By Vikki Nowak
This article first appeared in Innovation Leader Magazine, Issue No. 3, Fall 2016. Reprinted with permission.
No one disputes the value of data. Google, Facebook, Uber, and many far-smaller companies have proven that data is a precious commodity, especially within platforms. Internet of Things products are flooding the market, and generating new kinds of data. But oddly, while the widespread recognition of the value of data capture is influencing innovation, it has not yet noticeably changed the ways we innovate. As a result, companies are missing out on potentially transformative white-space opportunities.
Virtually everyone who works in consumer product development lives by the mantra of user-centricity (or customer-centricity) in the early stages of product ideation. User-centered research grounds and defines the problem and shapes the target market personas. We work this way because it’s proven, straightforward, and tangible: first research pain points, then brainstorm solutions, and finally design products.
Data capture is still overlooked. The ingrained innovation methodologies of focusing on the consumer’s pain points are blinding many companies to bigger solutions. Too many are not thinking early enough or strategically enough about data collection. Even those that are thinking about data early tend to default to using the native capabilities of current generations of smartphones and tablets as their starting points (“we need an app for that.”)
We propose a new method, which we call Data-First Innovation. This method does not replace user-centricity—it remains as important as ever—but moves it further down the timeline. Data-First Innovation challenges companies to begin the ideation with the abstract, rather than the tangible, and to fully realize the three-fold promise of data collection—better solutions, new revenue streams, and new value networks. This is the path to true white-space opportunities, especially for traditional consumer products or service companies.
We propose a new method, which we call Data-First Innovation. This method does not replace user-centricity—it remains as important as ever—but moves it further down the timeline.
Ideating without a user-centric focus can feel uncomfortable. When we help partner-clients ideate in this way, the process includes:
- Identifying global trends that align with corporate goals, core competencies, and supply chain relationships.
- Defining the richest and most valuable data that you would like to collect, agnostic of any feasibility constraints at first.
- Identifying entities—inside or outside your organization—that would put a premium on that data.
- Using data consumer personas to generate blue sky ideas and map all of the data points that would be most valued by these personas.
- Mapping customer-centric and data-centric design concepts to see where they align. (In a Venn diagram, where do these two key constituencies meet, in terms of needs?)
- Outlining a value exchange ecosystem. (Determine what interactions would make your company the link between consumers’ unmet needs and the data personas you’ve developed.)
- Ideating on how to collect the data based on user-centered design principles.
- Validating the data value chain and, if relevant, the monetization model.
The ecosystem then leads to ideation of products and services, and results in much richer solutions for all end users in the value chain. By stepping back and speculating first—articulating and thinking through the “wouldn’t it be great if” scenarios—you can develop products and services that deliver value to the end users, generate the desired data, and then deliver the data (and inherent value) along and up the value exchange cycles, with your company as the hub. That centrality is why we advise thinking beyond what current phones and tablets can do. We believe that consumers will embrace new devices if their capabilities exceed those of app-based alternatives, and if they too benefit from the data.
That latter point is key. Mutual benefit is essential to a successful ecosystem. Progressive Insurance’s SnapShot device plugs into a car’s onboard computers and collects data related to driving habits. This gives customers the chance to reduce their insurance rates by proving that they are careful drivers. The device also beeps when the driver brakes hard, providing real-time feedback that can help the driver improve. This feature was not chosen randomly; data gathered by SnapShot devices has shown that hard braking is the most powerful indicator of high-risk driving.
The lessons from gathering data can be sold or traded outside an ecosystem, or used to incubate whole new ones. Healthcare innovator GlaxoSmithKline partnered with a Grand Prix racing team to learn how it gathers and manages data at races, which “has helped us improve how we capture clinical trial data in real-time,” they say, with wearable or remote biosensors.
As more and more of our clients seek solutions that are Internet of Things (IoT) based—business models and concepts that infuse their core capabilities into externally connected smart devices interlocking far more powerful methods of data collection—we’ve found this data first thinking approach to be extremely powerful.
John Nottingham, one of our firms’ co-founders and its co-president, frequently shares this observation when speaking with our clients:
“Having been involved in the business of innovation for over 45 years, you certainly see enough to understand that innovation is a very ‘adapt or die’ space to operate within. Our successful track record and ability to adapt our processes over such a long period of time is an essential trait.”
“Harnessing the power of a more outside-in, data-first point of view—and connecting that with the well-established and well worn path of customer-centric design, has yielded new, unique solutions. We are helping our client-partners see and define completely new lines of business and multi-year product roadmaps, rich with collected data and ancillary data service based revenue streams. The horizons and vistas we are jointly exploring with clients that IoT has unlocked is a transformative, evolutionary leap forward for all industries and market categories.”
The guardrails of user-centric focus can help prevent catastrophes, but they also keep everyone in the same lane. Data-first thinking offers companies the chance to forge new paths, transforming themselves, and perhaps their industries, in the process.
Contact Nottingham Spirk to discuss how your organization can take innovation to the next level.
About us: Nottingham Spirk is a business innovation and product design firm with an unrivaled record of delivering disruptive consumer goods, medical devices, and packaging design solutions to market. We collaborate with Fortune 1,000 companies, funded start-ups and non-profit organizations to discover, design and execute product programs and strategic business platforms that will wow customers, grow markets and generate new revenue streams. Learn more about what makes us different here.