Something really new: a practical, implementable approach to innovation
Vice President and Chief Innovation Officer
Thomson Reuters Global Resources
July 2008
Business today requires a practical approach to innovation. If you want strong sustainable growth and real competitive advantage, you need something that brings value to customers by making their life easier, freeing up their time, or reducing their costs.
There are two things that everyone knows are absolutely true about business today:
- You must innovate
- Innovation begins with understanding your customers
Okay! Now let's go execute on that plan!
Except, of course, you can not execute on that plan. You have to go a bit further than that to have a practical, implementable approach to innovation. I will try to set out below some of the basic outlines of such a plan. This is not a silver bullet but I believe it will improve your innovation efforts quickly and measurably, and encourage your organization to go further than you thought possible.
Let us begin with innovation itself. It is not novelty. Hula Hoops, Pet Rocks etc take off once a generation and they are gone in two years. You can make a buck on fads — and if you keep betting on the lottery you may also eventually win. But if you want strong sustainable growth and real competitive advantage, you need something that brings value to customers.
Beauty and utility
There are really two types of things that people value by paying for them: Beauty and Utility. Unless you are in the home décor or entertainment business, what you are really selling at the end of the day is Utility. You can dress it up as much as you want, but in the final analysis your customer is saying "Will this make my life easier, or free up time, or reduce my costs?"
So, Novelty's twin brother "Cool" is out as well. For the merely cool does not make life simpler. It only provides a moment of awe. That's not a long-term value proposition.
Our focus, then, is on the useful, and to discover the useful we must go through one tricky moment. We have to distinguish between our product's Function and our customer's Task. Mere philosophy, you say? Not so. It is the heart of the matter.
Let's look at faucets
How many do you have in your home? Count the laundry room, the yard, the one at the bottom of the hot water heater and so forth. You may have 10 or more. Faucets are 4000 years old. They work very well after all those millennia of design improvement. Or do they?
Well, from the perspective of the company that makes and sells faucets, they are near perfection. Turn a handle and the water flows. Washers used to be a major problem, but not so much anymore. The design now includes the ability to blend hot and cold water with one handle and use that same handle to adjust the temperature. Who could ask for more?
The customer could. Because the customer assumes that the function is fine. It's a given. The customer is focused on Task. The customer's goal is not to make water flow at a given temperature. His or her goal is to wash their hands (or fill a pot, or water a geranium). And faucets do not always work so well from that perspective.
When you wash your hands your task is to get them clean (duh!). So you put your dirty hands on the handle, play around for the right temperature, wash your hands and then touch the dirty handle again. A good faucet would make that task simpler and actually achieve the goal of clean hands. Doctors use a foot pedal with a preset temperature. That saves several steps and makes the cleaning more effective as well.
So here are two important points:
- Understand the customer's task, not your function.
- Help the customer complete that task with less work and/or lower cost.
Count
If you have the first point right, then the next point is even simpler: Count. Walk through your customer's task and write down each step. A step has one verb and one noun. Here's an example for dialing a phone:
- Obtain number
- Take phone
- Enter number
- Press "dial"
Now, take those steps and reduce them.
- Take phone
- Say "Call John"
Every step you take out reduces time and/or expense.
There's much more to this. Importantly there is the subject of linking services (for instance, your hotel provides you with your boarding pass for the next day). But space is limited so I will leave you with one final suggestion:
Never accept the notion that a product is a commodity and all innovation is over. Bread is the oldest product on Earth, going back over 7000 years. But sliced bread didn't happen until 1928. Water has been around forever. But the product "Fortified water" dates back to the late 1990's. Sales last year in that category exceeded two billion dollars.
There is always room for innovation.
About the author
Denis Hauptly is Vice President and Chief Innovation Officer of Thomson Reuters Global Resources. His new book, Something Really New: Three Simple Steps to Creating Truly Innovative Products examines the process of identifying product innovation potential. You can contact him via email at: denis.hauptly@thomsonreuters.com
