When (base) client is not customer. Problem of missed innovations.
Long story short: working IT product management gave me the additional insight on the topic which I cover in my long-term PhD thesis focused on innovation transfer from academia to business (mainly SMEs). As I am responsible for in.a. writing requirements from clients and customers, I found out… wait! Who is customer and who is client first at all?
That’s the case. Many persons just say: user. It is cool word but not enough specific. A person can use a product/service as well as a company can do so. Let’s then divide users into customers (a person who actually takes action with your product/service) and clients (a person or company who pays for your product/service). There is a lot of products/services in which a customer and a client is the same subject e.g. Spotify. If you are premium user, then you listen music via Spotify and at the same time pay monthly fee. The interesting case is when a customer and a client are not the same subjects and moreover have different needs or perspectives for a product/service.
Such a case happens a lot when e.g. executives of a bank (top level management) decide to develop new version of software for internal employees without asking them what should be done in next product. Results of such an approach can be counterproductive. What would happen if we introduce a concept of base client i.e. a subject who pays for the solution and doesn’t take any action with it?
This case we can find in many countries which decided to support innovation development. Actually, all developed states have got some innovations policies and funds reserved for it (even USA in which e.g. Google got their first money from public source to develop a tool for searching scientific databases). Some countries, especially from continental Europe (it means from Spain to Russia excl. anglo-saxon model of UK), are really pushing many resources to develop innovative products and services. In such a model, a government serves as base client.
A government provides requirements (in a form of e.g. National Innovation Policy that country wants to build space satellites to make better GPS for citizens) and funds for external teams or organizations to realize it. Sometimes it is a duty of university or research organization and sometimes business takes the responsibility. Nevertheless, at some point the innovation is created e.g. new module for space satellite. Quite rarely the new innovation is used by government agencies themselves as many governments haven’t got capabilities to use it directly (e.g. cannot shoot satellite). Therefore, the innovation needs to go to market via some business. Here the first problem can occur. Nobody has asked if business would like to use the new module of space satellite. If business says no, then… the short life of innovation can be dead-ended. However, let’s assume that business says: “Hooray, the new module for satellites. We will shoot it into space and make so awesome GPS”. They do so, spend a lot of resources and finally new GPS reach us, customers who use it in daily life… And we see no difference: “Meh, did you really do anything because it works the same or even sometimes worse?”. It happens too much often.
What’s the general point? Nobody talks (for real) with others, thinking they have got a real problem and ideal solution at their hands. That’s why so many public innovation requirements and funds miss their goal and so many companies miss their product with target customers. There are some solutions for it:
- talk but really talk (discuss) your ideas with experts, potential customers/clients, citizens etc.;
- make smaller products, not bigger ones, no matter how sexy is big idea;
- take small steps in your public funding so you can fail quicker and less losses (it applies to business too);
These are basics but still I haven’t seen many case studies of public subjects following them. Business itself can state that they are obvious but again, not many of them actually practice it. The created infographics focuses on left side on government but it can be easily replaced by business and it will still be valid.
