get realsight

Spending on the right ideas

The 2008 Innovation report by BCG has finally arrived. The big idea coming from this work is: Is the tide turning? Looking at the results tells a familiar story: an increase in frustration with innovation and more money being pulled back as a result.

There are 4 things that are the culprits for the lack of return on innovation:

1. lengthy development times

2. risk averse corporate culture

3. difficulty selecting the right ideas

4. lack of internal coordination 

The summary goes on to state that all of the above are under executives control. While this may be true, 1 & 3 are easily solved by finding better quality ideas from Stage Zero. If focus is place on finding and choosing QUALITY ideas, rather than QUANTITY, this issue will start to correct itself and innovation teams will be able to cut down on development time and overall spending by focusing on ways to generate better ideas in the front end of innovation. 

Existing brainstorm and research techniques force companies to chose between a lot of ideas without quality or few ideas that lack uniqueness. Spending a little more in the front end to collecting hundreds or thousands of observations of how products are actually and then applying a little science into the art of innovation will allow companies to have their pick of better ideas from the start and save them money in the long-run, ultimately increasing their rate of return.

Top Down and Bottom Up Understanding of Consumer Decisions

It's a common phrase used when building financial models for new products. In fact, most of us use it in many ways in our own lives, even if we don't realize it. Why? Because it helps create consensus and delivers a level of comfort we need to make decisions.

It amazes us how this notion is rarely used to understanding consumer decisions. When looking for ways to innovate, we often rely on how people interact with products. This approach leads to a dangerous assumption that the product is the "hero" and nothing else in the usage situation matters. This is not the case!

By understanding the multiple dimensions that influence usage events and marry them with product benefits that influence use, we can establish a top down and bottom up approach that will create consensus that innovation teams are making the best decision in Stage Zero.

Show vs. Tell: Know the real potential of an idea

The Challenge: Discussing ideas with consumers may yield the wrong path.

Traditional methods of concept validation, a written positioning and picture of the product, requires consumers to be aware of the unmet needs products are trying to solve. If another product has already educated consumers about the need, or the idea is a line extension of an existing product, the traditional concept board is acceptable. The challenge arises when companies are solving for an unarticulated need or a new to the world product.

Consumers will never believe they need a new product if they do not recognize the need. Since most of everyday behavior is not recognized, misinterpreted, or just forgotten, the best way to test new ideas is through visualization of unknown behavioral patterns that represent the needs the new product is solving. By showing consumers a video reel of behavioral patterns as stimuli for the problem, they have a framework to think about patterns of their own behavior and can better judge whether they would adopt the product into their everyday routines.

By using video based concepts demonstrating unmet needs, companies will have a better understanding of the real potential of new ideas.

Garbage In, Garbage Out: The importance of quality ideas.

It is widely understood that it takes 100 ideas to produce one successful new product. In fact, innovation metrics for Stage Zero support the practice of generating a large quantity of ideas to be successful.

However, this current practice is very inefficient from time, cost and resource standpoints. It also does not focus on the quality of ideas, only the quantity. Within the walls of corporations, the current idea generation and testing practice is often described as “throwing ideas against a wall to see if they stick.”

So how do companies develop quality ideas that will lead to success? Passively engage consumers in opportunity identification and idea generation.

Knowing what all readers are thinking right now, I’d like to address one point. When I was a member of corporate innovation teams, I often said "consumers can't help you with that" when I knew the innovation tools would not provide our team any more information than we already knew. Engaging consumers in finding opportunities or brainstorming ideas was taboo. The fact was, at that time, there weren’t any tools that would allow consumers to participate in Stage Zero without relying on forgotten, misremembered, or simply unrealized behaviors and motivations.

Now consumers can help with opportunity identification and idea generation. By observing and discussing the workarounds and trade-offs to problems they may not know they have, we passively engage consumers in Stage Zero. Through additional quantification of observed situations the resulting consumer-driven opportunities and ideas are real, and dare I say “validated”? There is not a DWB or Liking score, but the behavioral patterns are large enough to be measured and they were built from actual consumer behavior.

Companies can finally discover opportunities and develop quality ideas from a consumer lens at the start, improving their chances of in-market success.

VOC to EOC: Stop missing growth opportunities.

Companies that rely on the voice of the consumer to make business decisions are missing real growth opportunities.

Marketing investments are made with incomplete information about consumer decisions. Nearly all consumer knowledge is based on interviews, whether it be through ethnographies or surveys. These methods do not paint a complete picture of consumer decisions as they collect a fraction everyday behavior. Academic research has shown that up to 95% of all behavior and thoughts are either forgotten, misremembered, or simply unrealized.

How can brands gain a competitive advantage and successfully grow with a limited understanding of their consumer? Start becoming the eyes of consumers over time, rather than the voice of consumers at one point in time.

Through extended observation of product usage events via cameras, coupled with an on-going dialogue about motivations and rationalizations, companies can identify real behaviors and understand the systems and processes consumers develop to manage their everyday lives. Through careful analysis of these events, companies can also identify the illusive gap between perception and reality and create products that make consumer’s lives better.

When you think about your own everyday routines, how many decisions are on autopilot? How many are influenced by your surrounding environment at the time you make decisions? These are the behaviors that are commonly forgotten during voice of consumer approaches. These habitual behaviors are powerful, missed opportunities that companies need to tap into to improve brand relevance and ultimately, sales.