Companies sliding into irrelevance focus too much on what they do and too little on what consumers need.
At Great State, we call this ‘Faster Horses syndrome’.
It’s where a business ends up focussing on incremental improvements to its current offering (doing things better), instead of focussing on meeting people’s needs the best way possible (doing better things).
Optimisation squeezes out innovation and, as a result, the experiences these companies produce fall well short of consumers’ expectations. As the FT recently pointed out:
“More often than not, ‘innovation’ is simply the latest — sometimes bizarre — iteration of an existing product, such as Lay’s cappuccino-flavoured crisps. Or it can mean a new type of packaging to broaden appeal or inject novelty: putting Marmite spread in an upside-down squeezy bottle instead of a glass jar. But developing a product that will make a sustained difference to sales and profits for years to come, is rare.”
Often, this isn’t because of any lack of ambition. Rather, a business is prevented from making more significant breakthroughs because it applies the wrong data, processes and mindset. So how do you avoid just iterating and really start innovating?
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Most organisations are ‘data narcissists’, only seeking to understand consumers relative to themselves.
This means that they have lots of insight on their brand perceptions and business performance. But they have little insight on consumers’ experience of the category as a whole – or how expectations are being raised by experiences from outside of the sector. So the data they collect is good for improving what the company does now – but it doesn’t help them understand what to do next.
The antidote to this is a much broader view of the consumer experience. Unlike optimisation, – where the focus is on perceptions and use of a particular brand, product or service – innovation requires a much deeper understanding of consumers’ expectations of an entire category.
At Great State, this means lots of first hand qualitative research. Rather than focus groups, which ignore the effect of environment, we often conduct research in situ. Sometimes it’s with extreme users rather than mainstream consumers.
But it’s always more about observation than it is about interrogation (rational, question-response style interviews).
That’s because we’re looking to understand situations, motivations, unmet needs and unconscious workarounds. Our goal is to identify opportunities in the all-important gap between consumer expectations and the reality of a category.
Over the last couple of years, this approach has taken us deep into the lives of high achievers who suffer from performance-related stress; we’ve worked alongside volunteers manning the tills of a high street charity shop; we’ve spent time at the Ministry of Defence with serving members of the armed forces; we’ve taken part in hotel staff training; and we’ve chatted to young urban footballers in their bedrooms about avoiding homework and playing FIFA.
Whilst useful context can be found in existing data (sources like sales, search or social) there’s no shortcut or substitute for this fieldwork. Often the most powerful insight comes from behaviours that can’t be easily tracked – the experiences that make up the ‘dark matter’ of people’s lives or that are only shared via ‘dark social’.
Most data only tells a company what consumers think of the status quo, so it inevitably causes a company to tweak, iterate and optimise.
As Benedict Evans of venture capital firm Andreessen Horowitz says:
“You can iterate with data (that is, ‘surf your users’), and you can discover that something you have isn’t working, but you can’t always create with data – you can’t use algorithms to work out what to invent.”
So if you want to avoid ‘Faster Horses syndrome’, it’s time to stop obsessing over shifting needles on your dashboard by a few percentage points – and to start trying to find out what consumers actually expect.
For more information on how we can stop your company from sliding into irrelevance, contact Matt Boffey here.