Can you ‘engineer’ innovation?

Ask people what is most important to them in a shrimp dish, and almost universally they will reply, “Freshness!” It turns out that this is not true.

A few years ago I had lunch with the CEO of the largest supplier of shrimp to the United States. When our conversation turned to his success he quipped, “It’s got nothing to do with shrimp!” He went on to explain that his secret lay in consistency of delivery. It began with the company’s trucks being at the door of each Red Lobster restaurant every morning at 5 AM, without fail. Next, the shrimp had to meet exacting standards of size, weight and color–customers at Red Lobster expect their shrimp linguini to be the same every time. And since repeat customers demand predictable bills, the company had to provide stable prices despite daily market fluctuations.

“So what about freshness?” I inquired. The shrimp were fresh enough, the CEO argued, as they are flown in from Asia daily. In fact, importing shrimp bred in large Asian farms by plane was the real innovation that allowed him to win in the marketplace, since only that way he could give customers the consistency that they take for granted–and drives their spending.

The story illustrates a key challenge we address when seeking new revenue sources for our clients: differentiating what customers will say from what they will actually pay for. The answers won’t come from traditional focus groups and surveys, as these rely on past information or opinions on existing products. Instead, by seeking what customers can’t tell you but would love you to know, we can view innovation as a process of discovery. At Zermatt Dusk we have adapted elements of Design Thinking, a framework pioneered at Stanford, for a better approach to identify actionable demand that will lead to innovation and new revenue streams. Here’s an outline for how it works:

  1. Uncover underlying needs, motivations and problems. Get customers and prospects talking to each other in the proper context, and listen. Don’t ask them about shrimp! Let them discuss why they wanted to eat out that day, and how they ended up at Red Lobster – or didn’t.
  2. Find patterns. From multiple observations, patterns of needs and problems will emerge. Don’t attempt to solve them yet.
  3. Design principles. Develop a small set of ‘rules of thumb’ that will guide the ideation of solutions for the needs and problems.
  4. From the principles, design potential solutions to the needs and problems.
  5. Pre-prototype. Find ‘quick and dirty’ ways to test solutions and continue to learn.
  6. Iterate and re-iterate. Cycle through all or part of actions 1 to 5 multiple times, as you continue to identify and modify patterns, principles and solutions. As the best route to market is often unpredictable, more learning will come from increasing the number and speed of iterations than from the completeness of solutions.

By shifting the lens from customer response to underlying needs and motivations, you broaden the opportunity for growth while simultaneously sharpening the focus on productive innovation.

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