Category Archives: Market Research

The Problem with Open Innovation

A recent article by Randall Wright in MIT Technology Review discussed the problems with open innovation. There has been lots of articles recently about how open innovation is the next big thing in innovation. In a nutshell, it involves open up your innovation to a large group of people in order to find new ideas.  It’s popular, and has been adopted by lots of well known organizations, such as Starbucks, Coke, and Nike.  Coke purportedly used this methodology, and came up with ideas that were very successful.  However, most of the ideas were based on consumer marketing.  In other words, they got the people that drink Coke (a large percentage of the population is at least familiar with what it is), and had them design a campaign to more effectively sell the product.  The results rivaled the quality and appeal of ads produced by top advertising agencies.  But did they innovate?  No, they “reverse surveyed.”  Instead of surveying consumers with a set of questions, taste tests, etc., to determine the best way to market, they just asked a whole bunch of people to give them the best way to market.  This is similar to asking every customer who leaves a restaurant, “How could we improve our appeal/food/restaurant?” except you do it all at once.

I think this method works well for consumer-oriented organizations.  It can help you select the best new paint colors, catch phrases, and product packaging.  It works in areas where the problems are well known and understandable, i.e., what is your favorite color.  However, when you talk about ground-breaking innovation, you’re referring to areas where the average person has no experience.  Consider Linux, the darling of open innovation, is still outpaced by the commercial products.

According to Wright, “real innovation is always the outcome of ongoing discourse among a small group of innovators who truly understand the importance of what they’re working on.”  Read his article for more insight.


7 Rules for Improving Innovation: #7 Customer Input

Improving Innovation: Customer Input.

To fuel the innovation engine, companies need to pay extremely close attention to their customers and form strategies based around everything they can possibly learn.

To accomplish this, most organizations spend a chunk on R&D, market research, focus groups and feedback programs, simply to gather insight and suggestions for “potential” innovations.

To survive and remain competitive, regardless of your industry, your company needs to be the first to market with new offerings. That means understanding what your customers are like. Naturally, customers’ needs and wants are ever-changing, but you need to do everything possible and know as much as you can about your users. Earmark the time, money, and people to find out how customers interact with every aspect of your product, service, company, delivery, support, and so on.

And ask their opinions. It sounds rudimentary, but so many companies fail to do it, and make the information they find out actionable. This devotion to the “voice of the customer” could set you apart and become the gamechanger for your business.


What are Your Innovation Metrics?

You’re measuring progress in every major area of your company. How closely are you watching your innovation metrics?

A recent survey of managers in large organizations showed that close to 70% of executives track absolutely NO metrics for innovation on a regular basis.  In a very small percentage, some claimed to manage only three or less statistics in this area. Realistically, this is just not enough benchmarks to get an accurate picture of how you’re doing innovation-wise.

On the other hand there are companies that track FAR too many numbers. An innovation consultant cited an example of a company he’d worked with that were using 85 different metrics in their innovation reports. He admitted it was “mass confusion”; the end result being that none of the numbers made sense to the majority of the management team. Furthermore, it was very difficult to regularly collect this data, so it often went unreported or ignored.

Innovation experts say “make it measurable, but keep it simple”. 8 to 12 metrics seems to be a good sweet spot for consistent, meaningful innovation reporting. That’s about the the correct number for Samsung. On the whole, company leaders there manage things like ‘time to market’ and ‘success vs. failure rates of new products’. Also watched closely are ‘customer sat ratings for new releases’ as well as ‘percentage of revenue from new products’, ‘benefits from internal improvement plans’, and a few more. They stick to these because they’re useful and relatively easy to capture.

Of course, all of these are crucially important indicators of how well your organization is doing from a new product and innovation perspective. It’s just as important, however to NOT get bogged down in too many details. Keep it straight forward, concise, and meaningful and you’ll be able to better allocate and leverage your innovation resources.

Take-away: You can’t improve upon what you’re not even measuring. What are the “go-to” numbers on your innovation dashboard?

Source: BusinessWeek

Building Your Own Market for Innovative Products

The more innovative andrevolutionary a breakthroughproduct is, themore likelythat you’ll have tobuild your own market for it. Customers don’t come running for products they don’tknowthey need yet. However the payoff is huge! If you can define the market from the ground up, chances areexcellentthat you will own that market for a very long time.

Back in the 60’s, scientists working atDuPont developed Kevlar – ablend of polymers with five times the strength-to-weight ratio of steel.Accustomed to their constant stream of success withinnovative products, the chemical giantnaturally assumed that the market would simply come to them. After all, Nylon, Teflon, and several other artificial fibers ofDuPont’s creationhad been adopted byscoresofindustries and usedin successful products that were selling all over the place.

Not so with Kevlar. It simply couldn’t find it’s place in the world. All of the uses and products DuPont had envisioned were not feasable and industries were just not interested in the revolutioary new product. The biggest failurecame when American tire makersrejected Kevlar. The companies optedtocontinue usingsteel belts in their radials, rather than switch to something new, even though Kevlar offered a significant weight reduction. After all, steel was reliable, easier to source, and still a bit cheaper than the new material.

It took some very creative thinking andmarketing on DuPont’s part to find a niche in which to sell Kevlar. The testing began to find out all the new uses for this new fiber. They knew they had amiracle solution, now they just had to find the problem it solved.They went out to some their largestcustomers askedfor their input and shared theirresearch data. The real breakthrough camewhen they found itcouldstop bullets. Once the US Government caughtwind of the findings, Kevlar became the go-to material for making things like bullet proof vests and army helmets.With the militaryon board,the police forces across the country came calling and the rest is history.

Because of thisclever market adaptation, Kevlar has since proven itself an extremely worthy material for all kinds ofproducts from better ropes to boat sails to protective devices that workers use.History has proven it to be one of the biggest selling products DuPont ever introduced. Quite miraculously,it also totally redefined how DuPont proactively builds a market space for it’s new products before they move forward with developing it.As a result, they control the markets they create. Can you think of a product that challenges Kevlar in its own market space? I’ll give you a hint: In the 80’s a very similar material called”Twaron” was introduced by a competitor. It neverput the “tiniestding” in DuPont’s “armor”.

Lots of companies introducegreat ideas and productsthat just can’t quite catchtheir stride, and many that could performmuch better if the company spent more time to understand the marketplaceand the needs of potential customers. By going outside of your company walls toresearch and investigate trends and feedback you can begin tobuildbetter, and in a lot of cases brand newmarkets for your ideas.You just need to get innovative with how people are using your products and ask them for their ideas.

You can jumpstart this process withemployees and customers -they all have great ideas and will share them if you present the right challenge. With Flagpole ( you canshare business and marketing challengeswith everyone in and around your organization. Best thing is, you won’t spend billions on research like the “DuPont Corporations” of the World: You can get started for free right now.