Why Creating Value is More Important than Building Products

Truly, having the best product is not necessarily a bad thing. Yet the best does not always become commercially viable. There is a litany of great products that never achieved commercial success. IBM's OS/2 is one example. It was largely lauded by many critics as being better than the competition, but when it came out, it was up against Windows 95. Guess who won, despite being considered an inferior product?

Alternatively, product-based companies may also look for innovative ways to solve specific market needs, even though the market may not be ready for such solutions. The Segway, a revolutionary transportation product, is an example of this type of product-centered innovation.

The key to success is not to build solutions in a vacuum, but instead to create solutions that the marketplace will value.

One of the best ways to discover what your customers value is to ask them. As you might imagine, this is actually more complicated than it sounds. Paraphrasing Henry Ford, if the Ford Motor Company simply asked their customers what they wanted, Ford would have made faster horses. Therefore, you have to be diligent in your search for what your customers really value.

The opposite approach, creating solutions that seem like they solve problems, is equally likely to fail in the marketplace. There are examples of those that get lucky—PostIt Notes being the most popular example—but most products created under the guise of pure innovation are not commercially viable.

The answer to the question above is that innovation comes from both creativity and process. The famous quote "necessity is the mother of invention" is apt here. The process will define the necessity. It will define a price the market will bear; it will create boundaries for the solution in terms of resources, time constraints, actions from the competition, and other variables.

All of these things create the "innovation zone." Within the boundaries of the innovation zone, a solution is possible, and it will take creativity and intelligent thought to discover exactly what it is. This is similar to the innovation of sliced bread that every "great" thing gets compared to. The innovator of sliced bread didn't invent bread, nor did he invent slicing. What he did was understand the need, the boundaries of the problem, then married two great ideas into one innovative solution.

Many organizations, when creating an innovation initiative within the company, focus on the creative, feeling that process will destroy the true spirit of innovation. I disagree.

Good process, especially in market research and requirements gathering, will not only help you create more profitable solutions for both the organization and its clients, but it will also help package and message the offerings.

The information gathered during the process can be used as a way to create a list of offerings your customers want, but also how to use that information to create:

—Articulate and consistent messaging
—Customer demand for your offering before it's officially released
—Quicker profits with reduced costs

If you would like to learn more about our methodologies on defining customer wants, please complete this form to download a free sample of one of our Marketing Tools & Diagnostics, "Creating Solutions Through Needs Analysis."

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