It’s a paradox of the information age. The glut of information that bombards us daily too frequently obscures true insight. Intelligence should drive better innovation, but unless it is strategically collected and used, it functions like a summer beach novel — an engaging distraction.
Thoughtful companies intertwine customer intelligence throughout the three phases that characterize most successful innovations. Innovation starts with discovery — where an innovator pinpoints an important problem to solve. Ground-level intelligence is critical to this part of the process.
While companies are increasingly using detailed analytics to fine-tune pricing, packaging, and product performance, analytics have their limits when it comes to finding the next big idea. After all, data only exists about the past — discovering untapped opportunities typically requires a heavy dose of primary research to tease out what the customer needs but cannot easily articulate. Consumers don’t do a good job reporting what they currently want or do, let along what they might want or will do in the future.
Procter & Gamble is famous for its deep commitment to these kinds of anthropological approaches. For example, in the early 2000s, P&G investigated the cleaning habits of Indian consumers who washed garments by hand. At first glance that’s a counterintuitive place to look for new growth, because those consumers are unlikely to buy P&G detergents formulated for washing machines. But since hand washers constitute 80% of the home-based washing market in India, it was too big a market to ignore. P&G observed that many consumers were in fact hand washing garments using machine-oriented detergents to take advantage of their superior cleaning benefits. However, the chemical formulations weren’t intended for hand washing and could cause abrasions or burns.
Insight in hand, innovators next blueprint a solution to address the identified problem. In the case of P&G in India, the idea the company ultimately commercialized was Tide Naturals, a special formulation that lets hand washers get the cleaning benefit of Tide without suffering the downsides of machine detergents.
There are substantial opportunities to generate real-time intelligence by involving customers in the blueprinting process. For example, four years ago the Indian company Godrej & Boyce was working on an idea for a small, battery-powered refrigerator to reach the 80% of Indians without refrigerators. The team working on the idea brought an early prototype of the concept to a rural village and showed it to 600 women. Navroze Godrej, who leads the company’s disruptive growth efforts, describes how the event was a way to get “instant feedback” allowing Godrej to “co-create with these women. It was also here that the final color we went with — ruby red — was decided pretty unanimously with 600 women.”
Read the rest at Scott’s Harvard Business Review
Scott D. Anthony is managing director of Innosight Asia-Pacific.
2 comments on “Turning Customer Intelligence into Innovation”
They say you have to think outside the box to innovate… but then, there are thousands of boxes with various sizes that you get lost among a pile and sometimes, the better way to do things is to start – minus the box. I love that you wrote: Innovation starts with discovery.. I just wonder if anyone can replicate P&G’s phenomenal success because I think it’s highly.. unlikely.
In response to the article “Turning Customer Intelligence Into Innovation” and Mr. Shah’s comments, I think that companies can replicate P & G’s success in using open innovation if they develop clear innovation objectives and align IT systems and human resources with their strategy.
P & G serves as an OI model and uses its global reach to solicit, capture and develop new product innovation from outside parties. Companies in various industries are finding success in deploying both evolutionary (incremental)and revolutionary (radical) innovation by using new software and proven methods to signal, capture, filter and develop ideas from outside parties to solve internal problems and innovate new products.