This document discusses how to keep an innovation pipeline full by accurately defining customer needs. It emphasizes identifying the "most important customer" in the value chain and using open-ended interviews to understand unmet needs. This helps prevent new product ideas from solving the wrong problems. The document provides a framework for contextual interviewing and analyzing feedback to clearly define customer needs prior to development.

1. Innovation Pipeline
How to Keep the Front End Full
Bruce Janda
IRI emeritus Member
September 15, 2014

2. E. Wolf
20May2014
Innovation
Need Capability
Delivery
Technology
Development
Integration
Adaptation
Invention
Discovery
Creation
Opportunit
y
Market
Influencer
Consumer
Purchaser
Offering
Product
Service
Channel
Commercialization
Brand
Message
Price
Performance
Promotion
Quality Lifecycle
Features
Desire
Maintainer
Financier
Application
Solution

3. Successful Innovation
Combines Need, Capability
and Delivery
“Innovation isn't about finding a novel solution, but in more accurately defining the right problem.
Understand the problem, & the solutions become almost obvious.”
“If you don't accurately define the right problem, the best you can hope for is to solve the wrong
problem, very well.”
“So much of what people call innovation is little more than brainstorming on new features without real
purpose.”
Oftentimes, these design ideas force the company to sell what they build instead of building what
customers need.”
“Companies typically expend great efforts in time & resources to brand, position, message & spin a
product to make it sell.”
“Solve the right problem, & there is much less marketing required to gain market share.”
Larry Marine, President, Intuitive Design

4. Henry Ford
probably didn’t say this, but…
"If I had asked people what they wanted, they
would have said faster horses."
• In 1921, the Ford Motor Company sold about 2/3 of all the cars
built in the U.S.
• By 1926, this share had fallen to approximately 1/3.
• And in 1927, when Ford belatedly brought the Model A to the
market, that percentage fell to about 15%.
My conclusion: Ford was great innovator but he
quickly lost touch with his customers

5. Market Research and Feedback
“VOC ≠ voice of competitor” Graham Jackson VP R&D
AstenJohnson
• Customer Survey
• Consumer Attitudes or Market Size
• Call Center Complaints/Credits
• Sales Call Reports
• Unsolicited Comments
• Evaluative Research
compare alternatives/confirm acceptance
HUT home use test, CLT central location test, Focus Group
• Generative Research
Generate new ideas
Identify unmet customer opportunities

6. Contextual Interviewing
Acquire and Apply Customer Input
Summary: Value Innovation Works provides a 10 step
process to bring the fuzzy front end of innovation into
focus. The key is identifying the “MIC” or most
important customer in the value chain and using textual
interviewing to get at the unmet needs to create a blue
ocean opportunity with compelling value
Theory Application

7. Clear Need Identification
Prevents Pipeline Plugs
1. Most Important Customer
2. Open Ended Questions
3. Graphical Data Organization
Clear Customer Need
Definition
• Prioritization
• Resource allocation

8. Most Important Customer
in your value chain
Get the right feedback!
1. B:C  Probably ultimate consumer (merchandising
mgr.)
2. B:B  not so easy! Probably not the entity buying
from you
• Can your distributor give expert input on unmet needs of the
true decider? Who loses sleep over how your product
works?
• Most Important Customer: 3 Lean Questions
1. Who has to fix the problem?
2. Who loses financially?

9. 9Copyright, Value Innovations, Inc 2004-2014 All rights reserved
Manufacturer of
automotive parts
Distributor
Jobber
Auto dealer or
Repair Shop
Consumer
North America
Manufacturer of
automotive parts
Distributor
Auto dealer or
Repair Shop
Consumer
Europe
B2B
Most important customer in value chain

10. Copyright Value Innovations, Inc. 2004-2013 All rights reserved
The 3 Question Template
Who has to fix
the problem?
Who stands to
lose
financially?
Who sees
the Value?
Distributor
Purchasing
Sales X X
Marketing X
Manufacturer
Purchasing X
Operations XX XXX XX
Logistics XX XXX XX

11. Copyright Value Innovations, Inc. 20040-2013. All rights
reserved
11
The 1st Rd Instrument
Open Ended Question Examples
Start at the highest level (e. g.,)
 What are the issues keeping you awake at
night?
 What are the critical issues you’ll face over
the next 3 to 5 years in your job?
 What changes to you expect to see in the
next 3 to 5 years?

12. Copyright Value Innovations, Inc. 20040-2013. All rights
reserved
12
The 1st Rd Instrument
Power Lead-Ins
 What has been your experience…
 How have you successfully used…
 What is the determining or deciding factor
when…
 What makes you choose…
 What is the one thing you would improve
about…
Do NOT start off discussion with your products and services

13. Copyright Value Innovations, Inc. 20040-2013. All rights reserved 13
The Golden Rules
Don’t ask “What do you need?”
 Interviewees don’t know what they don’t know
 Interviewees don’t know what you could do
 As soon as you ask, what do you need? …… you’re
back to the world of incrementalism
“If I had asked them what they wanted,
I would have made…….faster horses”
Henry Ford

14. Low Hig h
Exercise Program s
Total Num ber
Ipod
No = 0, To Speakers = 2.5, Data = 5
Speakers
No = 0, Yes = 5, Prem ium = 7.5
Connectivity
No = 0, USB = 5, W ireless = 10
Fan
No = 0, Yes = 5, Prem ium = 7.5
Console Looks
1-10 Subjective
Screen Size
Sm all = 2.5, M ed = 5, Large = 7.5
Interface
1-10 Subjective
Tracking
No = 0, Yes = 5, Prem ium = 7.5
Reading Rack
1-10 Subjective
Brand
NLS Survey PM '11 Unaided %
0.0 2.8 5.5 8.3 # #
Cardio Consoles
Value to Consum er/UserNautilus Draft 3
6
7
8
9
10
11
1
2
3
4
5
20
No
No
Yes
6
Small
No
7
Speakers
Prem
Prem
9
Lrg
Yes
7
Schwinn 840 To Be