Towards the end of April, I read an interesting book titled "Tuned In". The book details a six step process that could be utilized to create break-through product or service experiences that truly reasonates with the user base. Being a Product Manager over the last few years in a high tech firm , the six step process outlined in the book seems very intuitive; however, many companies focus solely on innovation without much regard to whether the innovation really addresses an unresolved business problem. Instead of purely focusing on innovation, companies must concentrate on innovations that reasonate by adopting an "outward-in" approach to any new product or service development initiative.
Another powerful message cited in the book resolves around the notion of listening to customers. Yes, listening to customers is vital; however, true break-through disruptive innovations can only happen by "tuning-in" to prospective/potential customers. This is a truly eye-opening concept. In the book, a break-through disruptive innovation is categoried as something that addresses an unresolved business pain point, a pain point that afflicts a large number of people/organizations.
Why is this an "eye opening" concept? Reason: Listening to existing customers will only lead to small incremental enhancements to your product or service. The existing customer base has already adopted the product and service and in most cases will demand new features/functions that augment the existing functionality leading to small improvements in the product or service over time. But, break-through innovations can mostly be achieved by focusing on prospective/potential users to understand/determine how the product or service can be adapted to address an unresolved business need. Taking an "outward-in" approach towards new product or service design and focussing on different buyer personas within the potential user base will lead to the creation of solutions that provides a cure/panacea for an unsolved business need and as a result the solution will be sought after by a large proportion of the intended user population. By providing a much needed solution to a business problem, the disruptive innovation creates a "win-win" for both the user as well as the vendor. The user benefits since now they have a much needed solution to a problem; whereas, the vendor benefits due to a much bigger revenue opportunity (in any business, the potential/prospective user base usually constitutes the largest portion of the revenue opportunity) and increased customer satisfaction (a key to foster viral adoption).
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Great post Amit.
ReplyDeleteTuning-in is absolutely essential. That said, I think it is a necessary but not sufficient way to innovate. Here's why: we all know that large companies find it hard to innovate since they are too burdened in serving existing customers. Startups naturally address new customers but over 90% of them fail. So there has to be something more to innovation. As Henry Ford said, had he asked his customers what they wanted, they would probably have said "a faster horse and buggy". They wouldn't have asked for a car. The iPod, YouTube, Twitter were all a result of courageous imagination. True innovators dare to imagine and dare to put their work out for everyone to accept / reject. This part is art. This is exactly what an artist does. They go in their studio and imagine a art and express it. The artists who ask their agent or follow a popular trend seldom make their mark in history. Then as the market reacts, good business people put the art on pause and tune-in and adjust the art and adapt to what the market wants rather than what they want. That is where tuning-in comes it. Based on the way you describe tuning-in, it is great for larger companies to help them escape the stranglehold of existing customers. Breakthrough innovations require more. There is a huge academic community that systematically researches this and studies companies like Google, Apple, Genentech vs. others. All three companies although known for innovative products, upon closer scrutiny also put out a lot of failed products. The difference between the innovative companies and others is a culture that allows taking risks but managing them. Checkout books by Clayton Christensen, a book called Blue Ocean Strategy and the book Linchpin by Seth Godin for more information.