Why Your Customers & Employees Are Your Best Sources of Innovation
As a society, we are hyper aware of disruptive innovation, which is the process of creating a product that disrupts an industry. When you think of the word “innovation,” usually the following gatekeepers of innovation come to mind: Steve Jobs, Elon Musk, etc. Steve Jobs and Elon Musk are trailblazers in the way people view the capacities and capabilities of technology, and their impact has completely changed the way we interact with technology. Since disruptive innovation is the most obvious form of innovation to recognize, society holds disruptive innovation as the standard of innovation which creates a cloud of unattainability around the prospect of innovation
The pressure to innovate is much more powerful than it was previously. The issue with such pressure is that it forces companies to chase fads instead of accurately aligning the company around Customer Experience (CX) and Employee Experience (EX). Innovation is not about designing to the coolest trend, but rather, it is about establishing a strategy that continues to drive value for stakeholders.
Innovation Is Not a One-Size-Fits-All
At its core, innovation is a customer-centric framework, but the process and response continuously evolve to fit the needs of customers and employees. It is a mechanism that solves a problem that no one could fix. Innovation isn’t a Big-Bang-like phenomenon that can transform every industry in one go; it is a systematic process that looks different for everyone. Every company has differing customer and employee needs, and innovation is about looking for a way to align and resolve those needs.
It’s easy to paint innovation as simple as a framework. But, the best innovation is a process that requires a systematic, data-driven approach to identify ways you can make your customers’ lives easier. Innovation only works if it provides more value by creating a better customer experience and/or employee experience. We will layout a guide on how to source ideas from your employees and customers to inform sustainable growth.
#1 - Use Your Resources Well (or Validate, Validate, Validate!)
Innovation does not come from business handbooks or life-changing ideas that hit you in the middle of the night - it begins with understanding who you serve better. That means research! Research can feel like an afterthought during the innovative process, but it is a crucial aspect because research can map the process of innovation by locating pain points, areas of improvement, opportunities for growth, and more. Bill Gates once said, “I believe in innovation and that the way you get innovation is you fund research and you learn the basic facts.”
In any innovation process, research has to be put on the frontlines of priority because research is a powerful tool that can map out what the innovation process looks like and how to drive the most value during that process. Research doesn’t tell you what to make - it makes sure you understand what the problems are and if they’re big enough for your business to solve them in a unique and valuable way. Here are some ways to use research to innovate
Before you invest in research, talk to your customers - At the end of the day, research is expensive, and it’s expensive for a reason. Innovation must come from an area of friction, and the best way to find that friction is to talk to your customers. Find out what they’re trying to do and how your products and services can be tailored to your customer’s needs.
Use “jobs to be done” as your mantra - The “jobs to be done” framework aligns your research around the jobs that your customers want to accomplish with your product/service. The “jobs to be done” framework combats Henry Ford’s “if I asked my customers what they wanted they’d have asked for a faster horse” retort. It’s problematic to assume the jobs your customers are trying to fulfill with your product/service because your assumption may not be encompassing what your customers actually need. Don’t just assume your customers need a “faster horse,” see how you can make their lives easier with your product/service.
Don’t innovate in a vacuum - Innovation is not a system done in isolation. In order to innovate, you must understand where the market is and where you are in it. An idea can seem like a game changer, but there could be 4 other companies doing variations of the same thing. Know where everyone is so you can position and build well.
#2 - Let Your Employees Get Creative
The biggest misconception about innovation is that you should always look externally instead of starting with your employees as a source of inspiration. The best ideas for innovation come from the employees who talk to your customers every day, understand your culture, live by your values and mission, understand the market, and ward off the competition. Most growth comes from within, and innovation requires a customer-centric and company-aligned internal team excited to find opportunities for growth. As mentioned by the WSJ:
“It’s often the employees — rather than outside consultants — who know a company’s products and processes best. According to management experts, many of the most innovative companies tend to solicit ideas from staff throughout the organization, not just the executive ranks.”
Employees not only understand the expectations of your customers, but they also recognize the goals of the company, making them your best resource to balance the needs of customers and the company.
Want to know how to begin to utilize your employees? Here are some simple steps:
Advocate for Risk-Taking and Encourage It - In order to innovate, a company must be ready to take some great risks! Pockets of failure are inevitable in any process of change, so providing your employees with the psychological safety to translate their customer-and-company expertise into implementable ideas will produce the boldest and most aggressive ideas that can propel the innovation process.
Let’s Get Creative - Get an idea room or create regular space for ideas! An actual room or a regular brainstorming session can be a great way to create a safe space for your employees to be creative. Creativity will breed ideas that can not only help the company but also the customers. Don’t be afraid to let your employee play designer! This may allow your employees to get extra creative.
Your employees have access to both customer intelligence and company values and goals- give them the capacity to be creative risk-takers!
#3 - Listen To Your Customers, and Really Hear Them
Business is all about building the type of relationship with customers that makes them come back for more, want to do more business with you, tell other people how great you are and give you feedback to improve your business. We call those the 4 Behaviors of Loyal Customers.
In order to generate referring customers, the company must have a process that continually meets and exceeds customer expectations. Customers don’t just want the best service, they want a superior customer experience.
An important part of innovation is finding areas of untapped potential. Harnessing the customer's voice can locate an area of friction for the company to resolve.
Want to know how to innovate on the customer side? Here is how:
Ask The Question: “What Is Difficult About Doing Business With Us?” - Simply asking that question can propel the innovation process. You are showing your customers that you care about their voice and you want to resolve their issues. Actively asking your customers for their pain-points can easily pave the path for value-driving innovation.
Gather Your Data! Use Your Metrics! - There are tools to effectively source pain points and customer feedback from your customers: Use them! Scorecards are great interactive tools to prioritize and rank ideas that will inform strategic planning. Innovation is organizational; it requires ordered ranks and levels for it to sufficiently pan out. Scorecards can give you a benchmark on where to start the innovation process.
Now that you have a better idea of how to put employees and customers in the driver’s seat of innovation, discover how we helped one of our clients to innovate.
Case Study: How Innovation Lead to Sustainability -- Identify, Act, Solve
Innovation is survival. It needs to become a part of your core business in order to sustain a competitive advantage. One of our clients - A $256 million company in the services industry - noticed changing trends and slow internal growth that led to flat sales. They knew they needed to innovate their operations to grow and thrive, but didn’t know where to start.
From our research, the company found that while members had positive interactions with the business, they did not feel that they were receiving value from their current products and services. In order to guide the company to resolve that friction, we facilitated a strategic innovation plan to redefine the customer experience to drive more business.
Customers didn’t understand their benefits as members - The research process streamlined where customers saw value and where they didn’t for a better communication campaign
Customers wanted more customization - The data identified the most valuable touch points to customized and helped our client better use their resources
Customers Didn’t Understand the Insights - The customer feedback identified confusion around the assessment and showed exactly how to simplify analytics and increase utilization
While a company can create great relationships with their customers, you have to continuously offer competitive value. Loyal customers are gold, and but if you’re are not innovating your systems, you are at-risk for disruption from other companies who will constantly improve. It is important to constantly reevaluate your position in a market to get a better understanding of how to sustain a competitive advantage.
Don’t Innovate Just To Innovate - Innovate For Your Stakeholder
Innovation is the smartest method to achieve sustainable growth in any given industry. Measures of success include employee satisfaction, customer satisfaction, and profitability; Innovation is able to drive your business to excel at those measures of success. What generates business today is not guaranteed to generate business tomorrow. Peter Drucker claims that, “The greatest danger in times of turbulence is not the turbulence—it is to act with yesterday’s logic.” We have seen this to be true in the case study - trends are always changing, and how a company responds to these changes will give them the best chances to continue pleasing customers.
Now that we have discussed the multifaceted qualities of innovation, it is now time to innovate. While that phrase may seem daunting, beginning to innovate is nothing to fear. Innovation begins with active listening and research. Want to know where to listen and research? Listen to your employees and customers because they are your best avenues for innovation.