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    User-generated innovation

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    Know what your customers are thinking. In this hyper-connected world, it’s not difficult. So what’s the problem?

    If there is a statement that is beginning to irk me beyond tolerance this year it is that ‘Australian companies fail to innovate’, or derivatives thereof.

    OK – by various global measures there may be some truth to this, but I’m beginning to believe that if we actually spent as much energy innovating as we invest in talking about our failure to do so, we might start to eliminate the problem.
    As much as it bugs me, it is a topic that is hard to ignore. Hence, it was interesting a few months back to have a meeting with Bruce Burton, who runs the Australian practice of a small-ish global consulting group called Strategyn.

    Bruce’s consulting group is organised around the somewhat obvious – but surprisingly rare – principal of outcome-driven innovation. That is, Strategyn has created a defined methodology intended to identify and address unmet customer needs, by working with customers to define what those needs are. The company has been engaged by a wide range of global organisations, including Microsoft, Johnson & Johnson, Motorola and Bosch, to create new products and services that the companies themselves may not have been aware existed.

    Who better to know what your customers are willing to buy from you than your customers?

    Alas, many businesses have become used to telling customers what they should do, based on the business’s own financial goals (free-to-air television networks are one of the clearest examples – that consumers continue to tolerate their antics amazes me). History has shown that as new choices open up for consumers, you can expect them to move on.

    While the methodologies of Strategyn may be outside of the budget of many smaller Australian businesses, there is no reason that they can’t adopt similar principals when developing their own innovation pathways.

    Strangely, however, engaging with customers seems to be just about the last thing that many Australian businesses are interested in doing. This is highlighted by the almost universal reluctance for traditional businesses to engage in many of the forms of dialogue made possible today through Web 2.0 technologies, most notable being blogs and discussion forums.
    I’m also amazed at how little research many start-ups do in determining their own market opportunity.

    Some very simple questions – such as ‘how big is the market opportunity’, ‘what are the alternatives’, and ‘how much will people be willing to pay’ – get glossed over as entrepreneurs rush into the development phase of The Big Idea (no wonder many venture capitalists get annoyed at the quality of the supporting evidence that entrepreneurs bring with them when seeking cash).

    But the problem is just as great within established businesses. Having recently chaired a panel on user-generated content and social media tools for the Australian Interactive Media Industry Association, I was reminded by the audience of how fearful many businesses are of giving a voice to their customers.

    In many cases I believe that marketers are actually afraid of hearing what customers really think of them. Marketers have spent their life shouting at customers through television commercials, print advertisements and billboards, and taking feedback through the sterilised environment of market research. Heaven forbid those consumers should start talking back in an open and honest forum.

    I’m not sure who said it first, but this definitely holds true: you’re customers are already talking about you. They are doing it at barbeques, in the office, and when they get home at night. They are whinging about your service or praising your new features.

    Wouldn’t you rather be able to listen in to those conversations? Mightn’t you like to be able to answer back every so often? But ultimately, wouldn’t you like to be able to capture that knowledge and feed it back into your research and development, and meet the needs of customers that you didn’t even know they had?

    Listen to your customers. I can guarantee that they will be more willing to send business your way if you do.

    Brad Howarth is a journalist and author of Innovation and the Emerging Markets: Where the Next Bulls Will Run, a study on the challenges facing small Australian technology companies. You can read his blog at lagrangepoint.typepad.com

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