Originally published October 22, 2014 on Harvard Business Review
by Doug Sundheim
Successful innovators care about solving interesting and important problems — innovation is merely a byproduct. If this distinction seems like hair-splitting, it isn’t. The two focuses create vastly different realities.
Focusing on innovating — as a worthy goal unto itself — tends to be born from self-centered motives: We need to protect ourselves from competitive forces. We need to ensure we have a growth engine. We need to keep up with other companies. To do all these things, we need to innovate. This is often a CYA perspective coming from an executive suite looking to protect its turf. It isn’t inherently bad. It’s just that this focus tends to create a culture where customers are on the sidelines, not in the center of the dialogue.
By contrast, focusing on solving interesting and important problems tends to be born from customer-centered motives: What’s going on with this set of customers? Where are they ecstatic? Where are they upset? Where do they feel good? Where do they hurt? How can we better serve them? These types of questions pull customer problems front-and-center and create a culture where that’s expected. And since people naturally want to solve problems, it pulls for innovation.
To illustrate, consider paint maker Sherwin-Williams, a company that has long been obsessed with solving painting contractors’ problems.
Twenty-five years ago while doing customer research, Sherwin-Williams uncovered an important insight: Contractors tend to make paint-buying decisions based more on proximity to job site than brand of paint. To them, time is money. This led to a hypothesis that saturating a market with stores to ensure there’s a store close to any job site will produce outsized market share growth. This was a new and innovative idea in a pre-Starbucks-on-every-corner world. Sherwin-Williams tested the hypothesis in four markets and it worked. But as they tried to roll it out to more markets, competitors quickly caught on. Suddenly it became a race for real estate and competitive advantage was lost.
Fast forward 20 years. During the 2009 recession, Sherwin-Williams’s competitors started shuttering stores in order to cut costs. Despite strong shareholder pushback, Sherwin-Williams did the opposite, opening 60–100 stores per year during the downturn. It was a risky bet, but they didn’t want to miss the opportunity to be close to customers when the market inevitably rebounded. When it did rebound, revenue growth far outstripped that of competitors. Sherwin-Williams’s stock price has quadrupled in the past five years.
So what’s the takeaway? Market saturation was an important distribution innovation, but it wasn’t what drove success for Sherwin-Williams. Success came from an unrelenting focus on solving contractor problems. That focus generated the initial innovation, but more importantly it generated the conviction to stick with the innovation when the going got tough.
When I asked Bob Wells, the Sherwin Williams SVP who shared this story with me, what he felt has driven the company’s success over the years, the word “innovation” never came up. But the word “customer” did — a lot.
“We’ve always looked at business more like dating than war,” Wells noted. “It’s a theme that runs through our 140-year company history. In war, you’re focused on beating the competition. In dating you’re focused on strengthening a relationship. That difference of perspective has a million knock-on effects for how decisions get made.”
Wells’s comment points to a truth so often missed in today’s let’s-get-some-innovation-in-here-quickly climate. Successful innovation is a mindset before it’s a process or outcome. It’s characterized by a dogged determination to see the world through your customers’ eyes. That mindset drives all the little details and decisions that can’t be captured in a process.
So how can you foster this mindset if it’s not already present in your organization? The simple answer is you just start doing it, even if you’re the only one. Disabuse yourself of the notion that innovation is some high-minded creative process reserved for a certain class of people. Remember that most great innovations have been developed by regular people inspired by a problem.
Get out of the building and talk to your customers. Listen to their challenges. Come up with back-of-the-envelope, harebrained ideas about how you can help them. Get comfortable with the idea that you’ll throw 99% of those envelopes in the trash. When you lose your motivation, go back to the problem statement. Never stray from the problem statement. Let it inspire you. Let it lead you. Also, stay mindful that problem statements shift and move. Never stray too far from your customers either.
Before long you’ll embody a customer-centered, problem-focused mindset. You’ll inspire others to start embodying it too. That’s the only way innovation ever really happens. Before all the fancy processes, there’s always a few people with a fire in their belly put there by a problem they can’t help but solve.
