Tuesday, November 3, 2009

Customers Drive Product Innovation

Posted by Mark Brousseau

Customers and in-house R&D teams are now the leading source of innovation for U.S. businesses, while globally customers are an organization's best source of innovation, according to new research from Grant Thornton International Ltd. When asked to name the origin of the best innovation ideas, U.S. business owners named customers (37%) and in house R&D teams (37%) as their leading sources of innovations followed by heads of business units (34%) and employees (32%). Globally, 41 percent of businesses say that customers are their leading source for innovation.

"In recent history the tech boom and the creation of internet social networking sites brought innovation and entrepreneurship into every American home," said Harris Smith, Grant Thornton LLP's managing partner for Private Equity and the Audit practice leader of the firm's Southern California offices. "Without entrepreneurs and innovation, America couldn't thrive."

Regionally the report reveals that in Asia Pacific customer focus is a particular source of innovative ideas and products with nearly half of businesses (48%) citing customers as the source of the best innovative ideas, compared with 40 percent in Western Europe and 35 percent in North America.

In addition, more than three in four businesses globally (78%) believe that the U.S. is the easiest country to create innovative products, services and business. The U.S. is the clear leader in this, with the next highest countries being China (22%), India (22%) and the U.K. (21%). Regionally, the U.S. is also seen as the leading country with 77 percent of Asian-Pacific businesses, 84 percent of North American businesses and 71 percent of European businesses saying it is the easiest country to create innovative products, services and business in.

"With the history of innovation in the U.S. spanning from the country's earliest beginnings, it's not hard to understand why businesses around the globe see America as the land of innovation," said Smith.

1 comment:

Jeff said...

Mark,

Interesting stats on customer driven innovation. My question is why are B2B companies so hesitant to engage their customers in "conversations" using social media tools that are readily available at a nominal investment? Conversations are already taking place, whether they like it or not.

Customers are a passionate group of people that believe enough in a company to vote for the solution that solves their problems, with dollars.

Companies can certainly tap into this resource and not only gain additional innovative ideas, but also instill greater a passion within the customer base for the company itself.

I would think successful companies are the ones that can tap into the customer base and energize it better than the competition for even greater product innovation.