Insist on data-driven innovation

Transcript of Chapter 35

In your performance reviews, you get both praise and criticism, right? Do you feel your boss is more accurate on the praise than the criticism? This is called confirmation bias… the tendency to interpret information in ways that support our pre-existing views. It’s so strong that our brains get a shot of “feel-good” dopamine.

This limits our openness to new information, and should make us nervous about starting with our solutions, not customer needs… asking customers to “validate” our ideas… failing to identify & test assumptions… and skipping quantitative interviews: which are your greatest defense against confirmation bias and innovation malpractice.

Imagine you’re conducting Preference interviews with a paint producer. You might ask how important it is to minimize paint settling, and hear “7” for “Very Important.” Then, ask how satisfied they are today, and get a “5” for Barely Acceptable.

You interview several customers in the market to generate this Market Satisfaction Gap chart… which shows Importance times ten minus Satisfaction, all averaged for the entire market. If the Importance was 8… and Satisfaction was 6…. your Gap would be 32%. Gaps over 30% indicate the market is eager for improvement.

But if all outcomes are very low, your market is over-served, and you should probably kill your project because all this market wants is a lower price.

In our research, we asked teams how much these interviews impacted their product designs. 84% said the impact was “great” or “significant.” They probably would have developed a different product without these interviews, right? So 5 out of 6 teams do not fully understand customer needs.

Companies are rolling this die and only get it right 1 out of 6 times. No wonder many feel successful innovation is like a medieval comet… rare… unexplained… and unpredictable.

Here is my number one recommendation: Don’t allow any significant product development work without evidence of customer needs, such as Market Satisfaction Gaps. This is how you pursue commercial certainty.

Do this and you’ll focus your R&D on what matters to customers, and drive real growth. Now that will give your brain a nice shot of dopamine. Check out this white paper for more.