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The Importance of Customer Value in Shaping Innovation Investments

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HandshakeThere appears to be an unwritten rule that celebrity and mythology are intertwined. Interestingly, this mythology gets thicker as the status and power of the celebrity increase. This has several unfortunate consequences, the most severe being that, over time, the dominant circulating myths convey a reality that never even happened.

The collateral damage is significant. Why? Because what really occurred loses its ability to educate, inform, and inspire. All that remains is flatulent fodder for café conversations.

Stories of Apple and Steve Job’s approach to product innovation — fondness for marketing research and importance placed on customer needs (or lack of it, to be more accurate) — fall into this category.

In the past 24 months, I have conducted executive education programs in several different parts of the world — Asia, Europe, and North America. As I am biased towards action learning, I always lace my materials with tons of real-life examples and workshops.

In selecting these examples and mini case studies, I try very hard to stay away from the usual suspects — Apple, Nike, Starbucks, etc. My reason — examples from these companies have been overplayed to such an extent that they have lost their ability to educate and inform. (To learn more, please read my previous post where I recommend that conference organizers declare a moratorium on these companies and force presenters to discuss other examples, so that new learning can take place.)

But no mater how hard I try, it is very difficult for me to totally escape a discussion involving Apple. No matter which part of the world I am in, seminar participants will invariably bring up Apple and Steve Jobs. And since the focus of my seminars is rethinking marketing and rethinking innovation — customer centricity, customer experience, collaborative innovation, collaboration and co-creation — one of the most common objections I encounter is, “but Apple and Steve Jobs don’t talk to customers before launching new products, they don’t do any marketing research, they rely on their own genius, etc.”

Myth or reality? Invariably, participants respond emphatically — reality!

While statements referencing Apple’s disdain for formal/traditional marketing research are well-documented, interpreting that as, or equating it to disregard for the customer, customer needs, and customer experience in shaping innovation strategies is both dangerous and inaccurate. Value is always determined by the customer, never by a technician, no matter how brilliant the technician.

Having been active in the executive education field since 1985, I know better than to argue with participants, especially when they are deeply attached to their POV.

So, I decided to take the road less traveled — go on an archeological dig. To find something, anything, that would show Steve Jobs acknowledging how much he values the customer, customer experience, and customer needs in influencing his company’s innovation decisions and his own thinking. And lo and behold, I found it, for as Dumbledore likes to remind Harry — help is always given at Hogwarts to those who ask for it (perhaps I just lucked out).

It’s a short video, and I sincerely hope you saw it. I hope you heard Steve Jobs himself asserting, strongly, that the starting point should be the customer, and not the technology. That one shouldn’t work from the technology to the market place, but backward, from customer experience to technology. The latter, no matter how powerful and revolutionary, is always just a means to an end, never the end. Or as another great, Ted Levitt, author of the HBR classic, “Marketing Myopia,” likes to remind us — customers don’t buy ¼” drills, they buy ¼” holes.

Professionals involved with designing and implementing innovation programs will be well advised to think of what ¼” holes they want to drill first, and then work backwards to the drill. Exactly as Steve Jobs advises in his 1997 video.

To wrap up, nothing wrong with myths, they are good to fire up the gut. But let’s make sure we don’t distort reality to such an extent that we lose touch with the essential reality motivating the myth. In the final analysis, customer handshakes are not crafted in labs or on laptops, but in the real world of customers’ lives where their hearts, minds, and wallets interact in interesting, but inevitably predictable ways. If they can create value for themselves with what you have to offer, rest assured they will shake hands with your company, and its offering.