The building blocks of success
All great innovations are based on the same principle: they solve a problem comprehensively, without preconceived notions, and without clinging to previous solutions – and above all, they do so significantly better from the customer’s perspective.
Products and services are designed for people. Often, a customer acquires a solution for functional reasons, such as completing a task – whether it’s a work assignment or listening to music. However, there are other motivators as well. Especially in fashion products, emotional and social aspects are often more important than functional ones. Their importance should not be overlooked even when designing function-centric tools and machinery.
The human perspective is crucial, but it is not sufficient on its own. If the solution does not generate viable and profitable business for its provider, it has no chance of success. The requirement for operational efficiency also applies to non-profit organisations, even though their profitability may not be measured directly in monetary terms.
A solution always requires technical implementation. Sometimes this necessitates investment in the development or acquisition of new technologies. At other times, the simplest solution is the best for the overall picture.
Technology-driven product development
Technology-driven innovation begins with the development of technology and continues later with its commercialisation.
Technology-driven development efforts are front-loaded. Technology can be developed quite extensively before any market or user research is conducted. This approach can be justified to protect the technology and competitive advantage, but it carries a significant cost risk.
If, during development or after production has started, it becomes clear that the developed solution does not meet user needs or enable a profitable business model, making changes is often very expensive. In the worst case, the entire effort may be wasted if the customer finds another solution that better meets their objectives. The risk of failure increases with the number of assumptions made about customers’ goals.
Technology-driven product development is best suited to situations where existing technology is to be replaced with a new solution that more effectively, affordably, ecologically, or otherwise better meets the same customer objective.
Market-driven product development
Market-driven innovation involves analysing the market coverage of one’s own and competitors’ offerings and seeking space for a new successful product or service. When a suitable opportunity is identified, its chances of success are assessed through market research.
Market research investigates the general attitude and approach of large masses towards one’s own and competitors’ products, rather than the goals of individual people. This view can be complemented with trend studies on general customer behaviour now and in the future, which are widely available globally.
More targeted market research aims to evaluate an already developed innovation that has been preliminarily commercialised, for example, with pre-marketing materials. This provides information on customers’ attitudes towards acquiring the product or service and related value propositions.
The market-driven approach is suitable when the primary goal is to develop a solution that, while similar in main features to a competitor’s product or service, is more desirable.
Human-centred product development
Human-centred innovation is based on a deep understanding of customer goals. The starting point of this work is the realisation that even the most streamlined business model or advanced technical implementation will not produce profitable business unless the product or service genuinely helps the customer achieve their goals.
Once customer goals are understood, a concept can be designed for a comprehensive product and service model and a value proposition can be built around it. This, in turn, serves as the framework for a business model that directly aligns with customer goals.
Sometimes, developing a profitable business model is not successful. In such cases, it is best to quickly acknowledge the outcome of the experiment and move on to the next idea. Abandoning an idea is not a failure but valuable information that the particular path is not worth pursuing further.
Innovation work done before starting product development is very cost-effective compared to later development efforts. Therefore, it is worth investing in achieving deep customer understanding.
It all starts with customer understanding
From the perspective of innovation work, the human-centred approach is superior. Broadly speaking, if a product or service does not help the customer achieve their goal, there is no reason for the customer to acquire or use it. In such a case, building a viable business model is not possible, nor is it worth investing in technological development. Conversely, even the most brilliant business model cannot work, and the advancement of technology is irrelevant if the customer does not want the product or service it delivers.
The importance of customer understanding in innovation work cannot be overstated. Therefore, it should be utilised and continually enhanced throughout the development process. This shifts the focus from human-orientation to genuine human-centricity.
The deeper and purer the customer understanding, the better it reveals innovation opportunities. It is important to remain open when acquiring understanding. Early commitment to a specific technology or business model almost inevitably leads to solutions based solely on them.
Digitalisation is a good example of this. It undeniably offers many great tools for achieving various customer goals, but it also limits the solution space. If the assumption is made to develop a mobile application during the acquisition of customer understanding, the end result will be a mobile application – regardless of whether another solution might have been better for the customer and business.
The best potential for success lies in a solution that most effectively enables the customer to achieve their goals.
This is precisely what underpins all world-changing innovations. Human-centred and open exploration and evaluation of solutions have repeatedly produced significantly better overall solutions for both the customer and the producer. This has simultaneously challenged the traditional laws governing the industry.
Sometimes the best solution may be merely a product or merely a service. Often, it is both. The most important thing is to develop products, services, and business models to serve the customer’s goal, not the other way around.
Edea’s Design Puzzle™ toolkit is a step-by-step process for strategic product development. We designed it to tap into the insights of the users, generate an in-depth understanding of their goals, combine it business insight and state-of-the-art technology enablers, and convert these all into a clear formula for success. Check it out!