Different Strategies, Different Tools
In our survey, and in follow-up interviews, we asked respondents about the mechanisms and processes their company employed, as well as the degree to which they depended on both internal and external networks. Clearly, several ideation techniques are common to all innovators, but by and large, companies seem to focus on the tools and processes that are most aligned with their chosen innovation strategies. In each of the areas critical to early-stage innovation, the initial capturing of ideas and the process by which companies decide to move their good ideas into the product development process, we find considerable variation. (See Exhibit 3.)
Need Seekers. These companies understand the importance of developing strong relationships with customers — they rely more heavily on customer observation than do companies that follow either of the other two strategies, and less on pure market research. Indeed, Need Seekers’ reliance on mechanisms that can provide deep insights into the end-users of their products goes beyond their willingness to observe customers directly; they also depend more on customer focus groups and “idea workout” sessions than do Market Readers or Technology Drivers. Further, they are more likely to leverage social networking (10 percent say they use it) and deep analytics involving customer data.
According to the survey, Need Seekers also make avid use of internal networks — especially those involving innovation champions. Indeed, on an indexed basis, Need Seekers are much more likely than companies following the other two strategies to put people into this role, and even more likely to see such champions as an effective element of their ideation processes. Cross-unit staffing, formal idea conferences, and communities of practice are also popular among them; in fact, companies classified as Need Seekers use all these internal network structures at higher rates, and view them as more effective as well.
Externally, Need Seekers tend to rely on networks of customers, followed by their channel partners and suppliers. Again, Need Seekers use these networks more consistently than the other two groups and also see the networks as being more effective. Says Tom Kavassalis, vice president of strategy and alliances at the Xerox Corporation, “We call what we do customer-led innovation, and its whole purpose is to make sure that our innovation process is really relevant to customers. We frequently host customers at our R&D centers and have them talk about what keeps them up at night, and where they think technology might be helpful. We look for customers who are risk takers, willing to be the guinea pig in the deployment of a new solution. In exchange for them giving their insights into their needs, we give them the opportunity to be an early adopter of something really new.”
In their search for new ideas, Need Seekers frequently cast their nets wide. Douglas Smith, chief technology officer at the Timken Company, notes that for its first 100 years, this machine components manufacturer “was a closed innovation shop. If the research didn’t happen inside our four walls, then it didn’t happen in any of our plants or in any of our engineering areas. Over the past decade, we’ve come to appreciate that there are lots of other good, smart companies and exceptional talent out there. We’re developing new ways to tap into other pools of knowledge — from customers and suppliers to universities and third-party companies. We find that we can create the best value when we complement our internal scientific knowledge with external perspectives and approaches. Having an operating model that aligns the right access to new ideas at the right cost and the right risk creates a win-win situation for both parties.”