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Pick innovations customers really want

Stephen Chambers

Keeping up with advances in digital technology in terms of what your customers actually desire and need is a growing challenge for many companies, write Jeanne W Ross, Cynthia M Beath, and Martin Mocker for MIT Sloan Management Review.

In a climate where technical possibility is moving constantly and rapidly, it’s important to keep on top of the myriad offerings – such as apps, analytics, AI and connectivity – that could be the right fit for your organisation and your consumers. 

But it’s a task many companies find tricky. The authors studied around 200 businesses globally and say the most digitally successful organisations employ three key ways of finding their best offerings:

1) The trial-and-error approach. Larger and older companies find it particularly hard to adapt to an ever-changing menu of digital services and devices. Their traditional methodology is not geared towards rapid experimentation or swift decisions to reject or embrace a new project before too much investment is made. Being able to embrace and drive forward a new trial-and-error course separates those who succeed and those who struggle. 

The beauty of digital is the speed and adaptability its software foundations allow. New products can be trialled with customers in their infancy, tweaked and polished as they develop, and rejected early on in the process if they don’t make the grade. 

The authors say this approach encourages experimentation through “hackathons, special funding opportunities, and new organisational units like innovation centres dedicated to digital experiments”. 

Toyota Motor North America (TMNA) has pushed this plan of action in several ways:

  • an innovation fair where employees share their ideas and pitch for funds to get them off the ground;
  • a Kickstarter-style app for individuals to post basic ideas and get feedback;
  • supportive backing for the most promising ideas from the director-level Toyota iCouncil who have the clout and budget to move things forward.

These initiatives have spawned successful customer apps as well as changes in vehicle systems for in-car safety, GPS and entertainment.

2) Inviting customer input. Your expectations of what customers want can stray way off the mark if you are too hasty and don’t ask them directly.

“A number of business leaders in our research (particularly in B2B contexts) noted that customers were slow to warm up to what the companies had assumed would be compelling value propositions,” say the authors.

Getting customers involved earlier on in the process is the key. To ensure this:

  • launch a “minimum viable” product online and make a detailed analysis of customer feedback before increasing investment, and
  • target individual B2B customers to test run early versions on new digital offerings.

Dutch firm Royal Philips – previously a lighting and audio specialist – needed to harness new digital strategies when it shifted its focus to the complex-healthcare market and to products like CT scanners and X-ray machines.

Holding co-creation workshops with customers, patients and insurance companies – dubbed HealthSuite Labs – allowed them to pin down the most urgent needs that organisations would invest their money in.

“The multidisciplinary and collaborative approach of the workshops helps groups come up with ideas to improve the overall health care system rather than just the outcomes of a single stakeholder,” say Ross, Beath and Mocker.

3) Using cross-departmental talent. Successful digital development requires broad-reaching perspectives to understand what makes customers buy into a new product or service.

Bring together people from different teams – for example, design, product management, technology, sales and services – to share their expert knowledge and find powerful, specific answers.


The authors use Schneider Electric to illustrate a large traditional company that had a wobbly start to massive digital transformation – shifting from iron, steel and electrical equipment producer to cost-effective, sustainable and secure energy manager.

Pockets of digital innovation started happening across the company, but were failing to progress usefully. Employing the key strategies above, the French business also developed a “Digital Services Factory”. It takes digital offerings from idea stage, through incubation and mechanisation, to activation and assessment, discarding those that don’t work en route. It now has more than 40 tried and tested digital offerings. 


It takes wisdom and bravery to step away from long-established development methods and embrace an experimental, repetitive trial-and-error alternative, but that is the road digital treads most successfully. 

“Conducting digital experiments is like betting a tiny amount on all the horses in a race and then having the option to increase any bet at various points during the race. There is no need to make a big bet until the winner is almost certain,” say Ross, Beath and Mocker. 

Source Article: Find The Sweet Spot Between What Technologies Can Deliver And What Your Customers Need
Author(s): Jeanne W Ross, Cynthia M Beath, and Martin Mocker