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02/16/2009
Open Innovation and Customers Insights
Generating Groundbreaking Insights in 4 Steps
by Prof. Diana Derval (info@derval-research.com), September 19, 2008
Open and Cross-Industry Innovation - with the strong statement that all the smart people are not necessarily working within the company (Chesbrough 2003) – provides companies with a sudden research freedom that triggers many questions: In which direction to research? Which industry to observe? For which Return on Innovation?
Firms can generate groundbreaking insights with the Innovation Path 4i (Ardet and Derval, 2008):
1. Identity. Understanding Personas and their User Experience Chain. Answering the following questions is key to finding the right innovation path: Who are my target customers? What do I know about their profile, daily life, and expectations? How can I improve their User Experience Chain?
Fig. 1 - Example of Persona: Gary , e-Business Consultant
Gary is 32-years old and e-business consultant in a big consultancy firm.
He loves technology, challenging video games, high-end cars, good food and wines, and networking. He goes to work in his BMW with all the options. Between visits to clients, he likes relaxing at café terraces and hunting for the latest innovations at the MediaMarkt.
2. Industry. Observing successful industries along the User Experience Chain. BMW surprised the market when they introduced the iDrive on-board system in 2002. One single button commanding 700 functions is too complicated to use. Is this true for everybody? Probably not for Persona Gary , who masters the most sophisticated XBox joysticks. By observing Persona Gary ’s hobbies and User Experience Chain, BMW had the idea to collaborate with the gaming industry in order to make an intuitive and appealing ‘Gary-interface’.
3. Insight. Firms can evaluate the possible innovation paths in terms of business risk and R&D integration effort with the help of the Open Innovation Path Matrix (Ardet and Derval 2008).
Figure 2 - Open Innovation Paths Matrix (Ardet and Derval 2008)
§ Best Practice or Imitating Innovation. Firms imitating companies from the same industry are not innovating but gathering best practice. The TomTom lane guidance feature, for instance, introduced for the Go x30 series in March 2008, had already been available since 2007 on competitor Navigon’s devices. This approach should be conducted in the background in complement to a horizontal or vertical innovation path.
§ Horizontal Innovation. Firms look at how companies from other industries serve their current Personas. This cross-industry approach is less risky – refer to the BMW iDrive example above - and can lead to radical or business model innovation.
§ Vertical Innovation. Firms look at how companies in the same industry serve different Personas than their existing customers. This innovation path is riskier—as the new target Persona is unknown—and might require extra development cost to adopt the product. This approach is best suited for start-ups or business units, who have the room to shape their organization and business accordingly such as TomTom in 2004 with the successful launch of the first GPS navigation device affordable for all car-drivers and not only the Persona Gary.
§ Exploration. Firms look at what is done in other industries for other Personas. This hazardous cross-industry path should be conducted in the background as a complement to a horizontal or vertical innovation strategy. Nokia/NavTeq, for instance, organizes every year a Location-Based Services Challenge to encourage using Nokia/NavTeq maps in order to get some prizes and gain visibility. This is a cost-effective way for the company to generate insights.
4. Impact. Firms can measure the impact and Return on Innovation of each insight through an opportunity and feasibility study and focus on the most profitable ones. Firms that have an in-depth knowledge of their target Personas will identify winning processes along the User Experience Chain and generate groundbreaking cross-industry insights.
References
Ardet, N & Derval, D 2008, 'Wait Marketing Applied to Vehicle-to-X Communications: A Framework to Open Innovation', Marcus Evans, Innovation Excellence Conference, Stockholm.
Chesbrough, H 2003, Open Innovation: The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, Boston .
Derval, D 2008, Wait Marketing: Is it the right moment? DervalResearch, Amsterdam , and www.wait-marketing.com
The trademarks quoted in this paper are the property of their respective owners. Persona Illustrations by Vlad Kolarov for DervalResearch.
About the Author
Prof. Diana Derval, MBA, is the President and Research Director of the market research firm DervalResearch, specializing in new product development and commercialization, acclaimed" smart business of the year 2008" by L'Entreprise.
With her marketing vision and technological expertise, Diana Derval accelerated the development of leading and innovative companies such as Michelin, HP and TomTom. Author of the book «Wait Marketing», sold worldwide and translated in many languages, she helps major brands such as Danone, Philips, and Sara Lee build winning business strategies.
Diana Derval holds an Executive MBA from ESSEC Business School , a Masters in marketing and a degree in Software Engineering. She is Professor of Marketing and Management of Technological Change at the University of Wales MBA/Robert Kennedy College , teaches Marketing Strategy, Market Research, Marketing and Innovation at ESSEC Paris-Singapore Business School , and gives inspirational lectures and workshops from San Francisco to Tangier.
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