Tips From an Innovation Guru
Entrepreneurs generate the lion’s share of new ideas in the U.S. But big brands — aided by invaluable insights from innovation consultants — launch the greatest number of profitable new products. What accounts for the disproportionate success rate?
I caught up with Sohrab Vossoughi, named by BusinessWeek as one of the top five innovation gurus in the U.S., to ask how his innovation and design consultancy, Ziba, guides some of the world’s biggest brands toward innovation success stories — and how small-business leaders can put the same principles to work.
Innovation: The risk/reward calculus
“Innovation is what companies do, but it becomes useful only when it results in meaningful value to consumers,” Vossoughi says. “Ninety percent of products fail because they’re not based on the grounded desires of consumers. Successful innovation makes a meaningful promise: ‘I know what you value and this is what I’m going to do for you.’”
Getting there is no cakewalk. The risks are steep, the stakes are high, and only a miniscule percentage of ideas — even patented inventions — result in new products, with most new products never turning a profit. But when they do, the rewards are rich.
Successful new products propel sales. They provide a bridge into new categories when a company’s core category is in decline. They open new distribution channels. They allow businesses to adapt to changing market tastes and trends. They generate buzz. They keep established brands young and competitive.
Improving the odds of innovation success
From its headquarters in Portland, Oregon, and offices in San Diego; Tokyo; Taipei, Taiwan; and Shanghai, China, Ziba helps innovators find “that sweet spot where the soul of your brand overlaps with the soul of your target consumers.” How does the company do it? I asked Vossoughi to provide 15 minutes of advice, and here’s what he had to share:
Business on Main: What’s the least innovators need to know?
Sohrab Vossoughi: You need to understand your customers and have empathy for what they need, desire and value. Address their values and you’ll win their purchase. Move beyond their fundamental needs, and you’ll win their hearts and minds.
Innovation must be consistent with the DNA of your business. It must be believable within the promise customers already believe your business makes and keeps.
You can’t innovate for everybody; that always results in failure. Innovate for the customer you have and know.
You say innovators must be truthful. What does that mean?
Innovators need to be truthful when they answer such questions as, “Is this aligned with the expectations customers have for the products and experiences our business offers? Is this aligned with the promises we’re known for? Is it truly valuable to our customer?”
In today’s economy, do certain kinds of offerings generate more success than others?
At all times, you need to ask, “Is this the right time for this offering?” Trends affect value systems and open opportunities, and they must be taken into consideration.
How do social networks and customer interaction fit into the innovation process?
They’re co-creation tools that allow you to get information about your customers’ unique wants and needs so you can then synthesize what you’re hearing and what it means, making a connection between customer values and new product designs.
Can a business fuel success by altering an existing product rather than creating an altogether new one?
There’s a difference between extracting and adding value. Extracting value from another offering leads to incremental and superficial change — change that’s literal versus fundamental. Consumers don’t buy that as meaningful.
Finally, what’s the biggest mistake that innovators should avoid?
The same thing that makes innovation successful gets innovators into trouble: excitement. If all the excitement is driven from inside the business, there isn’t enough understanding of what will excite the customer. That’s how most innovators get their expectations off track, and why they end up trying to sell to someone who doesn’t value what they’re offering.
It comes back to understanding the customer you’re going after and addressing that person’s needs and desires through the value proposition of your new offering. It comes back to understanding yourself, the DNA of your business, and what innovation is believable within the promise of your brand.
© Business on Main