There are two distinct ways to innovate: in response to the customer, and on behalf of the customer.

Innovating in response to the customer is where they lead and we follow. We look at VoC data and decide what improvements to make. This is what most people think of when they talk about being customer centric, and how most large organizations approach things because it’s efficient.

Innovating on behalf of the customer is us deciding what we think is a great idea, then seeing if customers dig it. Many of our ideas won’t work — this approach is riskier and inefficient — yet this is how entrepreneurs tend to approach things, and where most breakthrough ideas come from. Why?

Innovating in response to the customer leads to predictable, incremental enhancements. There is less risk, but less potential reward. Innovating on behalf of the customer opens the doors to wild ideas which might fail, but if they succeed the returns can be phenomenal — more than enough to offset the misses.

This explains the paradox of Steve Jobs, who famously scorned traditional research yet also seemed profoundly customer focused — he innovated on behalf of the customer, accepted the risks, and reaped the rewards. As do Dyson, Tesla, Red Bull and Amazon, among others. #innovation #customerexperience

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