{"id":6803,"date":"2019-02-13T10:46:01","date_gmt":"2019-02-13T10:46:01","guid":{"rendered":"https:\/\/www.openbusinesscouncil.org\/?p=6803"},"modified":"2019-02-13T10:46:01","modified_gmt":"2019-02-13T10:46:01","slug":"why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy","status":"publish","type":"post","link":"https:\/\/www.footballthink.com\/why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy\/","title":{"rendered":"Why Understanding Real Customer Needs Is The Key To A Successful Innovation Strategy"},"content":{"rendered":"
\"Why
Why Understanding Real Customer Needs Is The Key To A Successful Innovation Strategy<\/figcaption><\/figure>\n

The key behind our innovation strategy<\/a>, one of our 7 strategies for running a more profitable business in a complex world, is to \u201cjump\u201d the firm to a new position through the creation of novel product solutions.<\/p>\n

Product innovations can have a dramatic effect on the market in a relatively short time period, although producing innovations usually requires a long period of research and development activity, change to production systems, productising scientific breakthroughs, acquiring patents etc.<\/p>\n

For the innovation strategy to be successful, the firm would typically need to be able to charge premium prices, to recoup the additional R&D costs. This would work where there is a segment of demand that is willing to pay to get the unique benefits conferred by the innovation.<\/p>\n

Innovation can be guided where we have clear insights into underlying customer needs that may not be met by the existing products on the market. Thus, the innovation strategy shifts the firm to servicing customers who are prepared to pay premium prices to acquire new and superior products.<\/p>\n

\n
\n

For the innovation strategy to be successful, the firm would typically need to be able to charge premium prices, to recoup the additional R&D costs<\/p><\/blockquote>\n<\/blockquote>\n<\/blockquote>\n

Let\u2019s consider an example of an innovation strategy by NetJets<\/em><\/strong>. NetJets is a world leader in private aviation. It offers part ownership and rental of private business jets through selling \u201cfractional ownership\u201d in aircraft which gives the owner a share in the use of the aircraft.<\/p>\n

NetJets history goes back to 1964 (then called Executive Jet Aviation) when it became the first business jet charter and aircraft management company in the world. However, the real innovation came about much later. In 1984, an entrepreneur, Richard Santulli, purchased Executive Jet Aviation and introduced a \u201ctime share\u201d concept of fractional ownership previously applied to resort properties. NetJets sells a fraction of a specific aircraft, chosen from several available types at the time of purchase. The fractional owners are then entitled to access that aircraft \u2013 ranging from 50 hours to 400 hours, depending on the level of ownership \u2013 with as little as four hours\u2019 notice.<\/p>\n

NetJets innovative product is delivered at a higher cost than alternative executive travel options because of the nature of the product and service \u2013 that is, tailored jet usage \u2013 which involves high-cost inputs, such as leasing expensive private jets. But there is a segment of air travel customers that are prepared to pay a premium for this exclusive service.<\/p>\n

\"netjets\"
Richard Santulli\u2019s ultimate innovation was moving from this basic idea of a \u201ctime share\u201d for executive jets to a fully functioning and profitable business<\/figcaption><\/figure>\n

Over time, we can see how Richard Santulli\u2019s ultimate innovation was moving from this basic idea of a \u201ctime share\u201d<\/em> for executive jets to a fully functioning and profitable business. This involved intense interaction and knowledge sharing across a diverse range of experts, including pilots, IT specialists, ground handlers, aircraft suppliers and providers of finance. It is one thing to come up with an innovative idea, but turning that idea into a profitable business often represents the more significant challenge. NetJets, to its credit, has overcome the many problems and challenges that emerged along the way, and succeeded in executing its innovation strategy.<\/p>\n

At the heart of achieving product innovation is the creation of new knowledge. New knowledge and its application drives product breakthroughs. It is therefore no surprise that the practices most commonly associated with innovation are related to knowledge creation and knowledge management.<\/p>\n

A sample set of practices consistent with implementing an innovation strategy are as follows:<\/p>\n

Culture:<\/strong><\/p>\n

    \n
  • A culture which values importing knowledge from \u201coutside\u201d and which encourages and rewards the generation of new ideas and promotes constructive collegial rivalry<\/li>\n
  • Inspiring visions that motivate<\/li>\n
  • Management attitudes which encourage experiments, expects some \u201cfailures\u201d and recognises learning from them<\/li>\n<\/ul>\n

    Structure:<\/strong><\/p>\n

      \n
    • Forming of \u201cloose\u201d, fluid, temporary project teams which can generate new knowledge by enabling specialists with complementary knowledge to interact<\/li>\n
    • Create time and space for interaction<\/li>\n
    • Vertical integration to speed up coordination, change processes and the pace of innovation<\/li>\n
    • Joint ventures, alliances and cross-organisation collaborations<\/li>\n<\/ul>\n

      Systems: <\/strong><\/p>\n

        \n
      • Place many \u201cbets\u201d but have timely appraisals so that failing projects can be \u201ckilled\u201d and resources can be readily redirected to more promising projects<\/li>\n
      • Frequent trialling of prototypes with high-quality feedback<\/li>\n
      • Recruitment and retention of talent is a strategic priority<\/li>\n
      • Capture the best brains, and \u201clock out\u201d competitors<\/li>\n<\/ul>\n

        Article by Cliff Bowman and Paul Raspin, co-authors of What\u2019s Your Competitive Advantage?: 7 Strategies for running a more profitable business in a complex world, published by FT Publishing, priced \u00a319.99<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

        The key behind our innovation strategy, one of our 7 strategies for running a more profitable business in a complex world, is to \u201cjump\u201d the firm to a new position through the creation of novel product solutions. Product innovations can have a dramatic effect on the market in a relatively short time period, although producing […]<\/p>\n","protected":false},"author":7,"featured_media":6805,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":""},"categories":[4563],"tags":[3711,3514],"acf":[],"yoast_head":"\nWhy Understanding Real Customer Needs Is The Key To A Successful Innovation Strategy - OpenBusinessCouncil Directory<\/title>\n<meta name=\"description\" content=\"Product innovations can have a dramatic effect on the market in a relatively short time period, although it usually requires a long period of development\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.footballthink.com\/why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Understanding Real Customer Needs Is The Key To A Successful Innovation Strategy\" \/>\n<meta property=\"og:description\" content=\"Product innovations can have a dramatic effect on the market in a relatively short time period, although it usually requires a long period of development\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.footballthink.com\/why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy\/\" \/>\n<meta property=\"og:site_name\" content=\"OpenBusinessCouncil Directory\" \/>\n<meta property=\"article:published_time\" content=\"2019-02-13T10:46:01+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.footballthink.com\/wp-content\/uploads\/2019\/02\/innovation-strategy.gif\" \/>\n\t<meta property=\"og:image:width\" content=\"1380\" \/>\n\t<meta property=\"og:image:height\" content=\"717\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/gif\" \/>\n<meta name=\"author\" content=\"Hernaldo Turrillo\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Hernaldo Turrillo\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.footballthink.com\/why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.footballthink.com\/why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy\/\"},\"author\":{\"name\":\"Hernaldo Turrillo\",\"@id\":\"https:\/\/www.footballthink.com\/#\/schema\/person\/b9610afd0759dc701187a7f622375c23\"},\"headline\":\"Why Understanding Real Customer Needs Is The Key To A Successful Innovation Strategy\",\"datePublished\":\"2019-02-13T10:46:01+00:00\",\"dateModified\":\"2019-02-13T10:46:01+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.footballthink.com\/why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy\/\"},\"wordCount\":799,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.footballthink.com\/#organization\"},\"keywords\":[\"business resources\",\"guidebooks\"],\"articleSection\":[\"Open Innovation\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.footballthink.com\/why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.footballthink.com\/why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy\/\",\"url\":\"https:\/\/www.footballthink.com\/why-understanding-real-customer-needs-is-the-key-to-a-successful-innovation-strategy\/\",\"name\":\"Why Understanding Real Customer Needs Is The Key To A Successful Innovation Strategy - 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