Product innovation

Understanding and Building Innovation Through Consumer Preferences

Innovation is the backbone of any successful business. It's not just about introducing something new but creating solutions that resonate with customer needs and anticipate future demands. Innovation can be:

• Approachable: Accessible for all to understand and utilise.
• Doable: Achievable within the given resources and constraints.
• Feasible: Practical and realistic to implement.
• Practicable: Usable and applicable in real-world scenarios.

Anyone can innovate, but the key lies in understanding its principles and aligning them with customer-centric strategies.

A Forward-Looking Approach to Innovation

True innovation focuses on future possibilities rather than relying on outdated assumptions. It should anticipate disruptive changes and proactively address challenges that customers may face in the years to come.

Design Thinking: Solving Tomorrow’s Problems Today

Design Thinking emphasises understanding future customer problems and providing solutions before they become widespread issues.

Examples of Innovations Over Time

1. Evolution of Television

• 1900: The introduction of the radio amazed people with audio transmission.
• 1920s: Black-and-white televisions became household staples, evolving into colour CRT televisions.
• 21st century: Innovations like Plasma TVs, LED, and OLED screens revolutionised the viewing experience.

2. Transformation of Telecommunication

• 1990s: Telephones were basic and used solely for calls.
• 2002: Mobile phones introduced cameras, adding multimedia capabilities.
• 2008 onwards: Smartphones, led by brands like Apple, became all-in-one devices for communication, entertainment, and productivity.

These advancements illustrate how technology adapts to and shapes consumer needs over time.

Current Disruptions in Technology

1. Software Innovations
   Companies like Amazon, Uber, and Spotify revolutionised industries by focusing on user convenience and solving pain points, such as accessibility and affordability.
2. 3D Printing
   3D printing is transforming industries, from construction (building 10 structures in 10 days) to healthcare and automotive manufacturing. It enables rapid prototyping and customisation at unprecedented speeds.
3. Driverless Vehicles
   Tesla and Google have introduced autonomous vehicles, shifting the competition from traditional automakers to tech companies.
4. Agricultural Robotics
   Innovations in robotics may lead to autonomous farming, enabling efficiency and productivity while addressing labour shortages.

Steps to Drive Innovation

To introduce innovative products, businesses can follow these steps:

1. Identify Customer Needs
   Focus on understanding what your customers want now and in the future.
2. Develop a Pipeline of Ideas
   Gather potential ideas from teams, customers, and market insights.
3. Conduct Experiments
   Test ideas on a small scale to validate their feasibility.
4. Commercialisation
   Bring validated ideas to the market.
5. Continuous Improvement
   Refine and evolve products based on customer feedback and market trends.

Customer Centricity as the Core of Innovation

Technology is merely a tool for disruption; the real driver is a deep understanding of customer needs.

Examples of Customer-Centric Innovations

• Ride-Sharing: Uber and other platforms were born from limited taxi availability and pricing issues.
• Music Streaming: Services like Spotify arose from the inconvenience of purchasing entire albums for a single song.
• E-Commerce: Platforms such as Amazon addressed poor customer service and accessibility in traditional retail.

To align with customer needs:

• Analyse customer data for patterns and insights.
• Engage with customers through surveys, interviews, and feedback sessions.
• Monitor competitors to identify gaps in the market.

Framework for Executing Innovation

1. Anticipate Customer Shifts
Predict changes in buying behaviour over the next five years to stay ahead of the curve. For example, electric vehicles are gaining traction as sustainability becomes a priority.

2. Generate Promising Ideas
Develop a list of potential solutions and opportunities. For instance, the rise in remote work creates opportunities for innovative home office solutions.

3. Focus on Low-Hanging Fruits
Identify and implement a few ideas that offer quick wins and immediate impact, ensuring team alignment with customer-centric goals.

4. Build a Solution Architecture
Plan the execution roadmap, from development to market launch, considering resources and timelines.

5. Address the 5Ps

• Product: Define changes to enhance quality or user experience.
• People: Identify skills and leadership required for execution.
• Price: Determine a pricing strategy that reflects value while remaining competitive.
• Promotion: Use targeted campaigns and pilot tests to gauge market reception.
• Process: Streamline distribution and sales channels to maximise reach.

Reverse Innovation: Solving Needs First

Reverse innovation prioritises identifying customer needs before developing products. Many businesses fail by creating solutions first and then searching for a market. Avoid this mistake by grounding your strategy in customer insights.

Key Takeaway: Customer needs should always serve as the foundation for innovation, ensuring your products remain relevant and valuable.

By adhering to these principles and frameworks, businesses can not only introduce impactful innovations but also build sustainable growth strategies that align with evolving customer demands.