Innovation isn’t just another buzzword. It isn’t a “service” or even a “job”—it’s a way of existence. I’m talking about natural selection in the form of digital Darwinism coming for us all. Companies must adapt or die.
Stagnation over the long term is inevitable for most products and marketplaces, and eventually every company hits plateaus. Perhaps the consumer ages out of the product, or success attracts competitors that erode profits. Communication, sales, and support systems that were necessary early in the product lifecycle become entrenched, putting distance between the brand and the client.
With these pressures in mind, companies set out to innovate to avoid extinction. But it’s not easy to have meaningful innovation when teams are running leaner and everyone is expected to do more with less. The time that people have to sit and actually think has been trimmed out, energy and momentum start to stagger, and as a result, so does breakthrough innovation within the organization.
While companies must continue to develop new, high-quality products, and meaningful new features for established products, there is another approach to innovation they should consider, but is often left on the table: innovating around customer experience goals.
When you focus on customer experience—especially with established goals and ways to measure—then you open up opportunities to create and capture more value.
Disruptive Isn’t Enough. Finding Value Traces in the Press Noise
A lot of the innovation conversation is around products that are disruptive or provocative in some way. Last year, Google Glass received a lot of attention because the idea of wearable tech that removes the need for a smartphone is provocative. Now, a lot of people are disappointed with Google Glass because it isn’t living up to the media hype.
We saw a similar rise and fall with QR codes, because the idea of interacting with the real world to get digital information is very intriguing. But in practice most QR codes add friction to the customer experience by adding more steps to go through, often leading to a pretty weak experience at the end—much like an e-commerce site that isn’t optimized for mobile. This is an example of marketers getting stuck on the provocative rather than on solutions for the customer.
But Glass and QR codes are clues to what is on the way—the fusion of the physical and digital worlds. Augmented reality technology, like Amazon Firefly for example, will eventually become part of our everyday experience. Imagine trade show booths that allow reluctant enterprise customers to immerse themselves in how they will experience a software back at their own desks, or product demos that bring machinery in virtual form directly to the shop floor.
Still think Facebook was crazy for buying leading virtual reality company Oculus Rift? Didn’t think so.
Grease the Path and Innovate to Remove Friction from the Customer Experience.
In fact, a simple “gut check” you can use to help you know if you’re on the right track is to ask if your innovation makes life better. Oftentimes, a new offering is “just because” or “me too” and doesn’t remove friction from the customer experience.
Time will tell if Apple Pay, or the new payments feature in Facebook Messenger announced last spring will make social (and mobile) payments mainstream. But if they do, it will be worth remembering that neither were first to market. Google Wallet has been around awhile without making much of a dent in the market.
When easy mobile payments finally do break through, it might be because of a sexy new product in the wearables category like Apple Watch. Or it might be because of something that doesn’t get a lot of cover stories in the tech and business press, like Alipay, which has quietly grown to three times the size of PayPal and is a big factor in Alibaba’s success.
Think about the workplace tools your employees actually use versus the ones you encourage them to use. How many CEOs are complaining about how nobody uses the expensive internal communications environment they built, or the communications software they bought, while their employees keep using Slack groups? Workplace communication tools have been around forever, but Slack is booming because of its relentless focus on removing friction.
Bottom line, the product that customers perceive as cool will have a big advantage, but the product that customers find easy to use will keep their attention. Innovation matters when behaviors start to change around it. To recast Everett Rogers’ theory on the diffusion of innovations (a.k.a. the tipping point theory), being cool and useful trumps being cool and first.
Being first is the spark. Being useful is the gasoline on the fire, rapidly accelerating changes in client behavior until the innovation really matters in the market. The faster you can get somebody what they want—whether it be information, the purchase process, or the elimination of a chore—the faster you’re going to be on the road to developing brand loyalty and really driving home shareholder value.
A million likes isn’t cool. You know what’s cool? Putting a dent in the f*$!&#* universe.
The internet gets me excited because it can create connections that are valuable for the human condition. Real innovation enables smart measurement and better ways to communicate. Hooking up your coffee pot to the internet is probably not where we should be spending our innovation dollars. We’re at a point where companies are making tissue boxes that light up when you sneeze. That’s cool and it gets press, but it doesn’t enable communication and it sure as hell doesn’t succeed in changing a behavior that is going to pad revenue.
True Innovation Starts at the Business Model Level
One overlooked way to create more value for your customers is to look at how you are communicating with, and servicing your client.
For example, my team is working with a Fortune 50 organization in the cloud technology space trying to improve how its sales force communicates through various channels to different segments. They have the usual email newsletters, power points, and collateral materials you would expect. But new technology now allows for the sales people to take command of how they distribute those materials to their accounts and to get more lift out of their relationships. Essentially, we’re adding a layer of smart marketing automation to a sales process, which allows us to cut through the noise and foster more communication.
That improved customer experience leads to more sales and—even better for long-term growth—a repositioning in the buyer’s mind of the brand as a partner. It’s an innovation in the business model that changes how their sales team succeeds.
Sometimes it’s not about changing the message, but rather its delivery mechanisms. Just like the video killed the radio star, the infographic is killing the stark sales sheets of the past.
Your customer has 99 problems… and is so used to them that they don’t know it.
Google is brilliant at tackling these kinds of problems. So much so that they often are the first to blaze a path that others have followed. I beat up on a couple of examples from Google earlier, so I’ll finish with two impressive Google-owned companies that illustrate what should be at the heart of innovation.
Have you ever been stuck in traffic and wish you knew a better way than what your stupid stock GPS was telling you? Waze is a navigation and traffic information app that leverages the crowd. It innovates around how people communicate with one another to track, understand, and solve traffic problems. By crowdsourcing traffic patterns, they are paving the way for self-driving cars and smarter urban traffic control systems.
And Nest is brilliant because it improves on the thermostat, an old technology that seems to work perfectly fine. It creates new value for users by learning comfort preferences and by knowing when the customer is out of the house, thereby helping them save money. Along with Dropcam (another Nest product), they are staking a claim to home automation and behavior tracking trends. And don’t expect them to stop at the home market. Anyone selling workplace automation solutions needs to keep their antennae up.
These companies are a good reminder that innovation at its core should be about creatively solving problems, or removing tensions for customers. There are a lot of apps and technology products out there that demonstrate what is possible. But just because it’s possible doesn’t mean it’s helpful.
If your company innovation initiatives are sputtering out, not getting the results you want, or not getting good ideas to begin with, it might be time to return to the basics and a change in how you work with people. The process may be customer co-creation or small experiments with growth hacking. It may mean “walking the store”—physical or online—and looking at every touch point. I strongly believe that standout innovation design is going to involve service designers and data scientists.
But whatever process you use, at heart, innovation that matters will involve a hard look at what your customer experience is and what it could be. If your company isn’t relentlessly focused on what is useful, digital Darwinism is going to leave you out on a forgotten branch of the evolutionary tree.