Over time, it’s easy to get used to a certain way of viewing the world. While “common wisdom” is often useful in speeding decision making, it can also keep us from perceiving lucrative opportunities even as they grow in front of our eyes. Of course, this paradox is nothing new. Over 100 years ago, Mark Twain wrote “I was seldom able to see an opportunity until it had ceased to be one.” The rising pace of changes in demographics, communication, technology, and so on makes this challenge more prominent than ever. Read More
Upon reading his 1897 obituary in The New York Journal, Mark Twain (who actually lived until 1910) responded, “the reports of my death are greatly exaggerated.” We were reminded once again of this witticism when we read an article describing the “end” of product innovation and the rise of “price” as a way that customers define value. This is not the first time that the death of innovation has been reported. However, with our combined experience of 40+ years in the innovation game, we have a completely different view of the matter.
Innovation in the creation of new and different products and services is not and never will be dead; however, “innovation” comes in many styles and flavors, some of which will be far more successful than others. That’s why it seems a bit over the top to declare innovation dead simply because what was intended to be a premium product did not live up to expectations. Perhaps it’s fairer to say that when a new product or service cannot distinguish itself from its competitors, it’s more likely to be seen as a commodity, and that commodity purchase decisions are frequently driven by price consideration.
Many factors influence the success of an innovative product or service, but one of the most powerful determinants is whether its intended customers perceive it as not only novel, but also relevant, beneficial, and necessary. It’s important to note that new features, although technically innovative, may not always be seen as sufficiently beneficial to justify a purchase, especially if there are competitors which meet the customer’s needs at a lower price. What really sends a new product or service over the top is its ability to go beyond offering new features that satisfy customer “wants” and offer benefits that customers truly satisfy their needs. This is especially true if the new product/service satisfies a need in a way that is not currently available by other means; in this case, customers will frequently pay a premium price because they perceive premium value.
Of course, it’s not always easy to figure out what customers will see as a “need to have,” as opposed to a “nice to have,” since perception of value is subjective and based on many intangible as well as tangible factors. One thing is for sure — over and over again we’ve seen that simply asking people “what do you want” frequently garners either blank stares or simple rehashes of things with which they’re already familiar. Likewise, the approach of brainstorming new features by isolated developers or project teams, then running concepts past customers for post hoc approval rating also meets with frequent disappointment. In contrast, innovators who find ways to interact with and observe customers, probing into what they value and what they find difficult in their daily lives, have much greater success in discovering what customers need and will value, even if the customers themselves have trouble articulating it.
A case in point is Apple’s continued success in creating distinction in established as well as emerging markets with products like the iPhone and iPad, which meet consumer needs for high functionality, including some unique capabilities, combined with uncomplicated operation and highly attractive design. It is notable that customers are standing in line to get their hands on the iPhone 4G, in spite of a huge abundance of other cell phone and smartphone brands. This is in marked contrast to many brands of flatscreen televisions, which rapidly displaced conventional cathode ray tube televisions by meeting consumer needs for lighter, more compact TVs, but then became virtual commodities as manufactures built in more features which did not tie into other customer-valued needs.
As we’ve discussed in our article, The Keys to Unlocking Sustainable Innovation, the ability to tune into a market and home in on consumer needs provides a substantial advantage to companies as they work to cope with a constantly changing marketplace and create new and distinctive value for their customers. Ultimately, customers will pay premium prices for innovation they truly believe is “valuable” to them. The more that you observe what people actually do in addition to what they say in focus groups, interviews, surveys, etc., the more likely it is that your company’s innovations will strike a chord that resonates with customers and pays dividends as well.
“Inch by inch life’s a cinch. Yard by yard life is hard.” Marvin Solvith, 1920 – 1974
As I was drinking my Starbucks coffee, I noticed writing on the side of my cup titled "The Way I See It #286." The quote, authored by comedian-magician Penn Jillette, reads "Hypocrisy is annoying but not evil. Someone who says one thing and does another has doubled their chances of being half right." At the bottom of the cup there is a disclaimer notice that reads: "This is the author's opinion, not necessarily that of Starbucks." Is it?
I can certainly believe that Starbucks was trying to appeal to a certain type of customer who enjoys thinking about different sides of issues and engaging in debate. However, I also believe that all messages a company sends out reflect their opinion on some level. After all, there are thousands – if not millions - of controversial quotes out in the world. Why did Starbucks' management choose to use this one?
When a company is going through tough times, it's essential to communicate in a way that is credible (e.g., words and actions match what others can easily perceive). In the case of Starbucks, the promise of convenience, the ability to try unusual blends of coffee, and knowledgeable staff who engage in conversations with customers have been as much a part of their communication as the writing on their coffee cups and ambiance of their stores.
Unfortunately, the promise now has a "half right" characteristic to it. Starbucks has seriously cut back on the number of shops it operates, making the existing stores more crowded. I"ve noticed that the knowledgeable, service oriented baristas are increasingly being replaced by more traditional clerks who don't have information or time to care about me as a regular customer. Bolder blends are no longer available at the times I want them – at least not without my asking and hoping that the barista on duty will accomodate me. Why do I keep going back? Complacency. But that could easily change if a viable competitor arrives in town.
Does Starbucks' management realize that some customers could be taking unintended messages from the writing on their cups? I'm sure they don't. And I am not bashing Starbucks. The company is facing legitimately tough challenges as the economy goes through hard times. Still, they would do well to heed the writing on their cups and adjust the message so that it better reflects what they want to communicate under current circumstances.
Think about the writing on your own cup. What unintended messages might your mug communicate about you, about your company, and about life in general? Remember: disclaimers alone are not enough to negate what others may already notice.
“Experience is what you get immediately after you need it most.”
As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.
John F. Kennedy
“Insist upon yourself. Be original.”
-Ralph Waldo Emerson, American essayist and poet, 1803-1882
“You are not in charge of the universe; you are in charge of yourself.”
—Arnold Bennett, British Novelist, 1867-1931
Sign placed at the entrance of a crowded sidewalk cafe.
*“Do What You Say You Will Do”
Source: Credibility by James Kouzes and Barry Posner (Jossey Bass)