New ideas and innovation: hiding in plain sight?
What if businesses could learn to see the world differently? In science, this is something that happens every day. Changing your perspective in order to understand a problem in a new way is part of the scientific method. But most businesses don’t work like this. When they do, it can have a profound positive effect on innovation and performance.
Look at a fast-changing industry like mobile telecoms or personal finance and you’ll see companies get left behind as they struggle to shift their thinking. What’s holding them back? Mental models that are rooted in a mechanistic, rational view of the world. These sets of assumptions and generalisations do more than prevent companies from taking the right action – they act like blinkers, preventing them from even seeing or appreciating a new situation or a problem.
Blinded by a worldview
In his book The Fifth Discipline, MIT scientist Peter Senge recounts a story of Detroit auto industry executives visiting Japan in the 1980s. Witnessing Toyota’s production line for the first time, the visitors were simply unable to see it for what it was: a new method to allow maximum customisation with minimum stock. Because their mental models left them stuck with a particular way of seeing how cars are made, they assumed the new ‘just-in-time’ process was a confidence trick put on for their own benefit.
Another example of mental models, cited by Simon and Maria Robinson in their book Holonomics, is the contrast between Sony and Apple. Although Sony sells a far greater product range, across many more categories, it is criticised for failing to make an emotional connection with customers. Apple has become the dominant retail force. While Sony’s mental model of retail is that a store is a distribution channel, to Apple it’s an opportunity to create a customer experience where people can play with products as if they already own them.
Why traditional research fails to unveil important truths
How can businesses remove the blinkers that mental models impose on them? An important step is to take a different approach to research. Companies looking for the next innovation, or wanting to solve a particular problem, inevitably carry out some form of qualitative research. The problem is that traditional techniques often fail to uncover the important and often entirely unexpected truths that point to new ways of seeing the world and doing business.
Recently, we worked with a global financial services firm that had commissioned study after study over a five-year period to understand why a particular customer segment was losing them money. Because the firm had a mental model rooted in a mechanistic, rational view of the world, they built their value proposition almost entirely around a rational model of pricing versus value gained. The problem was that all the research they commissioned also had this implicit bias. As a result, they gained no fresh insights and continued to lose money from this group of customers.
The firm’s senior executives were not aware of its mental model until we showed them how it played out in the experiences of their customers. They watched open-mouthed as we presented our findings – their worldview had prevented them from seeing what was right in front of them.
There are two reasons why traditional research falls short. First, it often isn’t done thoughtfully enough. Companies ask irrelevant questions or allow their own biases to distort the answers. The second and more profound reason is that the research approach itself is often too shallow. It assumes that customers know what they want (when quite often they don’t); and that we should uncritically believe what the customer tells us (we shouldn’t).
How to shine a light on the insights that spur innovation
Customers believe they know what they want – and try to be honest with their answers. But human thought is complex. We all think both consciously and unconsciously. To acquire the really important customer insights – the ones that lead to new worldviews and new innovations – it is necessary to access the “unconscious reactive thinking” that largely dictates behaviour.
And to get at these important insights needs more than just straightforward qualitative questions. Interpretative Phenomenological Analysis (IPA) seeks to find these truths by gaining an “insider perspective” on whatever it is that’s being studied. While much research is led by questions that the company has defined, IPA aims to extract what the customer has to say about the value that they personally experience.
To achieve this, IPA research does three things. First, the researcher “brackets” or identifies his or her own assumptions and predictions in order to stay with the truth of what the interviewee is saying. Then, the researcher stays committed to discovering and describing what the interviewee has to say, without interpreting it or hurrying to understand it. Finally, the researcher maintains a belief that anything and everything may be relevant.
The aim is to understand customers’ emotional, rational and behavioural responses, using questions like this: “Can you tell me what place [insert services] have in your life at the moment?” Or “Can you describe how you feel when the [insert service] is missing?”
For example we worked with a niche engineering consultancy that had long-term contracts across the world. Its clients were happy, yet didn’t buy a maintenance contract once the main implementation was complete. IPA techniques uncovered that clients were simply unclear about the consultancy’s vision and strategy for the future, and this had affected their perception of it as a long-term business partner. Using this insight, the consultancy was able to make the changes it needed to increase retention and conversion.
A new way of seeing
Holonomics authors Simon and Maria Robinson say that: “to see well is an act of humility”. What this means for businesses is that they will gain deeper insights if they are able to put their own corporate egos to one side and see the world in depth from their customer’s perspective.
These insights may be staring people in the face, but only visible to those who use the right techniques to uncover them. Finding them gives businesses the spur to shift their mental models and make the transformative changes that are necessary to thrive in fast-changing markets.
Does your business have an opportunity to see things in a new way?
In our experience even the best and most effective organisations never stop learning. Customer-centric research can always unveil valuable insights:
Tacit knowledge – Often, people have valuable know-how they are not even aware of. Do your employees and customers know what they know?
Innovation – Successful companies find it hard to innovate. Could you develop the behaviour that helps it flourish?
New opportunities – Often, we find that simply gathering data is not enough to find the next route to growth. Could the answer be found in your customers’ feelings and emotions?
Please get in touch if you’d like to talk about these questions or any of the issues raised in this post.
Cindy Barnes is a business and psychology consultant. She is clinically trained in Transactional Analysis and uses this in her business work with companies.
Her background is in product and service innovation, business development and leadership. She is founder and Chief Innovation Officer at Futurecurve who are value solution architects and builders. Futurecurve helps companies navigate from a product ‘push’ focus to a true customer ‘pull’ focus, enabling them to out-perform their peers by delivering genuine value to customers. Customers include global corporations, governmental organisations, start-ups and not-for-profits. Contact Cindy on Twitter @cindy_barnes
All of Futurecurve’s qualitative research understanding customers is based on Transactional Analysis and Interpretative Phenomenological Analysis and we have combined these branches of psychology to create our world-class approach which uncovers both what customers think, how customers feel and how and why they behave as they do. We are pioneers in using Interpretative Phenomenological Analysis in business and in showing businesses the emotions and motivations of their customers.