Where does innovation come from? You may answer: from companies such as Google and Apple! Or Amazon! Or NASA! No, from my University! Many answers are possible and true. Yet, keep in mind that changes and ideas are not solely produced by academia or large organisations and their R&D labs. Users, customers, amateurs and others often have ideas that may lead to small and large innovations. Sometimes these user-driven innovations are adopted by an existing organisation, sometimes by new (commercial) start-ups. Part of the challenge for any organisation is to align with such new initiatives instead of being surprised by new developments in the market.
Consider the following example. Suppose you are the owner of a bakery. You bake and sell nice breads, cookies and all kinds of cream-pies. In fact, you are renowned for your high quality, well-priced, cream-pies. Your shop has many loyal customers and attracts new customers. So far, so good!
Your staff is noticing some odd requests in the past quarter. Instead of buying products, some customers are asking to only buy ingredients. High quality flour, yeast, baking soda, sugar, … Your staff thinks it is a good idea to also sell ingredients. You agree to start to sell high quality ingredients.
Your staff, proud of spotting the new sales venue for ingredients, is actively talking with these customers. And your staff learns that these customers are engaging in a competition, already for the second year in a row, to bake the nicest vegetable pie! The customers currently are enthusiastic amateurs, who work on baking highly professional pies, including savoury pies (non-sweet). They applaud the high quality ingredients from your bakery that they currently need for their hobby.
When your staff reports on this new development, you are in a conundrum. Are these customers becoming a new competitor? Is this merely a brief phase, or heralding a new trend? Should you produce your own vegetable-sweet and savoury pies? Should you abandon your strict “bread and cream-pie product-line”? Is there really a market? What to do? How to commit and to what extent should you commit?
Pumpkin Pie (by Jamie Oliver, see references).
Your staff suggests an elegant solution: why not cooperate with these customers? Provide them with the best ingredients, perhaps offer a loyalty program with reduced prices, participate in the competition in the jury, offer prizes such as selling the winning pie for a year with 50/50 split profits, … You now have a new problem: too many ideas :-).
This example illustrates the puzzle: when to dare diverge from your organisation’s past successes and work on something new. By listening carefully to your customers, you may spot fads and/or trends: these can reduce your risk in entering a new market. With user-centered innovation, maintaining a dialogue is key in gaining understanding about desired added-value. How to enter a new market to start to deliver the desired added-value, while managing risk, is explored in a next blog.
Do you wish to read more?
- A TED talk by Charles Leadbeater about “The era of open innovation”.
- Jamie Olivier, Recipe for pumpkin pie, visited on 28 August 2015.
- Participatory Innovation – the conference series “PIN-C 2015” and earlier (2013, 2012, 2011).