why do humans innovate?

The only true way to get out of this deadlock is to go back to the drawing board. Why do we even innovate? It's here were the shunned engineers actually hold more truth than the shiny business people - it's because it's fun solving problems and in fact when inspiration knocks on the door we are almost compelled to act.

Visionaries have a way of seeing a future the rest of us cannot. We get inspired by random things and when a mistake has happened or two previously unconnected worlds merge, true innovation springs. True innovation thus is more like a garden than a field - we have to ensure the right conditions and let the people that want to work on a topic solve the problems themselves, including all factors (budget, market fit etc.). This is how you get space programmes and ipods and not iPhones 15. And for a more practical piece of advice, a healthy mix of incremental/client driven research and big bets is the best way forward.


 

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