No one today would argue the importance of a consumer/customer focus in driving innovation. Yet in today's 'open innovation' environment, where companies are searching externally for technologies and solutions from startups and elsewhere, the age-old question of consumer driven vs. technology driven takes on new importance. I still often get asked about whether companies should start with identifying needs and then search for technologies that address those needs.... or identify compelling intellectual property and then match them with unmet consumer needs which can be solved?
My answer? Yes.
What I mean by this non-answer is that the question implies a linear approach of first "A" then "B". Innovation, especially breakthrough innovation is an iterative process. The process you use for incremental product and service improvements will seldom work for real breakthroughs. Your company may do all of the right consumer interviews and observational research to identify compelling unmet consumer needs. Yet in spite of this excellent work, you may not be able to develop or source a compelling solution, or perhaps the competitive environment won't provide the opportunity to introduce the innovation into the market... the time just may not yet be right.
Rather, companies should be continually scanning for technologies, consumer/market trends and marketplace opportunities. To me, it's all about finding and exploiting the intersections between unmet needs, enabling solutions (e.g. technology) and marketplace opportunities.
It's at these intersections that compelling and winning innovation lies. And to me it's not about where you start, it's about ensuring that you're truly finding these intersections. So, if you dream up or run across a breakthrough technology or unique idea that's great. Just be willing to step back from it at that point and validate the idea objectively against the consumer/problem and the market opportunity.
All that said, I'm still a believer in creating a deep understanding of consumers and their needs in searching for strategic innovation opportunities. Think of it as 'creative fuel' for your innovation efforts. With this fuel, you'll see potential technologies and solutions through a more clear lens and increase your chances of creating really big ideas. Just don't expect your technology scanning to solve the problem you've set out to solve. As Louis Pasteur once said, "Chance favors the prepared mind". And I'd add... an 'open' mind.
(This post is an update to a previous very popular blog entry on the same topic)