Strategic innovation Evolving innovative thinking by focusing on future users

1. Strategic innovationEvolving innovative thinking by focusing on future users Jon Sundbo Roskilde University Denmark

2. Basis for the comments • Case studies of service and experience firms • Experiments in service and experience firms (project ”When the customer encounters the employee”) • General reflections and case-examples

3. Why strategic innovation • Innovation is a risky business • The idea phase not the most difficult – that is the commercialisation phase • Firms want to introduce innovations that the market wants • Service firms have very little R&D and need to be pull-oriented • They have the advantage of meeting the customers • Their innovation process becomes customer oriented

4. What is strategic innovation ? • Innovation is about what people may want in the future • That is difficult to predict Firms can not rely on actual user-demands on the market – they can not find lead users • Firms are forced to choose a strategy: • Defensive: Try to guess what future users will want • Offensive: Try to determine what the future users will want (influencing life style)

5. How is strategic innovation practiced? • It is difficult to practice directly user-based innovation: Customers often have no ideas, particularly not for radical innovations • Strategic innovation is the indirect way to find what users may want in the future • Several methods

6. User analyses • Market analyses Examples: Surveys (how do people use web sites) Trend spotters (new food habits) Focus groups (social home service) • Anthropological approach Examples: Living in youth groups (music, clothes, everything) – acting as a tourist • Critical incidences Example: Interviews with victims of fire

7. User involvement • User communities Examples: Web-blogs (software firms, library) Help desk and complaints (travel agency) • User involvement in the innovation process Examples: Co-creation (NewInsight) – The idea and test phases (New services for mobile phones) • Value chain innovation (company-users as experts) Examples: Diary – wholesale – cafe Hotel - attraction – tour operator – press

8. Employee-based user-knowledge • Idea boxes Examples: Library, IBM, Venture Cup • Empathic innovation Examples: Waiters in a cafe Insurance agents • Employees as innovators Example: TrygVesta (insurance company) • Volunteers Example: Roskilde festival

9. Offensive strategy • Creating behavioral trajectory Example: Discount airlines discount airport terminals • Experience added (influencing life style) Examples: Cars – web pages – Levis jeans • Entrepreneurship – create the movement oneself Examples: Body Shop – Windmill industry

10. Reflexive strategy • The strategy must be regularly assessed (the innovations may be wrong - the world is changing) • Employees are involved (encounter ther customers) • New push-based innovations may come up (technology, R&D, intrapreneurship)

11. Sum up • Market or user based strategic innovation is about incremental innovation • Strategic innovation is constant hard work • It is about business development and solving problems/creating a better life – call it innovation or not • The methods must be developed and people trained in using them. Management must be committed and focused on innovation – and educated e.g. Project ”When the customer encounters the employee”