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INNOVATION

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Customer-centric innovation In a globalized business world, there are three key dimensions to customer-centric innovation. Hari Nair explains

Nearly 20 years ago, I was an R&D engineer designing laundry detergents for markets around the world. One was a washing machine detergent for China. Having analysed the data showing widespread ownership of washing machines in Chinese homes, we were confident it would sell well. We were wrong. The reason why became clear when I moved to China and spent more time in Chinese homes. I saw that washing machines typically sat in the living room corner, covered by a sheet and rarely used, save for bulky clothes. Most laundry was done by hand: a better product would have been a great hand-washing detergent. In global businesses, it’s all too easy to make flawed assumptions about the products that consumers in an unfamiliar part of the world might want. Successful customercentric innovation demands that we genuinely understand our customers’ needs. But that alone is not enough. As the IDEO Design Thinking toolkit identifies, there are three factors for success: desirability, feasibility, and viability.

Desirability

Customers don’t buy products simply because of their gender, their age, or their profession. As customer motivation experts Bob Moesta and Clayton Christensen put it, they buy because they have ‘jobs to be done’ in their lives. Truly customer-centric organizations identify the jobs their customers need done and find solutions, often breaking out of pre-existing industry or product categories in the process. My experience working with Godrej & Boyce on a refrigeration product for the Indian market shows the importance of really understanding the job to be done. Our initial market research focused on non-consumers. We observed that while some had access to community fridges, or had second-hand units, they were usually much Dialogue Q4 2019

bigger than needed, making them expensive to run. Our insights led us to a radical design: the chotuKool was small, suitable for keeping just a few items cold overnight, used much less power, and was far more affordable. Our innovation made it highly desirable, and created a new growth category for Godrej.

Feasibility

Desirability needs to be backed up by feasibility, the technical ability to create and deliver the solution. For chotuKool, an important part of our success was partnering with India Post, the largest postal network in the world, to reach our target rural consumers. By contrast, feasibility was a real issue for a laundry service start-up I was part of launching in 2009. Our service was highly desirable, offering a quality but affordable and convenient service based on putting laundry kiosks on street corners – but that distributed model meant we needed to collect cash every day, which proved hard. After trying a number of approaches, we ended up selling the business. At that time, our model simply wasn’t feasible in the Indian market – though today, with the rapid rise of smartphones and cashless payments, things would be very different. Testing an idea with small pilots and incorporating the lessons learned is vital. Planet Fitness has become one of the largest and fastest-growing fitness centres in the US by offering lower-cost gyms that cut out premium features, an approach that was tested and refined in its first few sites.

Viability

Great products also need a solid financial and business model. Research by one of my colleagues at New Markets Advisors looked at 5,000 innovations over a 15-year period: just

Above The chotuKool mini fridge created a new growth category for Godrej

Profile for LID Business Media

Dialogue Q4 2019  

Today’s global economy is shaped more by businesses than by nation states: by the goods and services they provide, the networks and supply c...

Dialogue Q4 2019  

Today’s global economy is shaped more by businesses than by nation states: by the goods and services they provide, the networks and supply c...