by Mike Marfise

I’m on an airplane, and as I listen to my iPod I’m looking at my seatmate’s MacBook Air. These products show what an innovative company can do when it listens to a market demanding not just new editions of existing products, but new products altogether.

Here’s how.

Competition is relentless, and can come from anywhere, at any time, no matter the industry. In high tech, Saleforce.com became a threat to once market-leading Siebel in just a few years; more recently, MySpace owned the social networking space for what seemed like a few minutes, when Facebook came along. In the fashion industry there used to be four seasons; now apparel manufacturers compete in up to 18 seasons. In consumer electronics, the competitors themselves change; former television manufacturer Motorola is now known for cell phones, and when Dell broadened its offerings to include televisions it began competing not just with HP and Lenovo but with Circuit City and Best Buy.

Consumers, rather than being confused, embrace this type of change. They adopt earlier and faster, creating bigger, faster successes out of wholly new products, such as the iPod or iPhone. Their expectations around new products are higher than they have ever been, and their demand for innovation is constant. And they talk about it – in blogs, forums, online communities, podcasts, twitters, et. al. A recent survey I read showed that the most trusted source for consumer product information and insight, after family and friends, was strangers with product experience. They beat out teachers, TV, news, advertising, and other media. In 1997 this same survey placed strangers near the bottom of the list. The result: A business environment in which the need for companies to innovate is constant.

But all innovation is not the same. Some types of innovation are disruptive. Some types are sustaining. Companies need both to thrive, but must treat each differently. Disruptive innovations typically are products or services or methodologies (such as business models) that can open up whole new markets for organizations. Disruptive innovations generally form not from a single idea, but rather from a collection of ideas and thoughts that often appear in online community conversations or idea portals that provoke or spark the innovation. The new bicycle developed by Trek Bicycles (cited in a Productologist blog post, which is what sparked me to write the post you’re now reading) came about as a result of conversations carried on with current and prospective customers. Trek gathered and analyzed the requirements of casual bicycle riders to come up with a whole new design.

Sustaining innovations, meanwhile, helps organizations maintain or grow their market share typically by adding innovative new features or capabilities to existing offerings. My iPod? Disruptive. That MacBook Air? Sustaining.

But at what point do you determine you need a new product, as opposed to enhancing an existing one? To get to that point, companies first must understand that disruptive and sustaining innovations are not the same, and should not be treated the same. Each goes through different gates and takes a different path down along the new product development process. It’s very important that companies put in place an innovation process that enables them to look at and analyze innovation with an eye towards disruption as well as toward determining how to continuously improve their current products with innovative new features. Listen to the voice of the market, and you’ll hear demands not just for better products, but for new (i.e. disruptive) products.

Do that, and you just may also disrupt the revenue goals of your competitors.

by Mike Marfise

A recent blog post on The Forrester blog for technology product management and marketing professionals highlighted an interesting concept related to a product team’s dilemma when striving for customer-centric innovation — use cases vs. feature descriptions.

The use of user stories and use cases has been around for years, yet many companies I have worked with seem to skip this step or, to be frank, have not done a good job of understanding their customers’ needs. As stated in the blog post, understanding the customer’s needs and business problems is paramount to understanding how to solve those problems. That said, it’s equally important to define the requirements or features that your engineering team will eventually design, and develop a product/solution to suit. Ensuring that there is a collective understanding of the customer and their needs throughout the product innovation lifecycle is mandatory for delivering successful products to the market. In software, for example, it goes beyond production and should continue into the pricing, packing, and commercialization of that product.

So why have so many companies done a poor job of this? Simple… TIME! It’s one thing to say, “I understand my customer.” It’s another thing to spend time with enough of them to understand their collective challenges and look for opportunities to innovate. Let’s face it, if we just did everything a few customers asked for we might never invent new products or categories. So how do you get to more customers quickly, and how do you get a deeper understanding of what challenges they face? Putting the customer at the center of your innovation process starts with listening to them. With modern technologies such as web-based communities, idea portals, online surveys, and social networks, access to your customers and their ideas has become increasingly obtainable. But it still requires that, first, you either get them to participate or you go to where they are already talking and listen in, and second, that you have tools that allow you to analyze the information such that you can reduce the time it takes you to transform those ideas rapidly into qualified product concepts and ultimately to new market offerings.

Here are some suggestions on how to increase the velocity in your innovation process:

1. Identify where your customers are discussing their challenges. For some companies this may be in their backyard: support sites, web site, company-hosted communities. For others, the conversations may be on public sites such as forums, blogs, or review sites like Amazon or CNET. Don’t assume they are not happening – they are!
2. Determine the best way to reach out to your customers. This will most likely be a combination of initiatives, depending on the answer to #1. If they are coming to you, building a community to gather and harness the collective wisdom and insights of your customers is a great approach. If they are already heavily engaged in a wide range of conversations on public sites, using an application that can discover and deliver those conversations to you will be much more successful.
3. Establish a process for vetting and prioritizing what you hear. Once you open the flood gates and begin gathering this insight you need to be prepared to process this QUICKLY! Establish gates and metrics you will use to evaluate these conversations. Determine how to take the next steps in prototyping, validating, and executing on those new ideas, and who will take those steps.
4. Communicate results with your customers. Often this step is an afterthought or done only when products are out the door, via marketing. In the modern age of marketing you should leverage those same vehicles where you gathered the insight to communicate progress and even solicit additional feedback along the way. When customers are invested in your innovations they are more likely to remain loyal to your products and your company. Additionally, they will spread the word much faster than you or your company ever can.