The development of most products takes three to ten years, from the idea to the marketing. However, many companies rely on their understanding of consumers today Make decisions for these future products.
This is a risky strategy as consumers are constantly evolving. Today’s consumers may not exist or their needs may have changed drastically until a product is finished.
Think about a simple equation. If X is the number of years it takes you to launch a product. and Y is the number of years that your product is expected to be on the market. Will your customers’ behavior remain the same in Z years as they do today?
By developing consumer foresight, we can minimize the uncertainties associated with customers in the future and think about innovations in the longer term.
You’ve probably heard that statistics like 11 out of 12 startups fail and 19 out of 20 product innovations fail. It’s no secret that innovation is complex and risky, but it’s also important.
In a global innovation survey conducted by McKinsey, 84% of executives agreed that innovation is important for their growth – but only 6% were satisfied with the innovation performance. One way to improve performance and reduce risk is to understand that customers are constantly changing.
One way to improve performance and reduce risk is to understand that customers are constantly changing.
Think about how much has changed in the past ten years. We’ve seen big changes in public opinion, including full reversals on issues such as marijuana legalization and same-sex marriage. There have also been major technological changes. In 2010, only two of the seven largest companies were active in the technology sector. Today, all seven The largest companies include technology companies.
Looking ahead to 2030, how many of today’s emerging technologies will be widespread in ten years? We tend to overestimate the effect of a technology in the short term and underestimate it in the long term. (Amara’s law explains this phenomenon.) Consumer foresight helps us understand the range of plausible futures and potential surprises so we can develop a responsive innovation strategy.
This way, you can understand current and future consumers, think about the drivers that affect their behavior, and take a proactive and proactive approach.
How do we get there? Cooperation with our partners at Optimal Strategix Group (OSG)We have combined our areas of expertise – consumer trend forecasting and product innovation – with cognitive and behavioral analysis to develop a four-step approach that combines extensive data with rigorous analysis to develop an evidence-based foresight.
The first step is to understand the key consumer drivers and identify critical uncertainties.
To do this, we identify macro factors that influence consumer behavior – things like culture, technology and the environment. We perform statistical analysis on existing data to identify relevant consumer megatrends such as radical personalization, convenience, empowerment, connection and ethical life. And we use interviews with Key Opinion Leader (KOL) to fill the gaps.
We want to come to the table with a solid factual base to inform our future predictions. This way we don’t start with an empty whiteboard and make no assumptions.
We use the information gathered in the first step, as well as forecasting and backcasting techniques, to create future scenarios based on critical uncertainties and trend variables. This helps us understand how different scenarios can impact consumers, industries and companies.
For example, if we imagine health scenarios, we can create a two-by-two matrix. like the one belowHere we look at factors such as scarcity of resources compared to abundance and established companies that hold their own compared to start-ups that use more of the market.
Taking these factors into account leads to four very different scenarios based on our thorough analysis from step 1. By taking the time to imagine them, we can improve our understanding of the most important nuances.
In the third step, we test the assumptions made and examine more closely how future scenarios could affect customers. We want to understand where the customer is going and where he might end up in the future.
We use qualitative and quantitative research based on real customer thinking to understand what drives their decision making. Sometimes we layer clients to test how critical different motivators can be in some scenarios than in others.
Finally, we translate foresight into strategic and tactical steps. We are developing a strategy that is robust enough to respond to different futures.
We create and include innovation roadmaps Signpost or events This could indicate a shift towards one of the potential futures. For example, rising health care costs, economic depression or a loss of consumer confidence could indicate a change in the health landscape.
The goal is to develop an innovation strategy that responds to different futures – not to four different strategies for four different futures. As you advance your innovation journey, you can recognize signposts and adapt them accordingly.
This enables us to plan for the future without knowing exactly what it will look like.
How could this be useful? Consider mobility. We know that the way people and products move is changing. So how can companies be one step ahead of the curve?
For a customer in the automotive industry, we looked at future cities, how society will develop and how this will change mobility needs. We imagined five city models based on different economic growth rates and different social values.
For a customer in the automotive industry, we imagined five city models based on different growth rates and different social values.
For example, City C could focus on ethical life and social responsibility. In the meantime, city B could have a planned economy with a lot of potential for infrastructure innovations. Each city’s growth model is different, and this gave our customers a lot of insight into future opportunities and a strategy to respond to the scenarios.
In another case, we worked with OSG to help a medical device manufacturer make a hospital management system future-proof. The customer wanted to update their hospital management system and ensure that the devices are durable in a changing environment.
A medical device manufacturer wanted to ensure that its hospital management system was permanent in a changing environment.
With the four-step approach, we were able to understand how needs and opportunities will develop. In our innovation roadmap, various innovations were compared according to time and effort. This allowed the customer to make a more informed decision about which innovation (and when) to invest in to meet customer needs now and in the future.
Here are three important questions to ask yourself about the resilience of your own strategy:
- Do you have the foresight to make informed decisions about the future? Have you introduced an evidence-based research method that offers you a number of plausible futures and contains potential surprises?
- How can you apply foresight? Do you have an innovation strategy that responds to different futures? Do you check your foresight and strategy annually?
- Have you developed your ideal vision for the future? Have you considered the tactical steps that will bring consumers and industry closer to this vision?
Your answers to these questions will help you identify the gaps in your innovation strategy. Do you react when customer needs change? Do you expect to proactively develop strategies? Do you go further by leading – by disrupting and redefining the market?
One final hint: Although the approach described in this article was developed long before COVID-19 changed our whole life, a global pandemic is nothing more than to expose many truths – including the need for a robust strategy that deals with the inevitable connects ups and downs no matter what causes them.
A global pandemic is nothing, if not effective, to expose many truths – including the need for a robust strategy that addresses the inevitable ups and downs.
For companies that have invested in the development of data-driven customer foresight before COVID-19, this crisis is a signal for one of their planned future prospects. What if Zoom had developed an innovation strategy that responds to different futures? How would the past months have been different for you? How about Slack?
How about your strategy How did you answer the three resilience questions above? If you are curious about how to start or how you can strengthen your innovation strategy, we would like to help you. Let’s talk.
This post was taken from the webinar “Innovation for 2030: four steps to data-driven customer provision. ”
Find out more about our expertise in design and innovation strategies and our experience in the field of medical device design.
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