The customer anticipation pyramid is key to innovation success. As Wayne Gretsky said " I always skate to where the puck (customer) is going to be, not where it is now". At the bottom of the pyramid is the Henry Ford days. Ford produced the model T primarily in black because the paint dried faster and he could product more cars that way but interestingly when the Model T first came out there were other colors (regressive innovation?). In general though, producing what we want and placing it in inventory is an internal driven closed-loop process without customer input. You could also argue that this goes against current lean principles of customer pull.
Moving to the middle of the pyramid, is the more typical external driven organization whose product development and innovation strategies are based on what the customers "say" they want. While listening to the customer is always encouraged, the customer is frequently absorbed with his own needs and desires and not your profitability. Does the customer driven innovation lead to sustainable profits? Are these ideas/products that can be used by other customers? What's the wider market for a specific customer-driven innovation? Is it complementary with your business strategy? Unless there is a great customer partnership and historical success, the reactive approach doesn't address innovation from where it should originate.
The top of the pyramid is one of the best positions for innovation success and longevity. Innovation that is driven by proactive leadership through studying the customer in areas such as market, technology, and competitor sensing can create demand that doesn't currently exist. This data mining looks at questions such as:
1. What are we good at that our competitors are not that potential customers would see?
2. What problems and frustrations do our current customers face that we can address?
3. Who can we partner with for an innovative offering to expand the customer base into a new market (open innovation)?
If one stays at the base of the pyramid, tunnel vision sets in. As you move up the pyramid, the perspective and potential opportunities increase. Unfortunately, it's not always that easy to climb a pyramid.
I absolutely agree with your assessment. Futhermore, firms need to be willing to move outside of what they are familiar with. In the case of the automobile, there were a lot of blacksmiths crying in there beer over having been put out of business by the widespread adoption of cars, but I'm sure there were a few of them who were proactive and struck it rich by turning their black smith shops into service station.
ReplyDeleteInc Magazine recently did a good piece with Jack Stack on this topic. They called it the "plan B" http://www.inc.com/magazine/20090501/why-a-ceo-needs-to-have-a-plan-b.html
At our firm, http://www.fireworksproject.com , we are going to innovate within our corporate structuring, so we are in a better position to take advantage of the top of the pyramid. We're lucky enough to be just getting started, and so we have a clean slate to work with.