5 Reasons Brands Fail At Innovation

The customer is always right. Especially when it comes to innovation. Whether they know it or not, customers have the answers for where the next big breakthrough will be.

The problem is that customers are notoriously bad at imagining the product that solves their problems and conceptualizing how they would interact with true breakthrough solutions. As Henry Ford reputedly put it, “If I’d asked people what they wanted, they would have said faster horses.” The trick is figuring out how to unlock the right information that can get you to the winning solution without relying solely on asking people what they want. This critical step is where many innovation efforts fail.

When the failures occur, it’s not for a lack of effort. Companies often invest heavily to understand the so-called voice of the customer. They may gather overwhelming amounts of data around current and potential customer behavior, opinions, and attitudes. Problems arise when these organizations try to figure out what to do with all the information; they lack a structured way of determining what’s important and what’s not. This makes it difficult to figure out the right direction to take.

And that sad picture describes some of the more customer-centric organizations out there. More commonly, we find companies relying heavily on very short customer satisfaction surveys and highly circumscribed concept tests. These instruments have their place, but they offer little or no insight into the fundamental drivers of demand, what might cause customer preferences to shift, or where an industry should head. By looking with myopic intensity at data that is very easy to collect, companies can miss critical elements of the whole picture and cast their efforts in fundamentally wrong directions.

Even when it comes to new products, which seem straightforward to research, companies’ track records are dire:

• More than 50 percent of newly launched products fall short of the company’s projected expectations.
• Only 1 in 100 new products covers its development costs.
• Only 1 in 300 new products has a significant impact on customer purchase behavior, the product category, or the company’s growth trajectory.

Fortunately, the Jobs Roadmap provides a systematic way to beat the odds. Many new product failures can be avoided simply by understanding what jobs customers want to get done. Rather than leaping to foist a solution on the market, companies need to step back, listen to and observe real and potential customers (including how they react to early prototypes), and then hone in on strategic opportunity areas that show promise for growth.

Doing It Right

Making the innovation process work doesn’t require lashes of genius, nor does it depend on glamorous ideas. By looking intently at customers in the strategic context of the company, great ideas can emerge from simple insights that are easy to act upon.

Consider the story of Uber, an on-demand car service that gets you an affordable ride within minutes. The idea isn’t revolutionary. Taxis and car services have been around for a long time. In shaking up the taxi industry, part of what Uber brought to the table was a more cost-effective business model. By being a coordinator for drivers who had their own cars, Uber could substantially reduce its up- front costs by avoiding the need to pay for cars and medallions. But simply starting a price war by introducing a lower-cost model wouldn’t have been enough to steer people away from traditional taxis. Large incumbents—even in relatively low-margin industries—usually have the resources to weather the storm, even if things are a bit uncomfortable for a while.

The key to Uber’s success is that its efforts rely on Jobs-based principles. It’s almost impossible to list all of the pain points associated with traditional taxis: Long waits while trying to find an empty cab, unfriendly drivers using every trick they know to drive up the fare, and “broken” credit card readers that force you to pay with cash are just a few of the difficulties. Uber’s founders saw the problems that customers were facing and set out to offer a better alternative. Starting from the ground up, they produced a solution that would solve the most important jobs and alleviate as many frustrations as possible. The app’s interface allows you to summon a car on demand and know exactly when it will arrive. The interface provides fare quotes in advance, and back-end staffers will refund fare overages when drivers take overly long routes. Every ride is charged to a credit card on file, eliminating the need to deal with cash. Beyond eliminating a number of important pain points, Uber focused on emotional jobs that the taxi industry had ignored, offering a sense of certainty and control that you simply don’t have as you stand out in the cold waving at passing lashes of yellow or sit in the back of a cab endlessly watching the fare tick up on the meter. By focusing on fundamental jobs and taking a customer-centric perspective, Uber has grown to a $50 billion valuation in a little over five years.

5 Things That Leads Companies Astray

If the route to success is straightforward, why is it so uncommon? Here are five reasons why smart companies go astray.

First, doing things right requires a modest up-front investment of time. In typical corporate life, none of that is available. For example, back in 1999 one colleague had the privilege of leading a team responsible for creating one of the first smartphones ever. Until he pushed back hard, he was given a whole two weeks from the project’s inception to develop the specification for what would be in that device. Really.

Second, following the Jobs Roadmap entails following the Jobs Roadmap also entails asking difficult questions, many of which you’ll struggle to answer. his is not the sort of behavior that’s re- warded in most organizations. We are trained to be solution finders, from early schooling through to our annual employment reviews. Asking awkward questions can elicit equally awkward pauses, when people fumble for smart-sounding answers. You will need to get comfortable with the unknown. In tough questions lies great opportunity. Albert Einstein once said, “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.” Once you frame a problem very well, the answers can be rather obvious.

Third, market researchers and product developers can focus too heavily on the superficial questions—probing into whether customers like this or that better. They worry that if they delve too deeply into behavioral drivers, customers will come up with rationalizations that don’t ultimately reflect their decision-making process when it comes time to make a purchase. A benefit of the Jobs Roadmap is that it allows you to target and understand discrete pieces of why customers act as they do, getting at the real root causes of behavior first and then becoming progressively more specific about the ramifications for the innovation.

Fourth, managers seek data to justify their conclusions, and data is rarely readily available about Jobs to be Done. Data can be produced reasonably quickly and inexpensively through primary re- search and test-and-learn experiments, but most companies still lack this information. This state of events is actually a good thing: It means that securing the data creates a true advantage for the company willing to do the work.

Last, and quite critically, we must discuss Clayton Christensen. Clay was the first person to popularize the notion of Jobs to be Done, although he is most famous for his concept of “disruptive innovation.” Aside from Clay’s remarkable brilliance, there is good reason why this one man has produced these two concepts. The disruptive innovation theory holds, in part, that products starting out in small market niches can grow to upend industry giants. Companies already incumbent in an industry tend to ignore these niches, focusing on their business as they’ve traditionally defined it. For interlopers, though, looking at underlying jobs helps determine whether that niche is a dead end or a route to eventual greatness. By targeting an under-addressed job to be done, a disruptive entrant can attack incumbents in asymmetric fashion, building strength in corners of the market that seem uninteresting to the traditional giants. When the giants awaken, it is often too late to fight of the clever entrant. Disruption succeeds when it targets the right jobs to be done.

Contributed to Branding Strategy Insider by Stephen Wunker, excerpted from his new book JOBS TO BE DONE: A Roadmap for Customer-Centered Innovation, with permission from AMACOM publishing.

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