How does your organization generate ideas for new products, services, or business processes?  Many of the companies I’ve worked with over the years rely largely on internal sources for new ideas.  If the ideas come from R&D, they are most likely responses to specific technical challenges or attempts to find applications for inventions.  If the ideas come from product marketing, they are often aimed at creating points of difference versus competitors.  Of course, some innovations result from the combination of technical solutions with product or service differentiation.

Looking at innovation from the technical side of the equation, it’s useful to think of a continuum that ranges from small, incremental improvements in existing solutions (applying a bit of adhesive to notepads to create Post-It Notes) to innovation that springs from discovery of a new phenomenon (such as nano-technology).  Most innovations that make it into the marketplace are near the incremental end of this continuum.  It can takes years or perhaps decades for the discovery of a new phenomenon to result in commercially viable products or services.

It’s a truism that most new products fail–estimates range from 80 to 90% of consumer products.  I once heard the chief marketing officer of a consumer products company cite this statistic and then go on to say that his company’s solution was a fourfold increase in the number of products they planned to introduce.  The products that succeed are those that do a job for customers that either is not being done by existing solutions or not done well.

The idea that customers “hire” products and services to do jobs for them is not new.  In an article in the December, 2005 issue of Harvard Business Review (“Marketing Malpractice:  The Cause and the Cure”) Clayton Christensen, Scott Cook and Taddy Hall remind us that Theodore Levitt would tell his students that customers “don’t want to buy a quarter-inch drill.  They want a quarter-inch hole!”

Some innovations do not change the job so much as the way the job is done.  Before FedEx, people sent documents and packages, but they seldom sent them overnight.  And now, many of the documents that were sent as FedEx overnight letters are transmitted within seconds or minutes as attachments to email.  These are examples of innovations that completely changed the way the job was done.

Whether the job is existing or emerging (more on emerging jobs in a moment), successful innovation depends on understanding the jobs that customers want to perform.  The challenge, form the customer knowledge perspective, is identifying and categorizing the jobs in a way that systematically informs innovation efforts.  Think of the job a customer wants to do as a demand creating condition. We can operationalize demand creating conditions as the concerns and interests that lead individuals to their everyday pursuits, and may lead to behavior in the marketplace, such as a search for a product that does a particular job.  Emerging jobs are those that result from underlying structural changes, such as an increase in the number of mothers of school age children working out of the home giving rise to a host of new “management” challenges for those moms, and opportunities for innovations like mobile telephones.

Geraldine Fennell is a consultant based in Ireland who has developed a framework for understanding consumer motivations. Along with Geraldine and her collaborator Greg Allenby, I designed a study to apply this framework to brand choices for automobiles.  Geraldine breaks consumer motivations into seven different categories, some of which are “sticks” (things we want to avoid) and some of which are “carrots” (things we want to approach).  The sticks include:  solving immediate problems; preventing potential problems; and maintaining the status quo.  The carrots include:  exploratory opportunities and sensory opportunities.  You’re thinking–that’s only five categories.  You’re right.  These five categories are independent of the focal activity.  They apply whether the job I’m doing involves drilling holes in a piece of wood or getting to and from the grocery store. Two additional categories reflect specific experiences in doing jobs:  dissatisfaction in use (with the product or service hired to do the job) and ineffective or frustrating outcomes (when no product or service exists that does the job well).

Companies often fail to identify emerging jobs and jobs that are not done well by existing products and services because they frame the question in terms of the current or existing marketplace.   As an example, the typical “needs-based” segmentation for automobiles will enumerate benefits and associated product features, such as “interior storage,” “rear seat legroom” and “fuel economy” and ask consumers how important or appealing each of these is when choosing a vehicle.  This approach leads to small, incremental improvements in features and benefits.  You won’t hit on an innovation like cupholders by asking consumers how important interior storage is.

A good starting point is qualitative research (and I recommend individual in-depth interviews rather than focus groups) organized around the stick and carrot categories I listed above.  Here are statements reflecting some of the “sticks” that might affect our automotive choices:

  • I’m concerned about getting from point A to point B without getting injured (solving an immediate problem)
  • I’m concerned about the impact I have on the environment (preventing future problems)
  • Driving is no big deal for me (maintaining stable state)

Here are some “carrots:”

  • I am easily bored when I drive (exploratory opportunity)
  • It’s important for driving to be fun (sensory opportunity)

And here are examples for the last two categories:

  • I’m concerned about the mechanical reliability of the car I drive (dissatisfaction in use)
  • It’s difficult to find a vehicle that meets all my driving needs (ineffective/frustrating outcome)

You can use these categories to guide the discussion, even listing them for the interviewee.  A second step involves matching the concerns and interests to specific usage or consumption occasions.  In our case, we asked consumers whether each concern was an issue in usage occasions such as traveling to the store for groceries alone, with children, or with other adults (three separate occasions).

To briefly summarize the study results, we found that a segmentation based on these (and additional) concerns and issues helped explain preferences for luxury car makes.  As an example, preference for Mercedes was strongest in a segment that was concerned both about safety and operating costs.  Volvo also did reasonably well in this segment, and also in a segment of consumers who are concerned about their impact on the environment.  Both of these brands have advertised the safety of their vehicles.

This might seem like a “traditional” needs based segmentation but remember–we did not ask consumers how important it was that a vehicle have certain safety features.  We asked them whether they had any concerns about their safety in each of several usage occasions.

When it comes to innovation, this type of information can help a company focus resources on opportunities that align with consumer motivations.  Each one of these concern-occasion intersections is a potential job that a consumer is trying to do.

Practically every “breakthrough” or game-changing innovation I can think of either enabled the customer to do a new job, or did an existing job better than any existing solution.  The best way to increase the odds of successful innovation is to start with the customer.

Copyright 2009 by David G. Bakken.  All rights reserved.