Searching for Needs is the Best Innovation Strategy

By: Gijs van Wulfen

Is it possible that only a quarter of all companies are highly effective at the front end of innovation? If so, what kinds of companies are most successful at the ideation and conversion stages? Gijs van Wulfen describes three different kinds of companies and suggests the Need Seekers strategy offers the greatest potential for superior performance in the long term.

Strategy&’s annual global study of R&D spending reveals that successful innovators bring clarity to the early stage of innovation. It’s when companies generate ideas and decide which ones to develop.

Just 43 percent of participants said they were highly effective in generating new ideas. And only 36 percent felt the same way about converting ideas to development projects. Altogether, only a quarter of all companies indicated they were highly effective at the front end of innovation. Which is a shocking conclusion.

There are three fundamental innovation strategies. You can categorize companies as Need Seekers, Market Readers, or Technology Drivers. Strategy& describes them as follows:

1. Need Seekers, such as Apple and Procter & Gamble, make a point of engaging customers directly to generate new ideas. They develop new products and services based on superior end-user understanding.
2. Market Readers, such as Hyundai and Caterpillar, use a variety of means to generate ideas by closely monitoring their markets, customers, and competitors, focusing largely on creating value through incremental innovations.
3. Technology Drivers, such as Google and Bosch, depend heavily on their internal technological capabilities to develop new products and services.

The Strategy&’s study confirms that following a Need Seekers strategy offers the greatest potential for superior performance in the long term. Fifty percent of respondents who defined their companies as Need Seekers said their companies were effective at both the ideation and conversion stages of innovation compared with just 12 percent of Market Readers and 20 percent of Technology Drivers. These are the same companies, by and large, that consistently outperform financially.

So need seeking is essential, because a good innovation is a simple solution to a relevant customer need.

But what does a need look like? I like to inspire you with 10 relevant needs and innovative new products or services solving them.

Need & Problem	Solution
Consultant: I need new assignments. How do I expand my business network in an efficient way?	LinkedIn
Music lovers: I love to listen to music (for free) but I hate to be a pirate downloading it illegally.	Spotify
Consumer cleaning: I sick and tired of a bad performing vacuum cleaner	Dyson cyclone vacuum cleaner
Consumer: Is this bed clean and free of bugs I can hardly see?	The Bed Bug Detective
Snow boarder: I like to go down hill fast but I am afraid for nasty accidents.	The Katal Landing Pad
Consumer painting: If there is one thing that really annoys me, it’s cleaning used brushers and rollers.	Dulux PaintPod
Green consumer: I hate spilling water and money flushing a toilet.	Brondell Perfect Flush
3rd world: due to flooding we lack clean drinking water.	Filtrix Filterpen
Full time mother: Now the kids are getting bigger, I like to re-enter the workforce, but who is waiting for me out there?	Work4Women
Green consumer: I love to celebrate Christmas with a real tree, but don’t like destroying nature.	Lease a living Christmas tree

As a good customer understanding is essential, how do you discover relevant unmet needs? And how do you incorporate need seeking in your idea generation process? A good example of an innovation process incorporating the discovery of user needs is the FORTH innovation method. Step two in this structured expedition is called ‘Observe and Learn’. It focuses on finding concrete customer needs, using ‘tools’ like personal visits, focus groups, web searching social media and crowd sourcing techniques. You can download the innovation map of the FORTH method for free.

I wish you a lot of success becoming an effective need seeker.

By Gijs van Wulfen