During the conference on Open Innovation and the Globalization of Research organized by L’Usine Nouvelle on the 1st of December 2011, Claude Ricaud, Sr VP Innovation of the Power division of Schneider Electric presented his vision of innovation. Presans was there to report this vision.
A multi-source innovation model
We don’t use an iPhone in the same way we use a Nokia – Claude Ricaud, VP Innovation at Schneider Electric
Claude Ricaud first presented the multi-source innovation model that Schneider Electric implemented:
- Technological innovation: first, technological innovation (R&D) is necessary because it yields sustainable competitive advantages.
- Customer Innovation: then, innovation through use cases, which creates the most value for customers.
- Innovation market: finally, business innovation creates disruption and maximizes the captured value.
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Claude Ricaud then explained that when the three types of innovation above meet, we get a breakthrough innovation. He gave the example of the Iphone.
Indeed, the iPhone is first a set of new technologies, such as the TouchScreen (which, by the way, was not invented by Apple, but Apple was smart enough to source the technology). Then the Iphone is new uses: “We don’t use an iPhone in the same way we use a Nokia. The iPhone created new uses and therefore more value to the customer”, said Claude Ricaud. Finally, the iPhone is also a business innovation: Apple sells its iPhone for a premium and captures 30% of the revenues generated by the operator, which is a revolution in terms of business model.
Innovation design: a process driven by customer uses
The innovation process begins with a strategic intent.
- Discovery: The first step is to identify the customers’ “Pain Points”. To do so, we must listen, observe and discover. In other words, there is no need to ask the customer what he wants.
Which reminds us of Henry Ford’s famous quip: “If I had asked my customers what they wanted, they would have said a faster horse ‘, and not a car.”
- Ideation: once the “Pain Points” are identified it is time to come up with solutions. For this purpose, all methods are good (creative workshops, internal or external experts, etc.). At the end of this phase of creativity, we have potential innovations.
- Development & Experimentation: these potential innovations have now to be tested. Building a prototype proves the feasibility of the idea, and sets in on the track that leads to the market.
- Scale-up: Once the proof of feasibility is obtained, the innovation is industrialized to finally reach the market.
Discovering latent needs and trends
Claude Ricaud then explained that the value of innovation is related to the criticality of the need (“pain point”) of the client. To identify needs, collecting facts is essential. To access the “Mind of Customer”, we must avoid prejudices and favor observation in real environments: video, interviews, etc.
The example given by Claude Ricaud is the creation by Schneider of a system to store digitally all the documentations of electric boards installed by small installers. Before, such installers had no efficient system to store and retrieve paper documentation.
In summary, the role of the users is essential. They are a source of inspiration: we must discover their “pain points”, even those they don’t know of themselves, as well as find out what alternative solution customers develop on their own, as these can be a real source of innovation.
Claude Ricaud ended his presentation by providing some recommendations:
- Identify latent needs: “mind of customer rather than voice of customer”;
- Interview users by sharing and observing, but not with a questionnaire;
- Explore without doing market research;
- Manage a portfolio of innovations, rather than a portfolio of projects (it is as important to abandon projects as it is to pursue them – Schumpeter’s famous creative destruction);
- Increase customer value before business plan value.
iPhone Nokia image is available here.