The Best Source of Innovation?

The best companies (B2B) I’ve worked for during my career were highly innovative, and they continuously innovated. But the source of their innovation was not:

  • Whiz-bang Technology
  • Genius Personnel, or
  • Competitive Research

What was the source, you ask? Well, the type of innovation those companies practiced was…

Customer-Driven Innovation

The most successful B2B companies I’ve worked for practiced Customer-Driven Innovation.

What do I mean by “customer-driven innovation”? I mean:

Innovation driven by a deep understanding of customer needs.

A deep understanding of: Not just what the customers asked for, but also why the customers asked for it. And the business problem customers were trying to solve, or the business objective they were trying to meet.

Advantages of Customer-Driven Innovation

I believe customer-driven innovation offers B2B companies several advantages, including:

  • Higher odds of success: When your innovation is driven by actual customer needs, I believe your odds of success are much higher. When it’s driven by technology or competition, your odds of success are likely to be much lower – i.e. hit or miss.
  • Can be systematized: The process of creating successful innovation based on customer needs can be systematized, whereas the process of relying on one or more people’s epiphanies or Eureka moments cannot be.
  • Repeatable: This follows from the previous point. Once a process is systematized, it can be taught to others in the company and can be repeated.
  • Scalable: When the innovation process is systematized and taught to others – it can be used not only to enhance existing products, but also to launch new products in the same market, in adjacent markets or even new markets. All of which leads to a business that can scale.

Editor’s Note:
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Michael Shrivathsan

I'm your author, Michael Shrivathsan, an expert in product management with successful experience at several innovative companies in Silicon Valley, USA over the past two decades. I'm also a USPTO patent recipient. For my day job, I'm the VP of Product Management at Accompa, we make the popular requirements management software used by Product Management, Business Analysis, and related teams.

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