What is best practice in innovation?

Clients sometimes ask whether it is right that their R&D department/proposition development team are working on new ideas in the lab or on the spreadsheet, with a view to them later being applied to a customer problem and offered for sale. Or should we, they say, start instead with what our customers are telling us?

My answer is that it is best practice, where possible, to do both.

Customers don't always know what they want or need, so your organisation which has expertise in the market, needs to be able to provide inspirational solutions to customer problems.

Having said this, it is easy to see how technologies developed in your labs - at some distance from customers – may not emerge in such a form that they exactly solve a current customer problem or need.

That's why we need to have a customer focus too. In effect, we need to approach innovation from both ends - developing technologies and also listening to customers.

Customer insight is key. Indeed, it can bring the customer needs and the technology together.

What do we mean by customer insight?

My view is that insight is not interchangeable with customer research. In general, research is a rear mirror view. We learn what customers have done and have wanted in the past. (This can be useful for managing your current business.)

Insight, by contrast is forward looking - and therefore more useful for innovation. Instead of just playing back what has gone before, insight is a process where different pieces of data are combined in different ways to reveal new business opportunities based on unmet needs.

Insight is crucial to the innovation process. Our definition of insight –“a customer need in a particular context, which reveals a business opportunity” - gives some indication why.

Customer needs at the highest level are quite stable over time – customers need to eat, to drink, to travel etc. When the context changes though, customers' needs will also change - thus there is an opportunity to innovate - to better meet customers' needs.

The context can change in many ways. The checklist of the PEST analysis from marketing planning is a good starting point. Customer needs can be greatly affected by changes in Political, Economic, Social and Technological changes.

 A current example:

The context of buying food has changed recently in several ways - economically - with prices rising and politically - with concern about food safety and animal welfare.

Within this new context, the customer need is for ‘safe and cheaper food’. This is an insight - and as is often the case - once you have an insight - you can immediately see some marketing opportunities. With a little bit more work, you can have a whole funnel full of NPD ideas.

From this one insight - many companies can benefit. Some are already benefiting - either by design - they got that insight some time ago – and designed a response. Or, as sometimes happens, they worked it out retrospectively, after feeling the effects of the change of context – in the form of changed levels of demand for their products.

Some recent data shows changes related to the insight about the need for cheaper and safer food:-

Sales of vegetable seeds in the UK are up +31% year on year (1). At the same time sales of flower seeds are down -32% year on year (1). This would seem to show that gardeners are switching from growing flowers to growing vegetables.

Also, there has been a rapid growth in keeping chickens in the UK. Estimates indicate that up to 500,000 households are now engaged in this activity (2).

Of course in order to get the maximum business benefit, you need to drive your business forward by using insight. So how do you get insights?

Researchers have identified a particular spot in the human brain – the anterior superior temporal gyrus which is responsible for getting to insights. This part of the brain makes the new connections between new and old pieces of data. A process that leads to insights, sometimes called 'aha moments'.

Flashes of insight do come to humans naturally, but it may take some time. In order to ensure efficient use of the innovation team's time – we suggest using a process to get to insight. Anatellô offers  insight processes to clients - which come with a powerful guarantee. We will help you get to new insights in your sector - or you get your money back!

(1) Source: Horticultural Trades Association 2007

(2) http://www.dailymail.co.uk/femail/article-1024291/The-latest-way-save-supermarket-bills-Keep-hens.html