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How B2B Companies Gain the Innovation Advantage

Dan Adams |
How B2B Companies Gain the Innovation Advantage

HOW B2B COMPANIES GAIN THE INNOVATION ADVANTAGE
CUYAHOGA FALLS, OH (JUNE 1, 2015) – FOR IMMEDIATE RELEASE

How can B2B companies ensure that their customer-facing innovation will succeed? The answer lies in The Innovation Wave.

The AIM Institute’s new white paper, ‘Catch the Innovation Wave’, written by founder and president Dan Adams, examines the common problems that lead to high uncertainty and failure of B2B innovation, and it provides clear insights that companies can use to create predictable, sustainable and successful product innovation.

“Just imagine if a company gave itself a decade-plus head start over competitors in customer-facing innovation – it’s their very lifeblood. B2B new product innovation is done so poorly today that we know it simply must change in the future. This white paper paints a picture of what I believe will be commonplace in 10 to 20 years.” said Dan Adams.

BEING EARLY OR LATE FOR A WAVE HAS CONSEQUENCES.

Over the past century, business principles have progressively moved from The QualityWave (led by Dr. W. Edwards Deming with his quality principles for manufacturing), to The Productivity Wave (lean manufacturing and business process re-engineering), to The Innovation Wave (the focus on creating what customers value).

Quality and Productivity both apply to current operations, and therefore reach a point of diminishing
returns. What can you do after you reach zero quality defects? And how do you boost productivity in a high-tech factory run by the proverbial “man and a dog”? (The man feeds the dog; the dog bites the man if he touches the controls.)

The Innovation Wave impacts future sales…so it has unlimited potential. Just imagine if your company could create predictable sustainable growth. The Innovation Wave is the key to winning (succeeding), and the very foundation of ‘winning’ is in achieving profitable, sustainable organic growth.

Companies must catch and ride The Innovation Wave, or risk being left behind. Catch the Innovation Wave considers these three questions:

1. What will change in the Innovation Wave?
2. Do B2B companies have an advantage?
3. What is this science of B2B customer insight?

What will change in the Innovation Wave? What if manufacturers had the advantage of seeing what was around the corner? What would they do differently? How would they proceed?

The battle for success and winning within any industry first lies in realizing the battle exists.
Therein lies Dan Adams’ first rule of battles:

YOU CAN’T WIN A BATTLE YOU DON’T KNOW YOU’RE IN.

The obvious problems to be solved in both the Quality and Productivity waves were high product variability and inefficient waste, respectively. The solutions to these problems were available early in each wave (such as statistical process control and the seven wastes of lean production). The laggards within each wave didn’t suffer from availability deficiency, but rather adoption deficiency.
The obvious problem to be solved within the Innovation wave is the huge new-product failure rate.
According to Dr. Robert Cooper, the father of Stage-Gate,® ”the average company only has a 25% success rate after it finishes its front-end work.”

Winners in the Innovation wave will learn how to bring clarity to the “fuzzy” front-end of innovation.

What if your R&D worked only on problems your customers truly cared about?

This would provide the clear advantage over competitors.

There are really two problems to solve within the Innovation wave:

Problem 1: What unmet needs will the market reward you to satisfy?
Problem 2: How can you satisfy the unmet needs?

Most companies spend 90% of their total project costs on problem 2. However, decades of research and experience suggest Problem 1 remains the major problem to solve in order to create and achieve sustainable organic growth. Problem 1 is really about asking the right questions to uncover the unmet needs of the market you serve.

Problem 2 is about answering the questions with accurate supplier solutions. Do B2B Suppliers Have an Advantage?

Here’s the good news: When it comes to understanding market needs early and well, B2B
suppliers so have a significant advantage over consumer goods suppliers.

There are five reasons why:
1. They typically have greater knowledge of their industry due to expertise, experience
and training.
2. Interest level is higher because B2B buying decisions often have huge financial impact.
3. B2B buyers are usually more objective. They make important decisions in groups,
must follow company procedures, and know they’ll be held accountable for buying decisions.
4. B2B customers have keen foresight. They have clear, measurable goals allow them to
predict the benefits they want to obtain.
5. B2B buyers are more concentrated. A B2C supplier might have millions of customers,
but a B2B supplier has far fewer.

What is this Science of B2B Customer Insight?

The customer insight portion of innovation (Problem 1: the unmet needs to be satisfied) can be learned and used for competitive advantage, closing the gap between a supplier’s ability to predict customer buying behavior, ranging from 100% guessing to 100% certainty. The science of B2B customer insight is based on customer outcomes (their desired end results). It’s what the customer wants to have happen, not how the supplier will make it happen. Customer value is only created when an important unmet customer outcome is improved. Value cannot be created for outcomes customers are already satisfied with – current value is very different than new value.

A company’s only path to profitable sustainable organic growth is through customer value creation. Nothing a company does within its own operation will achieve such growth, unless customer value is also created.

The science of B2B Customer Insight is in B2B companies studying their customers’ worlds
and focusing intently on outcomes. There are nine levels within the process called New Product Blueprinting that reveal something new about the customer outcomes, and when the ninth level is reached, Problem 1 is solved.

1. Uncover all outcomes
2. Understand the importance
3. Define and set direction
4. Prioritize outcomes
5. Learn how to measure
6. Identify satisfaction points
7. Measure next best alternative
8. Quantify value created
9. Quantify value captured

There is a wonderful competitive advantage if your company closes the gap to predict customer-buying behavior before your competitors beat you to it. No one can stop the Innovation Wave. You just have to decide if you’ll be on top of it, or it will be on top of you. Don’t fear the Wave. Seize the wave and transform the way your employees enter customers’ worlds, gain new insights, and disrupt industries with amazing new products.

Click on the link to read the full white paper ‘Catch the Innovation Wave’ .

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