Customer input to the innovation process can range from non-existent or reactive up to proactive. The level depends on the company culture and its history/success with past innovations. Proactive customer involvement provides the best atmosphere for successful innovation.

The customer anticipation pyramid is key to innovation success. As Wayne Gretsky said ” I always skate to where the puck (customer) is going to be, not where it is now.”

At the bottom of the pyramid are internally-focused, closed-loop companies that produce what they want and place it into the market channel, without customer input. Think of Henry Ford in the days of the Model T, who said “They can have it in any color they want, as long as it’s black.” He took this approach because black paint dried faster, and that meant he could produce more cars. But it didn’t take into account what customers wanted, which was a variety of car colors.

Moving to the middle of the pyramid is the more typical externally-driven organization whose product development and innovation strategies are based on what the customers “say” they want. While listening to the customer is always encouraged, the customer is frequently absorbed with his own needs and desires and not your profitability. Do the customers’ ideas lead to sustainable profits? Are these ideas or products that can be used by other customers in other market or industry segments? What’s the wider market for a specific customer-driven idea? Is it complementary with your business strategy? Unless there is a great customer partnership and historical success, the reactive approach doesn’t address innovation from where it should originate.

The top of the pyramid is one of the best positions for innovation success and longevity. Innovation that is driven by proactive leadership through studying customers in areas such as market, technology, and competitor sensing can create demand that doesn’t currently exist. This data mining looks at questions such as:

  • What are we good at that our competitors are not that potential customers would see?
  • What problems and frustrations do our current customers face that we can address?
  • Who can we partner with for an innovative offering to expand the customer base into a new market (open innovation)?

If one stays at the base of the pyramid, tunnel vision sets in. As you move up the pyramid, the perspective and potential opportunities increase. Unfortunately, it’s not always that easy to climb a pyramid.