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Tuesday, January 20, 2015

Collaborative Innovation and Consumers

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How WellFor innovation to succeed, we must first consider the human factor: our consumers, employees, and partners. Each of these stakeholders will have a different role and interest for collaborating with us on innovation. Understanding and satisfying their needs will take time and effort, but when done well, the return on investment is significant. In a series of blogs I will talk about each of these key innovation stakeholders.

Who is your consumer? And why should she care?

Defining and winning with our target consumers should be our first priority. It is a simple logic: The more consumers choose our products and services among the many choices available, the better our business outcomes will be. Therefore, we must start our innovation initiative by defining our target consumer, and learn to understand her at an emotional level, i.e., her hopes, dreams, and aspirations. This kind of understanding led Procter & Gamble’s “Pampers” business to set its purpose as “Caring for Your Child’s Development,” and for Lego to set its brand promise as “Endless Play.” A simple description of what your brand stands for becomes inspirational to all internal and external stakeholders.

Understanding your target consumer at a deeper level requires being present with them in their own environment. After a few false starts, P&G’s eventual success in China came from a better understanding of Chinese moms. Young mothers, especially in rural areas, are often judged by their mothers-in-law on their parenting abilities. This puts extra pressure on the mothers to keep their baby happy. With the traditional night diapering practice of using a cloth thrown over split pants, the baby (and hence its mom) wakes up several times at night due to wetness. The result is exhausted moms and not-so-happy babies. The Pampers team conducted scientific research with credible Chinese partners that tied babies’ cognitive development to better sleep. Pampers’ marketing campaigns then claimed Pampers’ superior absorbency allowed babies to fall asleep faster and sleep longer. As a result, P&G’s Pampers business grew more than the competitors’ brands and became number one in a category that hardly existed a decade ago.

Social / Digital Revolution

With the adoption of Internet and social technologies, consumers nowadays are providing abundant feedback on their experiences, hopes, and desires. Companies that leverage such digital information (so-called Big Data) strategically for insights and decision making are gaining significant advantage. In addition, many companies have experimented with and established proprietary social platforms for consumer engagement and co-creation. An example is Hallmark’s use of Communispace with select consumers. By creating conversations based on questions like “How do you celebrate holidays?” Hallmark gets insights about consumers’ habits, practices, and aspirations. These insights are then designed into seasonal product offerings. Another example is Tremor™, which initially started as a word-of-mouth marketing tool for P&G’s own brands and is now available to others. At its core are half a million vocal women who act as “connectors”; this community also helps create and assess new ideas internally at P&G. Another striking example of using digital at multiple touch points with consumers is Nike, which was declared the No. 1 most-innovative company in 2013 by Fast Company. Nike created a “Runners Community,” offering easy-to-use digital products for the runners to measure their personal and competitive performance, and allowed consumers to co-create with them. As a result Nike captured a major portion of the running-shoe market.

Definition of “Consumer” Depends on the Context

When you want to improve your innovation culture, system, and capabilities, your consumers become your employees and partners. If your improvement initiative is merely a push of new strategies and tools, rethink. Without a deeper understanding of how they will impact your employees and partners, there is a higher chance that they will not be adopted. Instead, openly engage with your employees and partners to understand their current experiences as well as their hopes, dreams, and aspirations for a better experience. You will likely identify champions who will not only offer great ideas, but will also help to drive the adoption of the new way.

I would love to hear your stories about effective or ineffective “consumer” definition and engagement that led to innovation successes or failures… Please share by commenting on this blog, or by emailing to me at This email address is being protected from spambots. You need JavaScript enabled to view it. .

Email This email address is being protected from spambots. You need JavaScript enabled to view it.
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