The pictorial quote “Culture eats Strategy for Breakfast” makes an important case in point: There’s nothing as powerful and decisive for innovation success than the culture of a company. Companies like Google or Adobe are widely praised for their innovation culture (whether the daily practice is truth or myth is somewhat irrelevant for our argument ?). Many others try to follow their example to incite a similar kind of innovative spirit. Scientific studies such as the benchmarking innovate! new conclude that a strong innovation culture is a critical success factor for innovativeness.
Now, what have you done so far to strengthen your innovation culture? Have you ever questioned if your innovation culture is customer–centric enough? In this article, we would like to offer a four–step guide to establish a stronger, more customer-focused innovation culture.
Let’s start with some groundwork: Culture can be defined as a set of shared beliefs and values of the members of a system. Innovation culture then is the set of beliefs and values related to a company’s power to innovate its products and services, and to renew itself: its way of (collective) thinking, its processes, its attitudes. Culture can indeed be “managed“: successful companies know the importance of a culture of innovation and take deliberate measures to strengthen it.
Google, for example, provides amenities for the employees like sports offers and free catering, to create a pleasant atmosphere that encourages innovative ideas. With the famous and much-discussed “20%-Time” project it really makes a difference in innovation culture: every employee is allowed to dedicate one day per week to a topic that is important to him or her. Employees get paid regardless if their project is work-related or of purely personal interest. Another example for a successful measure to strengthen innovation culture is Adobe’s 1.000 innovative experiments campaign where the company funded ideas from their employees – no questions asked.
Not in every company google-style amenities for employees will automatically lead to a more innovative spirit. More spare time does not always lead to extraordinary ideas and what is more, not every idea coming out of such initiatives will have market potential. Although the initiatives described above are viable for some companies, from our point of view, the most critical step in developing a culture of innovation is to strengthen customer-centricity throughout the whole organization – from every single employee up to the top management.
Innovation is not an end in itself, innovation is a means to create value for customers. Growth only happens when customer value is created in a sustainable and future-oriented manner for the company. Therefore, what is needed is a culture that consistently puts customers and their needs at the center – a customer-centric culture of innovation. Let’s take a look at the steps it takes to develop a customer-centric innovation culture.
Culture is what happens between people, it’s like a “glue” connects people in a larger structure. How can culture become a strong and effective glue, if people in an organization disagree on what a customer need is? Having a common understanding is a basic prerequisite for a strong culture, as Marco de Polo from Roche Diabetes Care outlines:
“One of the most important effects on the innovation mindset is that we now have a common language to define what a customer need is, within our organization. And that’s been a struggle in the past. I always say: ‘How is it possible that an organization can deliver value to the market if value hasn’t been defined?’ […] So, it’s really about language and alignment in the organization!“
Who is my customer (in JTBD language: the job executor)?
Who in my customer ecosystem has which job-to-be-done, that I want to address?
ODI and JTBD thinking helps find a common definition of what a customer need is in the context of the addressed market, and what the difference between a met and an unmet need is. It also helps understand what value metrics customers use, and recognize if and how a company can address important problems for them.
Once customer needs are defined clearly and unmistakably, communication between different departments such as marketing, product design and research & development will work without loss of meaning. Speaking the same language therefore is a basic requirement for creating a common culture for everyone involved in innovation.
The next step is to build empathy for the customer in an organization by seeing the world through the eyes of a customer – simply put it is all about falling in love with the customer’s problem. This step requires a change of perspective: it’s about a new way of thinking, putting the customer – and not the product – in the center.
Customer empathy means that an organization not only knows all the unmet needs of a customer segment, but also understands the WHY behind. So, for example for each of the identified underserved needs in the Outcome-Driven Innovation® (ODI) process, you need to understand why it is underserved, under what circumstances it is underserved, and what the customer is doing today to work around the problem.
When implementing an ODI project, this step is called context analysis. Context analysis is not only essential to identify potential for concrete product and service innovations, but it also creates an implicit organizational knowledge about the customer, that cannot be copied by competitors and is permanently valid – a real core competence.
With steps 1 and 2, we have created the foundation of a customer-centric innovation culture – steps 3 and 4 are about shaping the future.
A corporate innovation culture gains incredible strength when it is nurtured by a strong vision. A vision works like a “north star” for your innovation teams. The customer’s job-to-be-done helps find a vision that drives and inspires teams while being rooted in the current market.
Here is an example for a job-based vision: “Helping people improve their quality of life besides improving medical outcomes“. The advantage of a job-based vision is that it can be broken down to different “flight levels“. The vision described above can be concretized as “Managing diabetes in daily life“ or even more concrete as “Keeping blood sugar level in range”. Breaking down a vision into concrete innovation goals makes it tangible without losing its motivational power.
A job-based vision also helps avoid a phenomenon called “tribalism”. Eric Eskey from the innovation consultancy Strategyn explains the phenomenon in his blog article about innovation culture. Tribalism means that there are groups within an organization pursuing different goals, or pursuing the same goals with different beliefs and measures.
A classic example for “tribes” are the rather market-driven vs. the rather technology driven departments, having their own mindset, beliefs and dialects or even languages of innovation (remember step 1, which already helps to sort this thing out!). Tribalism tends to weaken a company, while a common vision supports everyone to contribute to a common goal and pull together (read Edizon’s alignment blog to learn more about what JTBD can do to align your organization).
“Ironically, in a changing world, playing it safe is one of the riskiest things you can do“, says Reid Hoffman, internet entrepreneur and co-founder of LinkedIn. Innovation culture means embracing change. But change is, again, not an end in itself. It is very important that it does not happen in an unregulated manner, but along a guideline, with a compass. What is needed is a framework that guides change safely.
Again, the Jobs-to-be-Done Framework offers this guideline, as jobs naturally evolve to become supported in a more complete and more comprehensive fashion over the course of time. Knowing today’s customer’s underserved outcomes around a certain job-to-be-done, and developing products and services to serve them better is the first step into the future.
One and the same job-to-be-done can be viewed from different “flight altitudes/levels”, opening up different spaces for innovation and strategy formulation. For example, medical device company Roche Diabetes Care could choose to formulate a JTBD rather narrowly as “Keeping blood sugar levels in a desired range” – the result will be more towards incremental innovation. Or it could choose to formulate the same JTBD more broadly as “Managing Diabetes in daily life” – in this case the “innovation horizon” opens up towards more radical innovation. But even for these radical innovation strategies, JTBD also helps to reduce much of the risk and uncertainty, as the customer’s job works like a map that offers direction on your innovation adventures.
Change – yes embrace it, but in a planned and controlled framework!
The four steps described in this article cannot be implemented overnight. They are parts of a process that will be lived over and over until customer-centricity becomes part to the DNA of a company. An option to kick-start the process is to run an Outcome-Driven Innovation® (ODI) project, for example when defining your product strategy or your market strategy, supported by our experienced ODI consultants. Use the experience to really live customer–centricity and consciously strengthen your innovation culture, and continuously communicate success stories internally to convince others.
Marco de Polo describes how this process works for Roche Diabetes Care:
“You really need to approach this through a strong collaborative effort, so you can have other teams and other departments embrace the methodology as well. And then they will drive it as well […] And most importantly, this can be part of the cultural transformation that an organization is pursuing. This is work in progress and we’re at the beginning of it though.”
Corporate cultures change very slowly, and cultures are alive – they never stagnate. What is most important is that you take the first step to transform your culture into a customer-centric culture of innovation …. now!
If you want to learn more about customer-centric innovation cultures, listen to our podcast of the Innovators Talk event format with Johann Peneder from Umdasch Group Ventures and Henning Trill from Bayer. Leave us a message here to be informed as soon as the podcast is released.
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