Right now may seem like the worst of times for businesses, but it’s actually the best of times.When everyone else is playing defense, playing offense sets you apart. The best time to leap ahead is when everyone else is standing still, cutting back, holding off. Hesitation is not a viable business strategy. Innovation is. We B2B types have a choice: we can remain paralyzed, fearful of what outside forces might do next, or we can boldly forge ahead and grab our competitors’ share of the marketplace. We can innovate ourselves out of this mess.
Steps on the Path to Innovative Business
Innovation isn’t about flinging products willy-nilly against the wall to see what sticks, nor is it about building a product you and your employees love and waiting for the adoring masses to arrive. ‘If you build it, they will come’ may have worked for Steve Jobs, but it’s not likely to work for you. More to the point, you can’t afford to waste your time, energy, and money on hopeful guessing.
First, get employees excited about the future. “Maximizing shareholder value” sounds great, but it’s not likely to get employees revved up. To get full engagement from employees, you need to teach them a new mantra: “The goal of our business is to understand and meet the needs of our customers.” Suppliers’ employees can get very excited about their future when they see how they can directly impact it, and of all the ways they can impact it, there’s probably nothing more exciting for them than innovating in a way that makes the customer happy. The only way to make B2B customers happy is to deliver significant, measurable, economic value to them.
Second, master the art of competitor benchmarking. Deliver value beyond the customer’s next best alternative. That means making sure you quantitatively understand that next best alternative.
Here are four steps you can build into the front end of your new product development process:
- Identify benchmarking outcomes. Your new welding machine produces a smoother bead, is more portable, and has more power options, but what if customers really care about faster set-up time, reduced energy consumption, and productivity data collection? You need to find this out up-front.
- Identify benchmarking alternatives. Make sure you understand the capabilities of products like yours, but don’t overlook other viable alternatives in your marketplace.
- Identify benchmarking test methods. Use test methods that simulate the value customers seek in key outcomes.
- Identify benchmarking levels. How good is good enough? If competing welding machines take ten minutes to set up and your new product design calls for five minutes, will your customers be impressed? Require a serious discussion on customers’ next best alternatives during your stage-gate reviews. You could miss a brilliant opportunity to modify or kill a new product project.
Third, make sure your innovation is TRULY customer-centric. Most B2B suppliers believe that they are customer-centric. Most often they actually approach innovation in terms of competitive products when they should be thinking in terms of customer alternatives. Likewise, they seek to validate hypotheses (Asking “You do need this product, right? Right?”) rather than uncover outcomes (Asking “What problems are you having?” with no idea where the customer will take them). Making these two shifts in thinking changes everything about your interaction with customers. You end up uncovering options that truly excite customers, and excited customers open up their wallets.
Fourth, directly engage the customer in the innovation process. Unlike end consumers, B2B customers are knowledgeable, rational, and interested. B2B-optimized interview methodology fully engages them so that you can take advantage of these qualities. It helps you learn precisely what customers are willing to pay for, it helps you ask the right questions, and it helps you pre-sell the product so that your target market is primed to buy when you finally launch the new product.
Fifth, prime the customer to buy the product—even before it’s developed. The best part about engaging customers using New Product Blueprinting methods is that it results in products they helped you design. By asking customers what problems they face before you ever develop your product, you avoid having to convince and cajole once the product is on the market. There is no reason to “sell” people on what you’ve already agreed—together—will solve their problems and help them thrive. This method of product development allows you to get on with the business of truly serving customers. There is no substitute for building solid business relationships based on the delivery of real value. And in a tough economy, they’re the only kind of relationships any of us can afford.
Fight or Flight: Which Will You Choose?
The bold pursuit of smart innovation saves you from wasting time and money on failed guesswork, and it deeply engages employees and creates customer goodwill. Meeting customer needs feels good to everyone, and it’s human nature to do more of what feels good. Let’s quit running scared and find our fighting spirit again: let’s make things people need and watch as they transform marketplaces. Let’s turn industries upside down. I can’t think of a better response to any challenges the Washington bureaucrats and the economic doomsayers throw our way.
Dan Adams, president of Advanced Industrial Marketing, is the author of Reinventing VOC for B2B: 12 New Rules from New Product Blueprinting, and New Product Blueprinting: The Handbook for B2B Organic Growth. He and his company conduct training in every region of the world for top B2B companies, including Dow, DuPont, GE, Sherwin-Williams, and Saint-Gobain.