Here’s what Australia’s top ten most innovative companies do differently

As the methodology partner behind the AFR’s Most Innovative Companies List, Inventium has access to a whole heap of data about how Australia and New Zealand’s most innovative companies manage their innovation programs. We gather information from hundreds of companies about aspects relating to their innovation process, their innovation skills and capabilities, their organisational culture, their approach to innovation strategy, the types of innovations that they launch as well as the commercial and customer impact of those innovations.

What’s of most interest to me though, is that we also collect data about how companies engage with their customers throughout the innovation process, and at what stages they do this. As huge advocates of customer-driven innovation at Inventium, I was very keen to find out how the most innovative companies engage their customers and whether this had any bearing on their overall performance compared to the companies that either don’t involve their customers or involve them less often. I was obviously hoping that the data would confirm my hypothesis that the strongest performing companies in innovation involve their customers more often.

I know that involving customers in innovation is not new news, yet you might be surprised by how many sceptics are still out there lurking, throwing around one-liners like: “customers don’t know what they don’t know” or the famous Henry Ford quote: “If I’d asked customers what they wanted, they’d have said faster horses”. But I’m a firm believer that any successful innovation always addresses an unmet customer need or problem. Otherwise, it just wouldn’t be successful. Habits are hard to change and customers wouldn’t go to the effort of changing their behaviour and adopting a new innovation if it wasn’t offering them something, solving something or creating value for them in some way. They just wouldn’t. So it’s up to us to observe our customers, ask the right questions and to find their ‘jobs to be done’.

Because behind every great innovation is an unmet customer need that someone has taken the care and has the curiosity to find.

So back to the data and what it said. The first encouraging finding was that there weren’t ANY companies who made the 2018 AFR Most Innovative Companies List that don’t involve their customers at any stage of their innovation process. Every single one of them involve their customers at some point. Pretty compelling huh?! What’s more, the companies who made the top ten on the list involve their customers to identify unmet needs for innovation, 90% involve their customers to prototype and test their ideas and 90% involve their customers when developing their innovation strategy. It’s very clear that these companies are well and truly customer-led!

As I sifted through the data, I also wanted to understand what the biggest difference was between the companies that made the top ten on the list versus those that didn’t when it came to customer engagement… and here’s where it really got interesting…

The top ten most innovative companies were 2.5 times more likely than anyone else to engage their customers when developing their innovation strategy. 

That is, they are far more likely to explore relevant customer trends and identify compelling customer problems that need solving when they’re setting their strategy and identifying their focus areas for innovation.

So if you’re coming up against sceptics in your organisation who aren’t completely sold on the power of engaging customers to drive innovation, you’re now well-equipped to convince them otherwise. Because the evidence is unmistakably clear; the customer must absolutely be at the heart of innovation for the biggest impact.

Have a great week!

Zoe