In my discussions with business leaders across multiple industries, the need for “innovation” seems to be in vogue these days. I don’t know if it is a sign of the recovering economy and the results of cutbacks in research and development during the downturn, or if innovation is just the newest buzzword or fad following the likes of “synergy,” “bandwidth,” “transformational,” and my personal favorite, “out of the box.”
As I began to hear the word “innovation” used more and more in conversations, it sparked a desire (dare I say, obsession) with a need to know more. Now, I am no stranger to innovation. In fact, I have enjoyed participating in a number of truly innovative initiatives over the years, including the reinvention of the Hampton Inn brand and the conceptualization of the Home2 Suites by Hilton brand during my time at Hilton Worldwide. So, my study on the topic was based on some real world experience with the concept.
After reviewing the most recent literature on the subject, studying some of the current best demonstrated practices and mixing in my own past experience, I am convinced more than ever that “innovation” is not magic—at least to the magicians. I say that innovation is not magic because there is a process by which any organization systematically can become more innovative. The magic, of course, is in the execution of the process.
First, let’s look at a definition. Innovation is “the creation of better or more effective products, processes, technologies, or ideas.” Innovation is NOT the same as invention. Invention is the creation of the idea or method that did not previously exist whereas innovation takes what is there and makes it better. Invention is more truly magic, while innovation is more like illusion. Innovation, since it uses existing products, processes, technologies or ideas as its foundation, is well suited for a process or methodology.
The key to successful innovation is to be “outcome focused.” Improve customer outcomes at key touch points by focusing on understanding exactly what your customers want to accomplish (the benefits) at a given touch point. Then focus on discovering ways to improve how the customer obtains these benefits and what their feelings, emotions, etc. are at the outcome.
As such, I submit to you the following seven-step methodology of innovation:
1. Create a customer experience map: Identify customer touch points with your product/service.
2. Identify customer outcomes: Using your customer experience map, outline what the customer wants to accomplish at each touch point by customer segment.
3. Determine the current state: Conduct customer research to validate your findings and uncover unmet customer needs.
4. Prioritize: Find the areas on which to focus.
5. Test: Try your new innovations in a controlled setting.
6. Implement: Put your new innovations into practice more widely.
7. Measure and adjust: Always be flexible to make adjustments.
Now that you know the overall process, let’s take a closer look at each individual step:
Create a customer experience map
Customers interact with your organization in a variety of ways and in a number of places during their “purchase journey.” Further, they have an end in mind at each stage of their experience with your product or service. They do not value your solution so much as they value the end results they achieve. You will find it helpful to create a graphic showing the customer journey—shopping to selecting, pre-purchase communication, interaction with your product or service after purchase, billing, and post-purchase communication are types of touch points that you might consider analyzing. Understand and “draw” how and where your organization touches your customer—and where you customer is looking to solve a problem.
Identify customer outcomes
At each touch point, identify what the customer is trying to achieve—and then how you might improve it. Improving customer outcomes, in most part, can be categorized in one of three ways:
1. Increasing the speed at which the job is done (i.e. faster).
2. Improving the quality of the end result of the job (i.e. better).
3. Minimize cost—paying for more than needed or the total amount paid (i.e. cheaper).
Here you might elect to create a table with the identified outcomes by touch point by customer segment. Then, brainstorm the opportunity to impact the outcome by the three categories of “faster, better, cheaper” (minimize time, increase quality and minimize cost).
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Determine the current state
This step involves conducting research including customer surveys, competitive analysis, etc. It is critical when conducting your consumer research that you ask both quality and speed outcome statements (Does XX happen fast enough? Have you purchased XX of higher quality elsewhere?). Also, ask your customers to rate the importance and satisfaction with current outcomes. This will be critical information for the next step.
Identify highest priority opportunities for innovation using an “opportunity quadrant.” This is simpler than it sounds. Plot the outcome data you collected from your customer surveys in a quadrant where one axis is the importance of the outcome (from not important to very important) and the other axis is the current level of satisfaction with the outcomes (from very dissatisfied to very satisfied). Focus and prioritize your efforts around those outcomes of highest importance and lowest satisfaction. This is where the low-hanging innovation fruit exists (OK, my apologies for the overused jargon). Now you’re ready to develop new ways of using existing products, processes, technologies or ideas to create improved (faster, better, cheaper) outcomes for your customers. Keep your focus on the customer’s outcome!
Test, implement, measure and adjust
Not to diminish the value of steps five through seven, but this is a column, and I’m running out of space! Run tests on the various options you selected from the prioritize phase and measure your results. Based upon the results, select the appropriate innovations for broader implementation. Don’t forget to create a communications plan outlining the “Why we’re doing this, what’s in it for you and what’s in it for our customer” to those involved in the implementation and delivery. Again, measure your results—and make adjustments as needed to maximize the benefit of your innovation.
Innovation is not the same as invention. Innovation is improving what already exists, which means measuring outcomes and focusing your resources and efforts. Stay focused on outcomes from your customer’s perspective, follow this step-by-step process and you’ll be well on your way to learning the “magic” of innovation.
Until next time, remember: Take care of the customer, take care of each other, take care of yourself!
Jim Hartigan, chief business development Officer and partner joined OrgWide Services, a learning, communications, surveys and consulting firm in April 2010 after nearly 30 years experience in the hospitality industry, including the last 18 as a senior executive with Hilton Worldwide. Jim brings to OrgWide a reputation for driving change through improved business processes and developing comprehensive strategies that streamline operations, drive brand awareness and preference, and increase customer satisfaction.
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