The four mantras of profitable innovative design

Innovation in itself is no rocket science. There are creative people and ideas all around us, there are advanced technologies and processes to convert ideas into products and services and then there are state-of-the-art marketing tactics to take the products and services to customers. There is no dearth of that all.

But does every creative and well marketed innovation result in immense profits? The sad answer is no! Plenty of innovative products and services get created and marketed every other day but only a few manage to capture the markets. 

So, what really is the secret of innovating for profitability? The answer is surprisingly simple - focus on customer’s basic needs! A customer’s basic needs essentially come from their daily tasks and processes whether it is in a B2B or B2C context. There are umpteen opportunities for simplifying, accelerating, adding value and fun to what your customers do day in and day out. Your innovation efforts should try to focus on smartly resolving those challenges and pain points which prevent your customers from being more productive, efficient and effective.

Customers face many different challenges in their business or daily lives but there are four basic issues underlying most of their challenges.

For most consumers the common challenges are:

1. They have too many tasks to accomplish in day to day life whether at work or home life
2. They have too little time to accomplish these tasks
3. They like to produce high quality, high worth and a high value out of what they do and most importantly 
4. They want to enjoy what they do.

Same challenges apply also in a B2B context, but in a slightly different setting:

1. Most businesses have too many too complex business processes to deliver goods and services to their customers
2. These processes are time consuming and there is always very little time when volume orders start to come in
3. Businesses would like to serve their customers in the best possible way and provide high value to them.
4. To serve customers well, businesses intend to create fun and motivation for their employees in doing what they do best.

That said, there are essentially four key characteristics of your product, services, tools, methodologies or marketing tactics which make them highly attractive for your customers:

• Simplicity of use
• Speed of performance
• Degree of utility or value and
• Degree of positive emotional impact from use.

Companies should strive to incorporate these four fundamental characteristics in designing all their products or actions targeted at customers. 

Make it simple

In today’s busy world consumers and businesses expect to get the end result of their tasks and processes at a few clicks or minimum number of sub transactions or processes. When designing products or services pay attention to how easily the user of the product or service can get the end result. The mass of buyers care about the end result. A product or a service can be considered innovative if it has a simple, easy to learn and easy to use design that helps get the end result with minimum efforts. Such an innovative product or service is likely to appeal to mass markets and hence be a profit machine for your organisation.

A good example is Nespresso’s coffee machine with its coffee pods. From a user’s perspective good coffee is made with minimum efforts i.e. no need to roast, grind, filter, clean etc. Nespresso’s coffee machine operates on a single click mechanism and makes highly satisfying coffee in an effortless way.

Make it quick

Time is a valuable commodity in today’s fast paced world. For businesses particularly, time is money. Any time not spent working for customers is non productive and hence a waste!

Simple design is likely to result in products or services which save time for your consumers or customers. Customers are willing to pay a high value to buy products or services which effectively provide them with more time to serve their customers or carry out other important and productive tasks. Such innovation is profitable indeed!

Uber is a great example in the services industry. One can register for an Uber account with an app on their Smartphone and request a closest possible Uber taxi in most big metro cities around the world. The taxi arrives within minutes of your request. One can just hop off the taxi without having to wait for processing payments as everything is handled through the app. This fast and innovative way of serving customers has awarded Uber an unusually high valuation like no other in a Taxi market.

Make it functional

Most customers care for the end result of a process, i.e. what the process should deliver at its completion. A product or a service which only focuses on executing a process is not good enough, let alone innovative. But a tool, product, service or method which focuses on succesfuly getting the final expected outcome will certainly be a hit with your customers. The end result may as well be something simple like a good coffee or something more complex like cost savings in operations. Your innovation should focus on the customer's ultimate outcome and deliver that successfully and consistently for the customer to attach a high value to it.   

Smartphones are a good example in this respect. Your smartphone adds great value in getting a lot of your tasks done. It serves as your alarm clock in the morning, as your newspaper at the coffee table, as your calendar to plan your day, as your weather thermometer, as your communicator to virtually collaborate with colleagues and customers at work, as your grocery list for shopping after work, as your calorie tracker when you go for your evening jog, as your messenger to connect with friends and the list goes on. Your smartphone is a multifunctional gadget and delivers the means to many ends. You pay a premium to own it because it offers you high degree of utility and adds immense value in your life.

There is no surprise why Apple’s devices and apps are so widely popular and have a large share of the market. The brand is able to command a high price for their products  owing to their smart design. In its product design, Apple has learnt the art of focusing on all the basic needs of a customer:  simplicity, speed, utility and fun.

Make it fun

Most services and products see an early wind up in the markets because they are either too complicated to learn in terms of use, maintenance or too gimmicky with several unnecessary confusing features or then have too uninspiring user interface. Innovative design will be that which provides an emotional appeal to users. People are motivated to do what they do best and if the tools or services they use for getting the end result do no promote productivity or happiness, such products and services will not last long in the market. Hence innovation needs to also focus on the emotional features of the design and take into account the fun and happiness aspects of the users.  This applies not only to products and services but also to the marketing tactics, brand placements and overall buying experience provided for the customers.

Ikea is an excellent example of a fun shopping experience. They sell household furniture and interior accessories which are basic necessities of any consumer. Generally shopping of such basic necessities can be mundane and painful in that trying to find the right size, shape, colour of furnitures, choosing matching accessories etc. However, Ikea takes this shopping experience to a whole new level. At Ikea stores, products are not just put on shelves by product categories, but those are thoughtfully displayed as furnished rooms with relevant accessories beautifully arranged in different layouts, colour schemes and with economical usage of space. This visualisation makes it convenient and fun for customers to choose what they would like to for their house. Such thoughtfully done store design appeals to the emotions of the consumers who then tend to buy more than they originally planned.

Read more on "design for delight" on https://hbr.org/2015/01/intuits-ceo-on-building-a-design-driven-company

The four mantras above apply also in B2B context.

Take an example of SAP, a software company that sells ERP products and solutions to customers whose basic need is to have more transparency, speed, agility, productivity and efficiency in their business operations while optimising costs. SAP’s vision is to help their customers run their business better. In the recent years SAP has focused on innovation in simplifying its own product offerings and upgrading its user interface to provide ease and fun of use. SAP’s HANA innovation is focused on providing businesses with high speed and ease of accessing data and making decisions in real real-time. SAP products deliver a high value to SAP customers in terms of increasing operational efficiency, reducing costs of operations, increasing productivity and consolidating data for decision making, besides many other such value attributes. Such innovation that returns unprecedented value allows SAP’s software to command a high price in their markets.   

True innovation is not necessarily about making fancy, cool, technically complex products or services. Neither is it about limiting innovative design to products and services alone. A business which wants to adopt innovation successfully should focus on designing and creating products, services, tools, methodologies, processes and marketing tactics which can make consumer’s lives easy and fun and help businesses to run their processes or serve their customers in the simplest, enjoyable and fastest way possible.

Profitable innovation requires a highly customer-centric approach and a focus on customer's basic necessities.

Simplicity, speed, utility and fun are the four fundamental characteristics of innovative design that will empower customers by providing them high value and potentially command a high price from them. Such innovative design will deliver sustainable profits in today’s highly competitive business environment.

This post is based on some of the key learnings from my work experience in product development, marketing and service delivery and also from Executive Business Education. For the business education part, I owe credit to the Marketing legend Christian Gr?nroos  who I had the honour of listening to where he shared with us his profound knowledge on the subject of Service Marketing. I also owe credit to Oskar Korkman who shared his experiences and research studies on customer insights and their influence on innovation, product development and product marketing.