Making the Leap to Disruptive Innovation

Does your organization struggle to innovate on a consistent basis? If so, you may want to get your customers involved.

Innovative companies have always intuitively understood the importance of customer feedback. But now there’s evidence that strongly suggests that direct customer involvement in the new product development process can make a real difference in your ability to innovate.

In a recent study published in the Journal of Product Innovation Management, researchers measured the benefits of user involvement in the product innovation process for future mobile phone services. The study rated three distinct user groups – ordinary users (customers), advanced users (technology and/or computer trained users) and professional product developers (from a leading European telephone company) – to determine their ability to generate ideas for innovative products.

Each group was measured in four areas: originality (newness of an idea), value (extent to which an idea solved a perceived problem), realization (ease of developing an idea into a commercial product), and total number of ideas.

The results may surprise you.

Researchers found that ordinary users not only produced more original new ideas, but their ideas were also rated as significantly more valuable. In contrast, professional developers and advanced users produced the greatest number of realizable ideas, but they were perceived as having less value to customers.

In other words, advanced users and professional developers came up with more ideas that had a good chance of actually making it to market, while customers created more ideas that solved their problems.

Here’s why I think this finding is so important.

From a market leadership standpoint, there are two kinds of innovation – disruptive and incremental. Incremental innovation focuses on making small improvements to existing products and services. It adds a few new bells and whistles here and there, but does not dramatically alter the product or the value it provides the customer.

Incremental innovation generally costs less and is easier to achieve. But it does little in the way of providing real market leadership or a sustainable competitive advantage. Most of what passes for innovation these days is incremental.

Disruptive innovation is far more difficult to achieve. It requires coming up with new products or services that solve customer problems in entirely new and different ways. Often, disruptive innovation solves problems that customers didn’t even know they had or were unable to clearly articulate to themselves or their vendors. With disruptive innovation, the risks are high, but the payoff is enormous.

Why don’t more companies come up with disruptive innovation?

Because most are set up, both structurally and philosophically, to produce incremental innovation. They may seek customer input from time to time. They may scan the environment on occasion to look for new ideas outside their industry. But the fact is that most companies innovate by using internally generated ideas to produce slightly better products. Then they focus on getting those slightly better products to market as quickly and as cost-effectively as possible.

This approach is quicker and cheaper than disruptive innovation. And it feels like you’re making progress. But in the long run, it typically does not generate the results that lead to sustainable market leadership.

Making the leap to disruptive innovation requires a different way of looking at and managing the innovation process. It starts with asking questions like:

• Do we aim for incremental or disruptive innovation?
• Do we rely solely on internal experts for new ideas or do we regularly look outside the company as well?
• Do we know how to suspend our assumptions about what is so and explore new ways of looking at the same things?
• How do we determine the value of new ideas?
• How do we know if a new product will add value to our customers?
• Have we provided the tools and learning necessary to our employees to think differently?
• Do we have a formal process for including customers in our new product development process?
• If not, what would it take to create such a process?
• How do we reward innovation in our company, and what message do we want to send to employees?
• Have we created and sustained the management practices critical for ongoing innovation in how we do things (i.e. we ask about, measure, and track ideas generated, ideas evaluated, and ideas implemented)?

Getting customers involved in the creative/idea generation phase of your innovation process may take longer and cost more. But as the study suggests, it greatly increases the odds of developing successful new products. It also keeps you in touch with the problems and issues your customers face, which can change a lot faster than you think.

So get out there and start talking to your customers. Better yet, invite them into your business and make them part of your new product development process. Your customers represent a bountiful source of new product ideas and the process of engaging them is likely to produce other benefits like stronger working relationships and deeper loyalty as well. What’s holding you back from using them?

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Holly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast, will change your thinking.