Innovation – A New Match Between Need and Solution

Guest Post: by Ralph-Christian Ohr

While revisiting some collected innovation readings, I recognized that it might be important to briefly emphasize again one “fundamental”: the distinction between needs and solutions.

According to Christian Terwiesch, co-author of “Innovation Tournaments”, innovation is defined as “… a new match between a need and a solution so that value is created.” The novelty can be in the solution, in the need or in the match. In all cases, this new match results in a specific market, leading to a demand for the solution. Customers hire solutions they perceive to serve their particular needs best. Customer perception and buying decision are based on conscious as well as unconscious drivers.

It’s the innovator’s job to come up with solutions capable of meeting those needs. In order to increase likelihood of market success, customers become integrated in the innovation process. However, the meanings of needs and solutions are often blurred while talking about customer requirements. Example: Don Norman asks in an insightful talk which I definitely recommend watching: “Is there a fundamental need for indoor toilets?” Is he actually talking about a customer need or a demand for a specific solution?

Don Norman at IIT Design Research Conference 2010 from IIT Institute of Design on Vimeo.

Dev Patnaik highlights the distinction between both in a Business Week article named “Needs + Solutions = Innovation”:

Understanding this distinction can affect how you listen to your customers, how you conceptualize new products and services, even how you analyze existing markets to create new strategic platforms. (…) Without an attention to both needs and solutions, a company can find itself optimizing products for a set of needs that no longer exist.

Lance A. Bettencourt has addressed some related assumptions in an article worth reading. I’d like to reference and comment to two of them here:

Assumption: ‘Customers Can’t Articulate Their Needs’

Bettencourt: “The myth that customers cannot articulate their needs is perpetuated by innovation success stories such as the microwave, the Sony Walkman and (more recently) the Apple iPod and iPhone. The story goes something like this: “If you had asked customers, they couldn’t have told you they needed the iPhone. Therefore, it must be true that customers cannot articulate what they need.” But there’s the rub: However brilliant it may be, the iPhone is not a customer need. The iPhone – like the microwave and Walkman before it – is a solution to a customer need. When companies get solutions and customer needs confused, it confuses the role of the customer and the company in the innovation process. Customers articulate their needs; it is up to the company to create a solution. It is not the role of the customer to provide technology ideas to the company, or even to evaluate the potential for a new technology to satisfy their unmet needs. How would they know? They are not technology experts. Confusing these roles leads to infamous stories, such as those recounted in the Fortune article, in which customers have rejected now-successful innovations. But the truth is that those customers were not guilty of being unable to articulate what they needed; they simply could not evaluate whether a proposed new technology would satisfy their needs – quite a different task. When customer needs are defined in a manner that distinguishes them from solutions, not only can customers articulate their needs, but those needs become the valued foundation of the innovation process requires.”

Point: If customers are involved in the front end to provide information on solutions instead of needs, they will likely tend to stick to solutions they already know and are familiar with – customers usually don’t leave existing regimes they are used to. Their valuation and beliefs are biased by these regimes. This restricts the innovator to come up with a novel solution that would even be better suited to meet the needs. The proper evaluation of needs by means of direct and indirect customer integration bears higher innovation potential than involving customers in the solution development. The more radical an innovation, the more it differs from existing offerings (if at all available). As existing solutions act as ‘benchmark’ for users, their input tends to be limited when it comes to the development of more radical innovation. However, research indicates that some customers are better than others at imaging how concepts address needs.

Assumption: ‘Customers Don’t Know What They Need’

Bettencourt: “Such misguided thinking is especially apparent when product managers speak about new-to-the-world innovations. “If the solution we’re going to propose does not yet exist,” the managers say, “then how can customers possibly know that they need it?” But again, the managers are confusing solutions with needs. (…)

The truth of the matter is that customers “hire” solutions to help them get jobs done. When we define customer needs around the jobs that customers are trying to get done, then we can see that new innovations – even the most radical or disruptive innovations – do not create a customer need. They simply satisfy a customer need in an innovative way. Furthermore, if a company can learn how customers evaluate how well they’re able to get jobs done using today’s solutions, then it can learn precisely where customers have needs that are currently unmet by any solutions – fertile ground for innovation.”

Point: Innovation doesn’t create a need. It creates a demand for the innovative solution, depending on how well the solution is able to satisfy functional or emotional needs. In case of radical innovation, the novel solution based on new technology and/or a meaning change, is entirely different to existing ones. This kind of innovation mostly disrupts current or creates new markets by leaving existing regimes. It matches needs of an innovative minority first, rather than being driven by the majority of  existing markets, being bound to the existing regimes. An analytical understanding of innovation, such as the ‘jobs-to-be-done’ approach followed by Bettencourt, aims at finding solutions for defined needs and finding needs for defined solutions, respectively. This presumes that customer needs are basically accessible and can be predicted. In case of uncertainty, i.e. if needs are not (yet) well-defined, an interpretive approach seems to be more indicated for innovation. Needs evolve and change often unforeseeable with time due to cultural, technological, economical or environmental reasons. It’s a matter of ‘foresight’ to be able to envisage those evolutions, e.g. through participating in interpreting networks. By combining vision and empathy, anticipated needs can be addressed by innovative solutions. Ideally, a ‘proposal’ becomes adopted by the market, or as Roberto Verganti puts it in his book: “That was outside the spectrum of possibilities of what people knew and did. But it was not outside what they could dream of and love, if only someone could propose it to them.”

Takeaway: The distinction between needs and solutions turns out to be crucial. Innovation is a result of a novel match of need and solution – and requires proper consideration of their different contributions to the process. Offered products and services are being positioned and valued on the basis of the customer’s personal frame of reference. This is constituted by the variety of functional and emotional needs. Given that analysis and interpretation are complementary approaches to innovation, customer orientation comprises

  • orientation towards the customer, i.e. translating defined customer needs into innovative solutions, and
  • orientation of the customer, i.e. coming up with innovative proposals to ‘mirror’ and shape emergent needs.

One of my favourite articles, “The Innovator’s DNA” outlines required skills an innovative person should possess to be successful. I think there is another one to be added to this list: abstraction. For me, abstracting from solutions to needs seems to be a prerequisite for innovators as well. If innovators focus on solutions, it will limit how they perceive the customers’ actual needs. Appropriate approaches to separate needs and solutions, i.e. solution-neutral and truly empathic front ends of innovation, are indicated.

What do you think?

Experienced innovation, technology and product management professional. Looking at the intersection of organizational and personal innovation capabilities. Integrative thinker. Boundary spanner. Author of the Integrative Innovation blog. You can follow him on Twitter @ralph_ohr.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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14 thoughts on “Innovation – A New Match Between Need and Solution

  1. Hi Ralph,
    Great post on a key topic. I completely agree that needs and solutions are not the same and with the fact that even today many a product managers and even some of the top firms confuse the two.

    This brings up another but related topic that I have been telling people when talking about social media – the absolute necessity to really listen to the customers. It is always easier for a firm to ‘assume’ the needs based on analytics or internal brainstorming or some panel, then go innovate a product and then force it on customers with a label of an innovative solution/product/service.

    It is a much more difficult but definitely more beneficial route to start with the customer in understanding their needs AND the context and then either find the right match of solutions or create a new solution.

    One last point re: “Innovation doesn’t create a need”. While that is generally true, I think the matter is a bit more convoluted. There are behavioral changes that do happen as a result of innovation – of course, one can debate on whether these are real or just perceived needs. As an example, if one were to do an hypothetical survey of kids 30yrs ago vs today I am sure there will be list of “needs” from kids of today that came out of the innovations in the digital world. I am not necessarily postulating here that the digital innovations created those needs but for sure the innovations brought in desires that were not a priority before or behaviors that were previously never considered or encouraged.

    Regards,
    Ned

  2. Thanks for the great comment, Ned.

    As I tried to describe above – if it’s basically possible to determine needs (according to the analytical understanding of innovation), solutions need to be based on proper listening to customers and experiencing the context the solution is used in. You’re right that just assuming needs in this case may lead to lacking adoption.
    I think it’s a different for interpretive innovation as needs are not yet well- defined. Therefore, proposals need to put forward.

    Your last thought is quite interesting and made me thinking! In the post I was trying to make a point on the difference between needs and demands for solutions. So the question for me is: can solutions create (fundamental) needs or rather demand for further innovative solutions to fulfill the underlying need?

    Cheers, Ralph

  3. Hi Ralph,

    Thanks for your post. It’s interesting that you identified ‘abstraction’ as a critical skill of an innovative person. My colleagues and I agree. Like you, we speak of it in terms of going from solutions to needs.

    However, we find equally that innovative people are those who are able to work with abstract needs (meaning needs that don’t specifically reference a solution or feature), and use them to generate concrete solutions. Some people with whom we work see jobs and outcomes and immediately think of the possibilities in terms of solutions (it’s very exciting when this happens), and others get stuck because they are so uncomfortable outside of the confines of current solutions.

  4. Thanks for your valuable comment, Lance.

    I’m quite happy to see the cited author himself has noticed this post :-)

    Moreover, it’s good to hear you agree on abstraction as required skill for innovation. My understanding of abstraction is pretty well reflected by what you describe further: working on the abstract level of needs without referencing solutions. As I tried to point out, focusing on solutions in an early phase may restrict the solution space and increases the likelihood of incremental steps only.

    All the best,
    Ralph