Needs + Solutions = Innovation

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HOW BIG A MARKET?

Japanese manufacturers saw it as an ideal way for businesses to send time-dated documents back and forth. Japanese Kanji script didn't lend itself to transcription by Teletype, and the Web was still a few years away. But these companies ran into trouble when they tried to gauge the size of the potential market for fax machines. After all, no such market existed yet.

To solve that problem, the manufacturers measured the need of possible customers for fax machines by measuring the volume of business done by same-day couriers in Japan. They believed that their new facsimile solution solved the same need as couriers -- the need to send documents quickly.

The huge size of the courier market surprised them, and they reasoned that even a small piece of that business would generate profits. While the solution itself, the fax machine, was difficult to evaluate, the need for it, was much more easily quantifiable.

BRIDGE VS. CANYON.

As simple as the concept may be, needs and solutions are a framework that too many companies confuse. More often than not, they mix the two together. Consumer packaged-goods companies, for instance, have spent millions of dollars over the last decade conducting "need state research" -- the use of complex math to analyze and aggregate statements customers make about why they purchase the products they do.

Invariably, those statements amount to a list of feature attributes of products that already exist. In effect, they're a list of solutions. This research fails to inform companies of possible customer needs and the opportunities they might have in supplying them.

As companies spend more time focusing on innovation, the demand is increasing to think beyond existing solutions. In the words of one designer at Ford Motor (F), "I keep begging the marketing guys: Don't tell me you want a bridge. Show me the canyon you want to cross."

Understanding the difference between a bridge and a canyon is as close as it comes to an innovation fundamental. Like supply and demand, needs and solutions are the basics on which further concepts are built. And like any fundamental, mastering it early won't guarantee success. But it sure can help avoid a lot of pain along the way.

Dev Patnaik is the Managing Associate of Jump Associates. Jump helps companies build new businesses, define new products and services, and create cultures of innovation.