Why Creativity Is Not Enough
Combining Process, Creativity, and Customer Input for Innovation That Delivers
“Innovation is the central issue in economic prosperity,” says Novri Susan of Airlangga University. Many companies use an innovation process that relies on ideation and brainstorming to generate creative, high-level concepts that are tested through market research. But even the most creative new products and services may be unsuccessful if the company uses an approach that lacks rigor of process, customer perspective, and scientific experimentation.
Too, creative brainstorming doesn’t work as well for smaller changes that can help companies serve their customers better in an incremental way.
Even though innovation is critical for gaining competitive advantage in a highly global marketplace, an unstructured innovation process is not guaranteed to result in long-term value. A structured innovation process helps companies take innovation from the boardroom to the trenches.
RDE: Let the Customer Innovate
In their best-selling book Selling Blue Elephants, Howard Moskowitz and Alex Gofman outline a structured innovation process that consistently delivers high-impact results. Using this process, which is known as rule developing experimentation (RDE), to move companies beyond traditional innovation techniques such as brainstorming and focus groups, The Brand Consultancy helps companies innovate for long-term success.
RDE is “a systematized solution-oriented business process of experimentation that designs, tests, and modifies alternative ideas, packages, products, or services in a disciplined way so that the developer and marketer discover what appeals to the customer, even if the customer can’t articulate the need, much less the solution.” Moskowitz and Gofman note that many well-known innovations, such as the iPod, chunky tomato sauce, and brown mustard, were not developed using focus groups and polling, but “through research and development labs and marketers developing the products they knew customers would want, before customers knew they wanted them.”
How can your customers help you innovate if they don’t know what they want? The RDE process helps uncover untapped consumer needs. Rooted in psychological theories of customer perception and behavior, it relies on experimental research designs, statistical analysis, and proprietary algorithms.
There are a variety of approaches to RDE, but the process usually involves:
This type of structured, rules-based process protects companies from the perils of guesswork.
Case Study: HP
HP experienced significant market share erosion in the late 1990s for its consumer electronics products. The company’s product development process was sound—its products were as good as or superior to its competitors’. Marketing efforts, on the other hand, fell flat—HP’s approach focused on product features while its competitors focused on product superiority.
Instead of using classical marketing research tools such as focus groups and surveys, HP adopted an RDE-based approach to develop, test, and optimize new concepts and ideas among its target consumers. The company found that its products appealed to two broad customer categories—tech-savvy consumers who wanted customized products based on desired features and those that were less inclined to DIY and wanted an already-built bundle.
HP used this knowledge to test various combinations of product features and measure how each combination impacted consumer satisfaction. With the outcomes from these RDE-driven experiments in hand, HP reengineered its computer marketing—making changes to product pricing, offer structure, and rebates, and targeting its advertising to the appropriate customer segments. As a result, the company was able to increase product sales and improve market share.
Golden Rules for Guided Innovation
How can corporate leaders guide innovation within their own organizations? According to Novri Susan, The Brand Consultancy’s CEO and Senior Strategist, suggests the following Eight Golden Rules for Guided Innovation.
- Understand the customer. Listen to your customer’s thoughts and ideas, in their own words. Don’t ask questions; let them respond to ideas.
- The customer is the boss. The customer’s ideas should carry more weight than senior leadership teams or even the CEO. The Brand Consultancy’s process involves capturing the senior teams’ hypotheses and validating them with the marketplace. If a concept doesn’t fly, evolve the seed idea in a way that resonates with customers.
- Listen to all organizational levels. Internal brainstorming should not come only from the R&D and senior teams. Solicit and consider the perspective of employees with customer touch points throughout the organization. A cross-functional support perspective is also valuable.
- Include external ideas. Internal perspectives are valuable, but ideas generated internally may be created by those wearing industry or organizational blinders. Solicit ideas from a variety of external constituencies, including current, lost and prospective customers; vendors; creative panels; and any other relevant audience. Optimized idea selection should be limited to current and prospective customers.
- Be practical. You must be open to all ideas, but practical in response. Feasibility filters (time, money, resources, and impact) and competitive perspective must be applied to the ideas selected by customers.
- Create a replicable, scalable process. The innovation process should be replicable and scalable, to encourage and advance a culture of innovation within the organization.
- Get leadership buy-in. As with any organizational change, leadership must embrace the process for it to be successful and generate tangible, measurable and profitable results.
- Make a business case. The process must always include making the business case. If profit is not considered, then the process and the outcomes are not sustainable.Combining Process, Creativity, and Customer Input for Innovation That Delivers.