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What is your strategy for [fill in the blank] in 2016?

– Social
– Mobile
– Internet of Things
– Omnichannel
– Adtech/Martech
– eCommerce
– Big data
– 3D printing

Focus Area chart

Brand innovators everywhere agree anything to do with mobility is the highest priority [63%] according to a recent global study I helped lead along with Jerome Buvat of CapGemini Consulting over the last 8 months. We set out to study the focus of he top 200 global brands (according to reported revenue).

But it wasn’t just technology these companies were seeking to better understand. We learned that big brands around the world are investing in physical innovation centers in Silicon Valley and around the world to rapidly test and prototype solutions for all of the above. That’s just the beginning however.

Main Focus

If you take a step back and look at the topline trends, the main focus of these innovation centers is also examining the deeper understanding of customer needs [35%]. That’s wonderful as people should always come first. It also seems to me that these innovation centers have things backwards. It should never be technology first. Without knowing the expectations, behaviors and values of digital customers, innovative technology is left without purpose. And, without purpose, technology is merely a means without an end. I learned this time and time again in my work in studying digital transformation.

In addition to analyzing over 309 innovation centers, we also interviewed brand innovators who are paving the way for the 35% focusing on customer needs including Sephora, Westfield, AT&T, Wells Fargo, Walmart, MasterCard among others.

These ambitious companies, we learned, increasingly want to understand rapidly evolving consumer behavior. The ubiquity of smartphones and connectivity has created new behaviors. Purchase cycles that customers had followed without change for many years are now being redrawn completely. This focus on customer-driven innovation is echoed by Mark Brodeur, Global Head of Digital Marketing Innovation at Nestlé, who observes that “We really needed to better understand how consumer behavior was changing as a result of technology, so that our brands were able to stay ahead of the curve versus playing catch-up.”

Debbie Brackeen, Citi Ventures, says that the mission of their innovation centers is to “pioneer and test new disruptive solutions for our customers, testing new business models and technologies that advance our position in the market… We’re looking at making significant impact to the overall business and not just incremental changes.”

When you focus on customer needs, technology activates new solutions.

Walmart’s internal search engine, for examples, was developed by Walmart Labs in 9 months and wound up driving a 20% increase in online sales conversions right of the gate.

Staples’ innovation lab helped launch a digital wallet service in 9 weeks — Staples’ fastest deployment ever.

Zappo Labs enabled Zappos to launch its “Ask Zappos” digital personal assistance service in just 12 weeks

The ability to innovate on the outside is only surpassed by the ability to innovate inside. We also heard that these innovation centers served as a strategic way to break out forward thinkers from the confines of a risk-averse or “business as usual” culture. This gave way to not only new ideas but also the exploration of new ideas with the ability to test and learn from them.

Ruth Yomtoubian, business innovation lead at AT&T Foundry told us, “Our innovation center lets us take on risks that the rest of the organization may be unwilling to take on.”

According to eMarketer, other research emphasizes consumer demand for innovation. Nearly two-thirds of US corporate executives polled by Lithium in May 2015 cited increased pressure to innovate as a way in which rising customer expectations had affected their firms. And companies are responding. In May 2015 polling by KPMG, 27% of CEOs worldwide cited fostering innovation as a strategic priority for the next three years, and a quarter ranked it as one of the most critical challenges they expected to face during the same timeframe.

The digital economy offers a solution and an inspiration for the perennial challenge of successful innovation. As a brand innovator, you now stand at the intersection of disruptive technology, irrelevance and innovation. It’s the steps you take from here that count for everything. Innovation centers are becoming a way of business. Digital customers and the technology they use to discover, connect and transact is only going to continue to evolve and eventually immobilize disbelief in business as usual.

It’s time to think like the customer and act like a startup.

Download, The Innovation Game: Why and How Businesses are Investing in Innovation Centers on Slideshare.

brian-solis.jpgBrian Solis is a digital analyst, anthropologist, and also a futurist. In his work at Altimeter Group, Solis studies the effects of disruptive technology on business and society. He is also the author of WTF: What’s the Future…of Business.

Comments for this Post

One Comment

  1. Great points. It needs to be customer needs before technology. Only after you understand your customers and what they want will you be able to invest in the technology that is the right fit.

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by Brandon Gutman
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Brandon is an expert connector and seasoned business development professional. As Principal of Brand Approved, he's led the advisory to become the bridge between brand marketers and best of breed service providers that are reshaping the industry.

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