The current crisis has only increased the need to innovate and be innovative. Business leaders the world over have had to pivot their products, services, distribution channels, and business models literally overnight. Ambitions and strategies around digital innovation have had to be fast-tracked. Right now innovation isn’t just a nice to have, it’s a requirement to survive and thrive.

Yet, innovation is hard and rarely successful. According to Harvard Business School professor Clayton Christensen 95% of new products fail and “most start-ups fail” says start-up guru and author of the Lean Startup, Eric Ries.  Why do so many innovations fail? Because, too many organisations still waste their time inventing solutions for non-existent customer needs! In a study of 2000 product innovation projects, Robert G. Copper, identified that the number one factor behind innovation failure was ‘a lack of thoroughness in identifying real needs in the marketplace’, with innovation teams often ‘making assumptions in order to justify the project’.

The best thing CEO’s can do right now is get their teams to focus on what their customers need. Organisations are actually pretty good when it comes to building products that work (feasibility) and managing the balance sheet and P&L (viability), but what they’re not so good at is identifying the real untapped customer needs that unlock opportunity and drive innovation. Identifying what customers actually need vs what they say they want is also easier said than done. Design Thinking is an approach (and mindset) that helps teams to both uncover these latent needs and keep the customer at the heart of the new product or service throughout the design journey. It typically comprises of 4-5 iterative phases:

Discover

The Design Thinking journey starts fully, once you’ve defined your project ambition and focus, by seeking next to understand your customer’s and non-customer’s needs within a defined opportunity space.  Unfortunately, I see too many teams either skipping it or brainstorming the customer needs, even if you’re brainstorming into a customer mapping tool like an Empathy Map, you are still just making it up unless you physically observe and talk to customers first. Good discovery is done through empathetic research techniques that help build empathy for who you customers are,  what is important to them and what pains and delights them.

Distil

It’s one thing to talk to your customers and another to distil what it actually means and where the opportunities exist to improve their lives. This is where curiosity, synthesising, sense making and insight skills come in handy.

For example, before TV show Top Gear became the global hit that it was, it was featuring more tech, gadgets and technical car talk than a rival show, yet it’s viewership and ratings were tanking. It wasn’t until they spent time understanding their target audience that they realised their target audience were more entertained by the camaraderie and banter that goes with cars more than the car tech itself. Only then did they become the global hit.

Ideate

As human beings we love jumping to the solution. When we are creating we are more in flow. However, when taking a Design Thinking approach we don’t start generating new ideas until now. This ensures we are generating ideas for problems customers want to see solved and offer the biggest source for competitive advantage. Design Thinking also helps your teams create successful new products and services by applying a creative attitude, behaviours, skills and state to problem solving. Allowing them to generate fresh new ideas rather than come up with the same old incremental ideas time and time again.

Experiment

Ideas alone aren’t enough. What are needed is relevant, value adding and actionable ideas, but how do we know which ideas to take into development? Traditional thinking would have us build business cases. Not only are business cases very time intensive and costly they also can’t predict the future and because your team’s ideas are new and don’t exist yet, there is no data on them to build an accurate and realistic business case.

A faster, less expensive and more accurate alternative is to take an experimentation approach to choosing which ideas to take into development and commercialisation. In experimentation teams quickly and cheaply prototype their solutions building the minimum required to make it testable. They then test these prototypes to validate their assumptions and gain learnings as to why they succeeded or failed. In a Design Thinking approach we start first by testing desirability (does the customer want it) and move rapidly into viability (can we make money from it) and feasibility (can we technically and organisationally build it).

Innovation for too long has had unnecessarily high rates of failure, because we focus 90% of our efforts and resources on building cool stuff that our customers don’t want. Taking a Design thinking approach is the key to creating great products, services and experiences your customers will love!

Nathan Baird is an internationally experienced speaker, facilitator, trainer and mentor. He is one of the world’s leading Design Thinking practitioners, a former Partner of Design Thinking for global management consultancy KPMG and founder of customer-driven innovation and growth firm Methodry. He helps teams build their innovation mastery and works alongside them to create new innovations. He is the author of the new book Innovator’s Playbook: How to create great products, services and experiences that your customers will love! For more information on Nathan’s work visit www.methodry.com