Product Development

• Lecture 8, Oct 29, 2021

• Concept generation, Customer needs

• Kumiko Miyazaki

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 Outline
• Sources of innovation
• Concept generation process
• Internal and external search
• Knowledge push
• Push or pull innovation
• Classification of customer needs
• Types of product innovation
• Exploit or explore
• Von Hippel’s lead users
• Extending external connections
• Use the Web
• Customer needs analysis
• Customer needs example, thermostat
• Needs statement
• Brainstorming and creativity 29/10/2021 2
 Product Development Process

Concept System-Level Detail Testing and Production

Planning Development Design Design Refinement Ramp-Up

Mission Concept System Spec Critical Design Production

Approval Review Review Review Approval

Mission Development
Statement Identify Establish Generate Select Test Set Plan Plan
Customer Target Product Product Product Final Downstream
Needs Specifications Concepts Concept(s) Concept(s) Specifications Development

Analysis of customer needs begins the development process.

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Where do innovations come
from?

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 Sources of Innovation
"Creativity isisjust
"Creativity justhaving
havingenough
enough dots
dots to connect
to connect … …”

… to connect
Steve Jobs experiences and synthesize new things.
The reason creative people are able to do that is that
they've had more experiences or have thought more
about their experiences than other people.”

Steve Jobs

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Concept Generation Process
Decompose
the
Problem

Search Search
Externally Internally

Explore
Systematically

Reflect on the
Solutions and
the Process
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Developing Ideas and Solutions:

External + Internal Search

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 External Search:
Finding Existing and Related Solutions

Patents Market Users

• Search • Benchmarking • Lead users

• Licensing • Competition • Extreme users

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PDD
 Internal Search:
Brainstorming to Explore the Solution Space

Stimulation Connection Transformation

• Related stimuli • Build on ideas • Refinement

• Unrelated stimuli • Gallery method • SCAMPER method

persona

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PDD
 Knowledge Push
• Stems from Scientific research
• At Bell Labs, ICI, Bayer, Philips, GE, Du Pont founded in the 1900s, a
steady stream of innovations emerged

• Industrial chemicals, Electrical appliances, Automobiles, etc. not only

products but processes

• Nylon, Polyethylene, Microwave, Fibre optics, Photocopier, Hovercraft,

Transistor
• Polyethylene is a key material innovation in the 20th C, leading to a
consumption of 63m tonnes per year. Discovered by a chemist working at
ICI in the UK, in 1933

• It has gone through incremental and occasional breakthrough innovations

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•
Need Pull
Innovation requires some kind of demand.
• Innovation is often the response to a real or perceived need for change

• We need to develop a clear understanding of needs and find ways to

meet those needs

• Recent research has focused on ethnographic studies (understanding

what people do, how they use products or services)

• Need pull innovations are especially important in mature stage of

industry or PLC

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 Push or Pull Innovation?
- The reality is that innovation is never a simple matter of push
or
pull but rather their interaction; as Chris Freeman, one of the
pioneers of innovation research said, ‘necessity may be the
mother of invention but procreation needs a partner!’.

- There is a risk in focusing on either of the ‘pure’ forms of push or pull

sources. If we put all our eggs in one basket we risk being excellent at
invention but without turning our ideas into successful innovations –a fate
shared by too many would-be entrepreneurs.

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Steve Jobs was interviewed by Inc. editors George
Gendron and Bo Burlingham.
INC.: Where do great products come from?
JOBS: I think really great products come from melding two
points of view—the technology point of view and the
customer point of view. You need both. You can't just ask
customers what they want and then try to give that to
them. By the time you get it built, they'll want something
new.
INC.: You mean the technology is changing too fast.
JOBS: Yeah, and customers can't anticipate what the technology can
do. They won't ask for things that they think are impossible. But the
technology may be ahead of them. If you happen to mention
something, they'll say, "Of course, I'll take that. Do you mean I can have
that, too?" It sounds logical to ask customers what they want and then
give it to them. But they rarely wind up getting what they really want
that way.
INC.: It's got to be equally dangerous to focus too
much on the technology.
JOBS: Oh, sure. You can get into just as much trouble by “Customers don’t know
going into the technology lab and asking your engineers, what they want.”
"OK, what can you do for me today?" That rarely leads to
a product that customers want or to one that you're very
proud of building when you get done. You have to merge
these points of view, and you have to do it in an interactive
way over a period of time—which doesn't mean a week. It
takes a long time to pull out of customers what they
really want, and it takes a long time to pull out of
technology what it can really give. 29/10/2021 13
Reference: Inc. Magazine 1989 interview: http://www.inc.com/magazine/19890401/5602.html
 A Classification of Customer Needs

• Easy for customers to

express
Explicit • Widely known and
understood
• Likely to be already fulfilled

• Easy for customers to

Unfulfilled express
• Known to be difficult to
address
• Generally not fulfilled

• Hard for customers to

Latent express
• Not yet widely understood
• Currently unaddressed

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PDD
 A Classification of Customer Needs

stable seat

Explicit

compact folding
Unfulfilled

style
Latent

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PDD
Needs Exist in Advance of the Product/Service
Customer Needs for Space Flight
• Experience zero gravity
• Enjoy the view
• Have fun
• Return safely

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Door Locks Study:
Careful observation
identifies latent needs.

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 Observing Tacit Knowledge
• Customers have knowledge they cannot readily explain.
• Be aware of user solutions and unintended uses.
• You may not know what to ask… so observe carefully!

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“It’s hard to clean the broom”

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 Customer Needs Example:
Bicycle Locks

1. Quotes

2. Photos

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 Customer Quotes
• I wrap cushy tape around my lock to keep it from
scratching my bike.
• How do you carry something this heavy?
• I hate having to walk around looking for something my
lock will fit to.
• I keep my lock attached to my bike because otherwise I
would forget it at home.
• How am I supposed to tell my lock apart from my
roommate’s?
• With winter gloves it's impossible to open.
• How can I feel 100% sure that my bike is safe?
• I sometimes forget my key at home.
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PDD
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 Caveats
• Capture “What, Not How”.
• Observe real customers in the use environment.
• Collect visual, verbal, and textual data.
• Interviews are more efficient than focus groups.
• Interview all stakeholders and lead users.
• Props will stimulate customer responses.
• Develop an organized list of need statements.
• Look for latent needs.
• Survey to quantify tradeoffs, if necessary.
• Use photos or video to communicate results.

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Types of product
innovation

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Exploit or explore?

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 Exploit or Explore?

- On the one hand firms need to deploy knowledge resources and other
assets to secure returns and a ‘safe’ way of doing so is to harvest a steady
flow of benefits derived from ‘doing what we do better’. This has been
termed ‘exploitation’ by innovation researchers, and it essentially involves
‘the use and development of things already known’.

- The trouble is that in an uncertain environment the potential to secure and

defend a competitive position depends on ‘doing something different’, i.e.
radical product or process innovation rather than imitations and variants of
what others are also offering. This kind of search had been term
‘exploration’ and is the kind which involves ‘long jumps or re-orientations
that enable a firm to adopt new attributes and attain new knowledge outside
its domain’.

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• Creating possibilities (keeping track of what others are doing along the R&D
frontier)

• Identify and working with needs

• Select from knowledge push possibilities

• Most of the time, innov. is about exploiting and elaborating variations on a theme
within an established technical trajectory but occasionally there is a
breakthrough which creates a new trajectory

• Much of our attention in searching for innov. triggers around incremental

improvements but we need to consider longer range type innovations which
might lead to breakthroughs

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 Von Hippel’s Lead Users
• Typical current users’ insights into new product needs is constrained by their
real world experience.

• The typical users of existing products are unlikely to generate novel product
concepts that conflict with the familiar.
• He proposed that Lead Users who do have real life experience with novel
product or process needs are essential. He defined lead users as;
• Lead users face needs that will be general in the marketplace but they face
them months or years before the bulk of that marketplace encounters them.

• Users who expect high rents from a solution to a need are driven by such
expectations to attempt to solve their need.

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• According to von Hippel, pick up trucks did not originate in
Detroit but on farms.

• Farmers adopted their cars (removing seats, welding new pieces

on, cutting off the roofs )

• Later Detroit picked up the idea and incremental innovations

began

• Engage with Lead users to co create innovative solutions

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 Customer Needs and Markets

Mainstream Customers
Market Size

Lead/Extreme Users

Common Special
Specificity of Needs
• Lead or extreme users may experience needs more strongly than others.
• Customers with specific needs may be in small market segments, but
their needs may indicate important directions for larger markets.

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 Extreme users
• Extreme environment as a source of innovation. Users
in such environment can be a powerful source of
innovation, meeting challenges could provide new
opportunities

• Pay as you go credit in the Phillipines has become a unit

of currency
• Tata – developed a car Nano which sold for 2000 $
which meets emission controls, provides a level of
features to satisfy the middle class, is a significant
innovation
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 At Hyundai
• When they reintroduced Santa Fe in the US
market in 2007
• ‘Touch the market’ was their development
agenda
For developing an SUV for moms, the team would do an extensive study of
their activities and life styles

• Eg. They visited an ice skate rink and

watched an Olympic medallist skate around,
to learn about GRACE and SPEED
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 How Many Customers?
100
Percent of Needs Identified

80

60
One-on-One Interviews (1 hour)

Focus Groups (2 hours)

40

20

0
0 1 2 3 4 5 6 7 8 9 10
Number of Respondents or Groups
From: Griffin, Abbie and John R. Hauser. “The Voice of the Customer”,
Marketing Science. vol. 12, no. 1, Winter 1993.

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 Watching others

• Reverse engineering
• Benchmarking – a firm makes structured comparisons with others

Recombinant innovation
Working old ideas in new concepts

Reebok running shoes. Was a product innovation but it drew on

core ideas which were widely used in a different world. A team
consisting of members such as a paramedic equipment specialist,
operating theatre equipment specialist, were recruited as team
specialists with diverse industrial and professional background

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 Example: Minimonos

On the Portal there is a video interview with Melissa

Clark-Reynolds which highlights some of these
issues

http://www.innovation-
portal.info/resources/minimonos-melissa-clark-
reynolds-2/

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 Extending external connections

- Search strategies include:

- Sending out scouts

- Exploring multiple futures
- Innovation markets
- Working with active users
- ‘Deep diving’
- Probe and learn
- Corporate venturing
- Use brokers and bridges

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 Extend external connections
• In an IBM survey of 750 CEOs, 76%
ranked business partners and customer
collaborators as top sources for new ideas

• Sending out scouts (Sending out people to

search actively for new ideas to trigger the
innovation process. ) BT has a scouting unit
in Silicon Valley which assesses some 1000
tech. opportunities a year.
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• Info market place
Use the Web
eg. InnoCentive connecting the use of
scientific problems with those being able to offer solutions

• Secondlife.com, role playing game. People can create

different characters for themselves and interact with each
other, hence creating a powerful lab for testing out ideas

• Communispace To discuss product concepts

• Deep diving – originating from the field of anthropology (to

gain insights through observation by immersing oneself in the
day to day life of the object of study.

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 Example: Innovation market

The platform InnoCentive.com is an example of an

interesting innovation market

• the core model at InnoCentive is to host ‘challenges’ put

up by ‘seekers’ for ideas which ‘solvers’ offer;

• the model offers around a 30% solution rate;

• the approach is particularly relevant for large and well-

known R&D-intensive firms

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 Examples: Innovation markets

• InnoCentive currently has around 200 000

solvers of diverse background;
• Diversity of potential scientific approaches to a
problem is a significant predictor of problem-
solving success;
• Solvers are often bridging knowledge fields –
taking solutions and approaches from one area
(their own speciality) and applying it to different
areas;
• Innovation occurs at the boundary of disciplines.

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 Customer Needs Analysis:
Process Steps
1. Define the Scope
– Mission statement
– Stakeholders
2. Gather Information
– Interviews
– Focus groups
– Observation
– Ethnography
3. Interpret Customer Data
– Write need statements
– Organize in a hierarchy
– Identify latent needs
4. Quantify Relative Importance
– Focus on the trade-offs
5. Reflect on the Process
– Continuous improvement
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Customer Needs Example:
Nest Learning Thermostat

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 Mission Statement

Product Description
•A programmable thermostat for residential use
Benefit Proposition
•Simple to use, attractive, and saves energy
Key Business Goals
•Product introduced in Q4
•50% gross margin
•10% share of replacement thermostat market in 4 years
Primary Market
•Residential consumer
Secondary Markets
•Residential heating, ventilation, and air conditioning contractors

Assumptions
•Replacement for an existing thermostat
•Compatible with most existing systems and wiring
Stakeholders
•User, Retailer, Sales force, Service center, Production, Legal
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department
 Primary Customer Needs
1. The thermostat is easy to install.
2. The thermostat lasts a long time.
3. The thermostat is easy to use.
4. The thermostat controls are precise.
5. The thermostat is smart.
6. The thermostat is personal.
7. The thermostat is a good investment.
8. The thermostat is reliable.

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 Five Guidelines for Writing Needs Statements

Needs Statement -
Guideline Customer Statement Needs Statement - Right
Wrong

“What” not I would like my iPhone to The thermostat can be The thermostat is
“How” adjust my thermostat. controlled remotely accompanied by a
without requiring a downloadable iPhone
special device. app.
Specificity I have different heating The thermostat can The thermostat is
and cooling systems. control separate versatile.
heating and cooling
systems.
Positive not I get tired of standing in The thermostat can be The thermostat does
Negative front of my thermostat to programmed from a not require me to
program it. comfortable position. stand in front of it for
programming.
An Attribute of I have to manually The thermostat An occupant’s
the Product override the program if automatically presence triggers the
I’m home when I responds to an thermostat to
shouldn’t be. occupant’s presence. automatically change
modes.
Avoid “Must” I’m worried about how The thermostat The thermostat must
and “Should” secure my thermostat controls are secure be secure from
would be if it were from unauthorized unauthorized access.
accessible online. 29/10/2021
access. 47
 Complete List of Customer Needs
** The thermostat is easy to install.
*** The thermostat works with my existing heating and/or cooling
system.
** The thermostat installation is an easy do-it-yourself project for a
novice.
** The thermostat can control separate heating and cooling systems.
* The thermostat can be installed without special tools.
The thermostat is easily purchased. Latent Needs
Secondary Needs
* The thermostat lasts a long time.
The thermostat is safe to bump into.
The thermostat resists dirt and dust.
! The thermostat exterior surfaces do not fade or discolor over time.
The thermostat is recyclable at end of life.
Primary Needs
*** The thermostat is easy to use.
** The thermostat user interaction is easy to understand.Importance
* The thermostat is easy to learn to use. Ratings
* The thermostat does not place significant demands on user
memory.
! The thermostat can be programmed from a comfortable position.
The thermostat can be controlled remotely without requiring a
special device.
! The thermostat works pretty well right out of the box with no set up.
The thermostat’s behavior is easy to change.
The thermostat is easy to control manually.
The thermostat display is easy to read from a distance.
The thermostat display can be read clearly in all conditions.
The thermostat’s controls accommodate users with limited dexterity.
The thermostat accommodates different conventions for
temperature scales.
The thermostat accommodates different preferences for
representing time and date. 29/10/2021
** The thermostat controls are precise.
** The thermostat maintains temperature accurately.
The thermostat minimizes unintended variability in temperature.
The thermostat allows temperatures to be specified precisely.
*** The thermostat is smart.
*** The thermostat can adjust temperature during the day
according to user preferences.
** The thermostat can be programmed to a precise schedule.
! The thermostat automatically responds to occupancy.
! The thermostat prevents pipes from freezing in cold months.
The thermostat alerts the user when a problem arises.
The thermostat does not require users to set time or date.
The thermostat adjusts automatically to the seasons.
* The thermostat is personal.
* The thermostat accommodates different user preferences for
comfort.
The thermostat accommodates different user preferences for
energy efficiency.
The thermostat controls are secure from unauthorized access.
The thermostat provides useful information.
*** The thermostat is a good investment.
** The thermostat is affordable to purchase.
*** The thermostat saves energy.
* The thermostat tracks cost savings.
** The thermostat is reliable.
The thermostat does not require replacing batteries.
The thermostat works normally when electric power is suspended.
48
Individual + Group Creativity

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 Research on Brainstorming and Creativity
Generating Ideas and Value of Dissent and Debate
Group Creativity in Group Creativity
Combined France US

Debate
Condition

Brainstorm
Condition

Brainstorm = “using the brain Minimal

to storm a creative problem— Condition
and doing so in commando
fashion, with each stormer 10 20 30
attacking the same objective.” Mean # of Ideas (20 min.)

Ref: Alex Osborn, Your Creative Power Ref: Charlan Nemeth, et al., “The
– How to Use Imagination, New York: Liberating Role of Conflict in Group
Scribner & Sons (1948) Creativity”, Eur. J. Soc. Psychol. (2004)
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 Internal search – brainstorming
principles
• Define the problem or objectives clearly.

• Generate as many ideas as possible.

• Do not allow any evaluation or discussion.

• Give everyone an equal opportunity to

contribute.

• Write down every idea – clearly and where

everyone can see them.

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 Group Creativity (Brainstorming)
Some Common Rules Setting It Up
• Defer judgment of ideas • Advance prep
• Build on the ideas of others • Stimulating space
• Encourage wild ideas • 4 to 8 people
• Express ideas visually • Paper and markers
• Stay focused on the topic • White boards
• One conversation at a time • Coffee and snacks
• Use stimuli related to the topic • Skilled facilitator

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 Internal search – brainstorming
principles
When all the ideas are listed, review them for clarification,
making sure everyone understands each item. At this point
you can eliminate duplications and remove ideas the group
feels are no longer appropriate.

Allow ideas to incubate. Brainstorming sessions with

perhaps a few days in between. This gives time for the
team members to let the ideas turn over in their mind,
which often results in new ideas at a later session.

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Concept Sketches

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 Research on Expression and Creativity
Make Plenty of Sketches – Build Sketch Models –
Even if you can’t sketch well The sooner the better

• Quick, simple, physical models

• Spatial reasoning is challenging • 3D using foam, clay, cardboard
• Words are inherently inefficient • Very helpful to understand form,
• Sketches often work better user interface, spatial relations
• Sketch quality is not so critical – • Earlier modeling is linked to
just express the key concept better design outcomes
Ref: MC Yang (2009) “Observations on Ref: A Häggman, T Honda, MC Yang
Concept Quantity and Sketching in (2013) "The Influence of Timing in
Design” Research in Engineering Design Exploratory Prototyping and Other
Activities in Design Projects"
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ASME Design Eng’g Tech Conf.