The challenge of ignoring customers when innovating

A visionary tech innovator, probably the most famous one, once said “It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them.”

On the other hand, innovation is often seen as a balancing act between meeting current customer needs and pursuing visionary ideas that disrupt existing markets.

So, how important are customers when it comes to innovation?

Clayton Christensen, the author of the famous "The Innovator's Dilemma," argues that relying too heavily on customer feedback can be misleading, particularly when aiming for disruptive innovation. This concept resonates with Astro Teller's, X’s captain of moonshots, who advocates for a philosophy that tackles any problem radically, aiming for a long-term 10x gain compared to a typical incremental improvement of 10% mostly focused on immediate customer satisfaction.

The misleading nature of customer feedback

Customer feedback is invaluable for sustaining innovations—enhancements to existing products that satisfy current market demands. However, when it comes to disruptive innovation, which aims to create entirely new markets or transform existing ones, customer input can be restrictive. Customers typically focus on immediate needs and familiar products, often overlooking the potential of groundbreaking innovations.

Clayton Christensen emphasizes that successful (incumbent) companies often fall into the trap of over-listening to their customers, leading them to miss out on disruptive opportunities. By concentrating on sustaining innovations, these companies excel in the short term but risk obsolescence when disruptive technologies emerge.

Fostering a culture of bold thinking and experimentation for disruptive innovation… ignoring customer feedback

To navigate the challenge of ignoring customer feedback while pursuing disruptive innovation, companies must foster a culture that encourages bold thinking and experimentation without the constraints of immediate commercial pressures.

Key levers of this culture are:

• Creating a safe space for innovation. By doing so, employees feel empowered to take risks without the fear of failure. Encouraging and rewarding an experimental mindset allows teams to iterate rapidly, test hypotheses, and learn from failures. Google’s "20% time" policy, which allows employees to spend 20% of their work time on passion projects, is a prime example of how creating this safe space can lead to groundbreaking innovations like Gmail and AdSense.
• Leadership commitment to innovation. Leadership plays a crucial role in cultivating an innovation-friendly culture. Leaders must demonstrate a commitment to innovation by allocating resources, providing support, and celebrating successes and failures alike. When leaders visibly champion bold ideas and provide the necessary resources, it signals to the rest of the organization that innovation is a priority. Jeff Bezos’s "Day 1" philosophy at Amazon emphasizes the importance of maintaining an entrepreneurial spirit and continuous innovation, regardless of the company’s size.
• Dedicated innovation teams. Establishing dedicated innovation teams can help insulate disruptive projects from the day-to-day pressures of the core business. These teams can operate with greater autonomy, allowing them to focus on long-term goals without being bogged down by immediate commercial demands. For instance, X (formerly Google X), led by Astro Teller, operates as a moonshot factory where teams work on ambitious projects like self-driving cars and Project Loon, free from the constraints of Alphabet’s core businesses.
• Encouraging cross-functional collaboration. Disruptive innovation often requires diverse perspectives and expertise. Encouraging cross-functional collaboration can spark creativity and lead to novel solutions. Companies can facilitate this by organizing innovation workshops, hackathons, and cross-departmental projects. IDEO, a global design firm, is renowned for its multidisciplinary teams that bring together experts from various fields to tackle complex problems creatively.

Case study: Apple

Apple, known for its innovative products and groundbreaking technology, has continually pushed the boundaries of consumer electronics, revolutionizing industries with each new release. For those who didn’t know yet, the intro quote of the article was said by Steve Jobs, its founder and CEO.

• The iPhone. Before the iPhone's launch, mobile phone users were primarily interested in devices with better battery life, clearer calls, and physical keyboards. Apple, under Jobs' leadership, envisioned a device that combined a phone, an iPod, and an internet communicator. Ignoring prevailing customer demands for incremental improvements, Jobs introduced the iPhone, which created a new market for smartphones and transformed the industry.
• The iPad. Similarly, when Apple introduced the iPad, critics and consumers questioned the need for a device that seemed to fall between a smartphone and a laptop. However, Jobs' vision of a new category of portable computing devices proved to be prescient. The iPad has since revolutionized how people interact with digital content, from media consumption to education and business applications.
• Lisa. One of the most ambitious ventures… and failures. Lisa, released in 1983, was developed to be the first personal computer to feature a graphical user interface and a mouse, aiming to make computing more intuitive and user-friendly. Despite being a failure due to high costs, performance issues, marketing missteps, the Lisa played a crucial role in the development of future Apple products. Many of the innovations and lessons from the Lisa project were integrated into the Macintosh, which launched in 1984 at a much more affordable price.

Conclusion

Listening to customers is crucial for sustaining innovations but can be misleading when aiming for disruptive breakthroughs. Clayton Christensen's insights, combined with Astro Teller's moonshot thinking, highlight the importance of balancing customer-centric approaches with visionary, transformative strategies. Steve Jobs' success with the iPhone and iPad exemplifies the potential of this approach, showing that true innovation often requires ignoring conventional wisdom and immediate customer demands. By fostering a culture of innovation, companies can pursue disruptive opportunities to stay ahead in a rapidly evolving market landscape.