Myth 2: Successful innovations require large-scale, disruptive revolution.
Reality 2: The most successful innovations are often the simplest.
Disruptive innovative, as opposed to incremental improvement, is not typically achieved by asking customers what they want or need. Some businesses do not do formalized market research (focus groups, surveys, panels) to determine the “next big thing.” They do, however, use traditional market research tools to determine incremental feature improvements for the next generation of an existing product e.g., mobile phones. Truly disruptive ideas rarely emerge from asking people what they want because the answers are grounded in existing products as reference points. As Henry Ford famously said, “If I had asked people what they want, they would have said a faster horse.”
Historically, one element of Dell’s formula for innovation involves gathering requirements from tens of thousands of daily customer interactions. This grows from Dell’s “customer-centric” business model, a frequently cited company attribute. This yields a deep and differentiating understanding and response to customer’s stated requirements. While this has yielded sustained incremental innovations that address what customers request, Dell is now engaged in the process of disruptive innovation based on the next-generation capabilities of cloud computing. The company still listens to what customers want – even listening more intently than ever before. The resulting “pragmatic innovation” is important, but the larger emphasis is the development of solutions that transform how IT is delivered and consumed. The company’s approach to enterprises can enable customers to effectively shift their business models and processes to thrive in a dynamic and rapidly changing global marketplace.
“Faster better cheaper” is a traditional mantra for IT groups as well as for businesses in general. Yet, this race to the bottom is neither effective nor sustainable for producing long-term margins. Margins, after all, are necessary to support investments in R&D (gaining knowledge) and translating that into capital. Going back to the Henry Ford quote, he understood that people wanted a faster horse, but what they really needed was a better and faster mode of transportation. The skill set (or ability, or instinct) to properly articulate an underlying customer want into what customers really need is essential for delivering disruptive innovation. Furthermore, by correctly reading the customer challenge, you set the groundwork for marketing and messaging that will cause the customer to buy the disruptive solution. The more value that you can provide with your solution, the higher the price you can charge, with the resulting positive impact on margins.
Bringing disruptive innovations to the light of day is never easy, no matter how inspiring or world-changing the ideas are. Within recent human memory, “experts” have rejected the germ theory, dismissed the telephone and scoffed at the semiconductor. Success requires persistence and a well-conceived strategy for engaging with detractors to create a pathway for an idea’s success. You also must roll up your sleeves and dive into the hard challenges of execution. Most competitors still acting in the R&D-driven model of innovation and are caught up in traditional organizational/technical/process silos, which makes innovation difficult.