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Disruption, and what consumer research can learn from Henry Ford

by Olly Robinson , 25.04.2012

I’m a relative newcomer to the ideas behind disruptive innovation (when Clayton Christensen first published The Innovator’s Dilemma, which provides an evidence-based framework for how new entrants to a market can displace the incumbents by introducing products and services that compete asymmetrically, I was still at school).

When I did, eventually, come across Christensen’s work, I could probably have skipped over the majority of the evidence part; as a market researcher in the tech sector, I only had to look around at the changes taking place in the computing and telecoms markets.

"If I'd asked my customers what they wanted, they'd have said a faster horse" Henry Ford

As a framework for understanding how markets evolve, disruption is a seductive idea. Just looking at the theme for this issue of TechTalk (retail), it is possible to quickly reel off a list of innovations that either are, or could potentially, disrupt the retail space in the coming years. As a starting point, how about contactless payments, 3D printing, or the continuing growth of mobile and e-commerce, and resultant changes in the nature of bricks and mortar retail stores?

However, identification is only halfway to application. With my market researcher hat on, I was left with more questions than answers; in particular, when reading around the topic I kept coming across the quotation above. The truth behind Ford’s sentiment, so the argument went, was that consumer research has little role to play in innovation.

So how, if at all, should disruptive innovation harness consumer insight?

Ask a silly question, get a silly answer

Regardless of whether their input is directly sought, consumers sit at the heart of the product development process. Ultimately, their needs can only be met in the finished product if they are correctly identified and understood from the outset. But what’s the best way of understanding those needs?

Taking a step back from disruptive innovation, the majority of products and services are developed as small variations or enhancements to existing products. In the best part of these cases, consumers understand the original product, appreciate how it fits into their lives, and are therefore able to provide often specific input into what would improve it. Typically, this is in the form of additional features or functionality, and market research has a widely acknowledged role to play here.

However, input isn’t available for disruptive innovations. By definition, products and services with disruptive potential exist outside established markets, meaning consumers can neither visualise their experience with the product nor how it would fit into their lives. They might want a car, but until they know what one is they can only describe a faster horse.

Should we therefore exclude consumers from the disruptive product development process altogether? Not necessarily, but it does necessitate a more considered approach to framing their input. Rather than focusing on features and functionality, conversations with consumers should be orientated towards the underlying needs they want to fulfil, and, in particular, the problems they encounter with existing solutions. The disruptive solution may be inconceivable to them, but a nuanced understanding of their current experiences and frustrations offers the first signpost for getting there.

A needs model such as TechNeeds, which we use at GfK, is especially useful for brands to help navigate this space. Based on significant research input, the TechNeeds model maps consumer needs to key dimensions that remain consistent across different contexts and tech categories.

Beneath the cornerstones of the model sit a sub-set of dimensions, so in security, for example, we will have a range of dimensions including safety, privacy, reassurance etc. Our work has shown these to be consistent drivers of successful product innovation. This allows us to:

  1. Work with brands to ensure that their product road map is meeting genuine needs in the market.
  2. Build an international framework for innovation, critical in the technology sector.
  3. Visually map the opportunity for development – what needs are being catered, where is the white space – so we can rapidly start identifying new opportunities.

Actions speak louder than words

Of course, asking consumers about their needs and problems isn’t the only research approach. Indeed, disruptive innovations have often emerged from new entrants to the market. Typically limited by much smaller research budgets, their innovations tend to be derived from observation rather than direct consumer interaction.

Much of this observation can take place ‘live’, gathering anecdotal evidence from the people around us as we go through daily life. What are they trying to achieve? What problems are they encountering while doing so? The results can provide a more accurate picture of how people interact with products and services than recalled behaviour. While the speed of the horse may be what springs to mind for a consumer who is asked what would improve their experience, observation might suggest reliability and maintenance (not to mention smell…) are more pertinent problems in day-to-day usage.

Good market research (which can, of course, include a range of observational techniques) adds depth and clarity to the more subjective, anecdotal evidence we observe as part of daily life, but the nature of disruptive innovation can make it hard to know what to look for. It is here where the dominant market players hold the strongest, but most rarely-played, cards.

Typically, established businesses have access to numerous consumer insights, collected from countless research projects. Many of these projects were most likely driven by specific business questions relating to sustaining innovations (those minor improvements to existing products and services), but taken together, and mined for further insight into unmet consumer needs, they constitute a richer web of consumer experiences than anyone outside the market has access to. When placed in the context of a needs-based framework, such as TechNeeds, these experiences become building blocks for disruptive innovation.

The speed of the horse doesn’t matter if it’s heading in the wrong direction

Ultimately, disruptive innovation, as with sustaining innovation, is reliant on consumers. Their experiences and perceptions underpin what the product or service is setting out to achieve, and a development process that does not involve them from the outset risks misinterpreting those same needs and frustrations that it aims to meet and solve.

By the same token, in the realm of disruptive technologies, consumer input needs to be carefully managed. They cannot guide innovations they are unable to conceive, and as a result, their feedback will often be framed in the context of the same marketplace that brands are trying to disrupt. Understanding what consumers want to do is more important than how they envision doing it.

While the importance of observation has traditionally enabled new entrants with limited resources, the businesses most vulnerable to disruption – established brands – typically already have a wealth of consumer data that can be mined for these insights. Leveraging them effectively can ensure that businesses are strategically aligned with potential disruptions, preventing the asymmetric competition that empowers new entrants.

Henry Ford’s quotation should not be taken as a dismissal of consumer perspectives, but as a reminder not to take them at face value. If he had asked one of his customers what they wanted, they might have said a faster horse, but if he had asked enough of them the right questions, he would have ended up with the list of problems that his Model T went on to solve, (and maybe even the smell!).