5 Steps For Turning Customer Input Into Innovation

by Anthony W. Ulwick, Harvard Business Review

How do you launch a blockbuster product? Stop asking customers what they want. Instead, start asking what they want your products to do for them.

Every company prides itself on giving customers what they ask for

. Healthier fast-food products. Nicotine-free cigarettes. Bigger engines in cars. After all, giving people what they want will guarantee success - or so you would think. Customers often describe the solutions they want in focus groups and surveys and sit back and wait while R&D rolls up its collective sleeves and gets to work on materializing their ideas. How sad it is, then, when the product or service is finally introduced - and the only reaction in the marketplace is a resounding ker-flop.

When you ask customers what they want, they describe solutions - products, features, services. But customers know only what they've experienced. They can't imagine what they don't know about new technologies, materials, etc. So they suggest things other firms already offer prompting "me-too" products or incremental improvements - opening the field for competitors. 

Imagining the unimaginable is for R&D departments, not customers. To fire up your firm's imagination, ask customers for desired outcomes, not solutions. Their answers will transform your innovation from serendipity into rigorous discipline. 

That's how medical-device maker Cordis created the artery stent - which doubled the company's revenue in two years and vaulted its stock price fivefold. Cordis's secret? A new way of listening to customers. And a radical shift from customer-driven to customer-informed innovation. 

Here's the process Cordis used to achieve this remarkable growth:

1. Plan outcome-based customer interviews. To be successful, outcome-based customer interviews must deconstruct, step by step, the underlying process or activity associated with the product or service. Once you define the process, carefully select which customers will participate. It's important to narrow interviewees to specific groups of people directly involved with the product. It's also important to select the most diverse set of individuals within each customer type. The more diverse the group, the more complete the set of unique outcomes that is captured.

2. Capture desired outcomes. This requires a moderator who can distinguish between outcomes and solutions and can weed out vague statements, anecdotes, and other irrelevant comments. The moderator should translate interviewees' solution statements into outcomes - by asking why customers want the stated solutions. Have interviewees discuss each step in using the product - difficulties encountered, ideal scenarios, etc.
3. Organize the outcomes. Once the interviews are complete, researchers make a comprehensive list of the collected outcomes, removing duplicates and categorizing the outcomes into groups that correspond to each step in the process.

4. Rate outcomes' importance and satisfaction. Once you have a categorized list of outcomes, you must conduct a quantitative survey in which the desired outcomes are rated by different types of customers. Survey participants are asked to rate each outcome in terms of its importance and the degree to which the outcome is currently satisfied. The ratings are fed into a mathematical formula, revealing the relative attractiveness of each opportunity.

5. Use outcomes to jump-start innovation. The final step entails using the data to uncover opportunity areas for product development, market segmentation, and better competitive analysis. The data are also used to formulate concepts and to evaluate the potential of alternative concepts.