The first step in meeting customer needs is to understand who your customers are. Demographics, ethnography, and segmentation are table stakes for market planning, but innovative customer experiences go much deeper.
How do they shop and interact with your brand?
What do they think of those interactions?
How do things beyond your control – such as product or service reviews on Yelp – impact their behavior?
Customer research and experience design tools such as journey mapping, persona development, and customer data science are essential to keeping the guesswork out of innovation and building real empathy with your customers.
Because technology saturates our lives, many companies equate “innovation” with simply implementing the latest and greatest technology. Clients frequently tell us, “We need to innovate, so we need a mobile app.” But there are innovation opportunities in many other parts of the business, both from the outside-in and the inside-out.
Thomas Edison said he found 10,000 ways that a light bulb would not work before he found one way that it would. The best innovation approaches embrace failure – that is, what you can learn from failure – as a core value. As you consider bringing innovation methodologies and teams into the business, you want to test and learn as much as you can about your hypotheses.
When it comes to digital transformation, you likely have a list of more things to fix and more ideas to execute upon than you will ever have time, budget, or resources to do. One technique for overcoming the innovator’s dilemma is a model that helps you make good decisions and understand where to focus time and resources. Applying a model called 70/20/10, you start by allocating 70% of your energy, effort, and dollars on the “now,” 20% in the “new,” and 10% in the “next.”
You can’t manage what you can’t measure, and it’s important that your organization stay accountable to the innovation process and to the business outcomes it supports. Aligning for growth, efficiency, and velocity lead the way in defining goals and KPIs, and it’s important to ask yourself tough questions as you deliver on innovation. How is innovation working? Are ideas getting deployed? Are your innovations aligned with the business? Ultimately, are innovations growing sales and customer retention? Are you taking costs out of production and delivery? Did it improve customer time to delivery? How well you measure innovation will ultimately drive positive outcomes for your business.
Flexibility and adaptability apply to more than just your systems. You also have to think flexibly. Corporate culture is shifting to the point that five-year plans are nearly a thing of the past. To be innovative, you have to think about the big picture and think about your customers and competitors. Have a vision that serves as the guide, then select a manageable goal and get started quickly. Experiment. Listen. Be open to challenges. Learn.
The best, most successful companies are built on a culture of innovation. Building a culture of innovation can start from the topdown, but you can also build it team by team, project by project, and innovation by innovation. It’s best when your corporate leadership provides the guiding vision, and then empowers employees to make decisions independently. Innovative teams collaborate and bring in diverse groups of people to gain a variety of perspectives to study problems and come up with solutions.
As you contemplate the habits of successful innovators – connecting with customers, embracing different types of innovation, testing and learning, managing the portfolio, measuring outcomes, being flexible, and building an innovative culture – recognize that these habits need to be built over time. And, it’s essential to find leaders within your organization who recognize the importance of digital transformation and innovative initiatives. According to Forrester, the C-suite needs less convincing about whether or not it should invest in digital transformation. Instead, executives should focus on understanding the urgency of transformation and innovation compared to other business priorities.6 Innovation means having a lot of ideas and turning them into something of value for your customers, something that is useful. When you focus on innovation that ultimately enhances the customer experience, you will be poised for success in a rapidly changing customer-driven world.