Innovation Failure Points – Inside-Out Innovation

by Jeffrey Phillips

Innovation Failure Points - Inside-Out InnovationIn a continuing series of posts I am examining a number of consistent innovation failure points, under the thinking that learning from failure is much more instructive than learning from success, since often success is situational, while repeated failures can be instructive. In the first two posts, we reviewed failing by starting poorly, and failing by neglecting to closely link innovation to strategy. What I’m interested in is identifying the “weak links” in the innovation process and examining why innovation fails most consistently at these particular points.

Today we’ll consider the weak link of what I like to call “inside out” innovation. This is the presumption that we know what our customers need, and that happens to look a lot like our existing products or services. Too many firms “innovate” with very little information or insight about the market, their customers, or customers’ need or wants. Rather than go out and understand what customers need and expect, they rely on anecdotal evidence and market research, and simply extend existing products and services. This is a failure point of the first order, consistent with running blindly down a path that ends in a cliff.

Too often innovators assume they can ascertain the needs of the market without interacting with customers. What’s really striking is to ask product and service development teams how frequently they meet with customers to LISTEN to their challenges and needs, instead of simply presenting a new product. In the innovation teams where customer insights are used, the team relies on third party research and customer feedback, rather than detailed Voice of the Customer or Ethnography work to uncover unmet or unarticulated needs. Or the team fails to use Needs-based tools like the ones Christensen documented and Strategyn popularized like “jobs to be done” methodologies. Too often innovation teams start generating ideas without understanding the needs and opportunities in the marketplace. Sooner or later an executive is going to want to know what problem is being solved, who has that problem, and whether or not they are willing to adopt your suggested innovation. You’d better have the answers or your innovation won’t move forward.

For some reason we’ve lost, or perhaps never really had, the ability to interact with customers and prospects in a visceral and empathetic way. Even when our product and services teams are informed that customers are angry, frustrated and unhappy with the products and services, we continue to use the same tools and techniques to derive and design new products, assuming the fault lies with the prospects and customers rather than with the fact that we haven’t understood the needs.

What’s the learning? Innovation is about creating something dramatically better or completely new. If you aren’t interacting with customers to understand unarticulated needs or “jobs to be done” then your shiny new product may be interesting, but not valuable to your intended audience. Don’t rely on your own intuition, and don’t rely on third party research. Go find out for yourself, interact with customers in unscripted ways. You may not like what you hear, but you’ll learn far more. Leave the pre-conceived notions at home and deploy qualitative tools like Voice of the Customer or Ethnography. Watch your customer interact with their challenge or problem. The most common response to this kind of research is astonishment in the executive suite.

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Jeffrey PhillipsJeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.

No comments

  1. Hi Jef,

    It was the wonderful article with lot of insight on innovation.

    It is very rightly said that for innovation to really work, and to be sustainable, it has to become a way of life for any organization. To have a seamless innovation organization, leadership should encourage greater cross-functional organizational co-operation to support innovation and permit multiple models of organization from separate Business Lines to cross-functional teams to nurture and implement innovations. In helping teams innovate, external partners including customers, suppliers, alliances, competitors, consultants, academic institutions, venture partners are also all very valuable.

    But most innovation fails during the implementation phase. There are so many hurdles to innovation at implementation range from

    • Projects running over-budget
    • Slow to move from concept to prototype
    • Poor inter department co-operation
    • Lack of effective project management
    • Lack of incentives for innovation

    However work domain, idea duplication, personal biases, egostic issues among leaders, project ownership issuess are also surfaces during the idea implementation. What are your thoughts and how can an organization can deal with these issues?

  2. “Jobs to be done” has been around forever, but expressed differently. In tech, the benefit was always the job enabled or improved by the tech.

    By closely aligning innovation with strategy, you end up violating Christensen’s “Separation” rule. Separation means starting the commercialization of a discontinuous innovation, one without an existing market or category, in a separate organization that does not yet have a cost structure, or policy structure. This separated organization would align strategy with its innovation, but spend a lot of time ensuring their separation from the parent, as in not aligning their strategy with that of the parents.

    Businesses are quick to quote “Jobs to be done,” but have run away from separation, because it violates any notions of economies of scale and synergies, neither of which are relevant with discontinuous innovations. Radical or Disruptive innovations are first discontinuous innovations before their framing by marketing, or success in the marketplace. Until separation is adopted, we will continue to fail to innovate.

    The innovation that matters now is discontinuous innovation, because only it will create new categories, new value chains, new jobs, new wealth in the U.S. Sustaining innovations are fine except that they will not stem the tide of offshored job loss.

  3. Mr Phillips,
    I think this concept of listening and observing should be applied by managers. They should watch and listen to their employees to see where there pain points are. Then ask them how should we make this better. Those front line employees doing the work will create some great innovations.

    Just like listening and observing customers is essential to creating innovations that the market wants.

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