2.Theoretical Framework & Methodology

2. Theoretical Framework &

Methodology

This chapter defines the theoretical concepts used in this article in paragraph 2.1. The methodology applied in this article is reflected in paragraph 2.2.

2.1. Theoretical Framework

Innovation

An innovation is not an invention. An invention only becomes an innovation if it has passed through production and marketing tasks and is diffused to the market place (Trott, 2002). Thus the discovery should go further from the lab to production and will also add economic value to a company and is diffused to others than the discoverers (Garcia & Calantone, 2001).

Latent customer needs

A customer is the end-user of a product or service. This can be existing customers or new customers to an organization. In B2B settings this often means that the focus is not on the buying customer, but on their customer or end-user. Latent needs are the needs of customers that are currently implicit, unarticulated or hidden for the customer and the researcher. The customer is either not aware of the need or is not willing to share this need.

Discover stage

Identifying latent customer needs is a typical activity for the first stage of an innovation process (as depicted figure 1). It is an activity that leaves room for divergent thinking to understand the ture problems and needs of a customer.

Figure 1: The four phases of an innovation process: the latent need discovery takes place in the discover stage.

Customer focused innovation

In customer driven innovation, there are many approaches that are being used and they can be categorized in three different types (Desouza et al, 2008):

Innovation for the customer (customer focused innovation; innovation is still done by the organization) Innovation with the customer (customer centered innovation; organizations and customers create innovation together) Innovation by the customer (customer driven innovation, the customer is the key player— innovation is done by customers, with minimum involvement by the organization.)

The focus of this paper is on innovation for the customer, in which innovation is still done by the organization with the customer in mind. This is chosen as a starting point because many organizations can still gain a lot from becoming more mature in applying these methods first.

Customer focused innovation methods can serve different purposes. Figure 2 shows an overview of the different methods that can be applied to each serve a purpose from collecting explicit knowledge to latent knowledge. Similar to Schein’s culture triangle where he distinguishes between underlying assumptions, espoused values and artifacts, the assumptions are what shape a culture or need with a customer. Since it is key that we identify explicit and latent needs, this article focuses on providing insights into applying methods for explicit, observable, tacit and latent knowledge.

Figure 2: Categorization of different types of customer focused innovation methods according to Sleeswijk Visser et al., 2005

Table 1 shows the categorization used as a framework in this article. For each type (inquiry, observation and generative) two methods were chosen, based on discussions with Deloitte consultants on the most commonly used and effective methods. The table below provides an overview of the methods, their goals and set-up. The details of the six methods are explained in the next chapter before each case study is presented.

Type Inquiry

Observation Name

Immersive interviewing

Participant diaries

Customer ethnography

Digital ethnography

Goal

Understand daily life activity, pains and gains

Engages users from afar over a period of time that enables them to document and reflect on experiences in real-time Understand current experience, use of product or service

Understand customer behavior by observing and analyzing available (social media) data

Activity

Semi-structured interviewing in natural setting

A diary, collage or photo journal made by the customer to get an overview of experiences Watch a customer perform a certain task in real life Collect notes Gather required data through open sources/launch app

Data collected

Notes Photos

Analog or digital input of pictures, text, videos

Pictures Videos Notes

Behavioral data (location, mood, activity)

Examples

Interview people while performing a certain task, such as shopping Food logging Collage of your perfect home

Observe people have breakfast with their family

Analysis of vitality data collected through Fitbit

Generative

Customer journey mapping

Context mapping Map the highs and lows of a customer experience for an existing or new product Grasp the context in which a service or product is used Ask customer to explain the steps, used tools and experiences Customers visualize and design their context Map with visuals and notes

Visuals, collages Map the shopping, delivering and unpacking experience Map a desired state of use for a digital platform

Table 1: Customer focused innovation methods in scope for this article (Rosenthal 2006, Sanders 2000, Delft Design Guide 2013)

2.2. Methodology The main methodology used in this article is case study analysis. This analysis was performed for the six customer focused innovation methods.

Each case study starts with a paragraph “about the method” which is based on a literature review. This answers research question 1 “What are customer focused innovation methods?”

The six case studies answer research question 2 “How can customer focused innovation methods be applied in practical situations?” The case studies are all based on one hour interviews with Deloitte innovation practitioners from across the globe. Each case study deals with the same elements:

Situation: the context in which the method was applied in a client engagement Goal: the desired outcome of the customer innovation method Process: the steps taken to apply the method Results: the deliverables created to present the outcomes Reflection: lessons learned by the consultant

Research question 3 “What can we learn from applying customer focused innovation methods in practice?” is answered by analysis of the lessons learned by the author of this article.