Innovation Potential – 7 Criteria for Good Problems

Innovation potential is where the market and customers have a problem

Everyone is looking for the honey pot, the uncultivated field and the “low hanging fruits”. In short: innovation potential that is worth investing in. For example, as a product innovation or as a new business area. But where is the honey pot?

A successful innovation always solves a relevant problem. A relevant problem is therefore a very good indicator of a potential honey pot. And problems are a dime a dozen. But which problems are really “good problems”? Which problems offer great innovation potential?

1. MANY have the problem

One person who has heard something that someone thinks is not enough. That is conjecture.

A good combination of target group and problem is found when a consistent proportion confirms the problem. For example, if 2 out of 10 development engineers surveyed say “the selection of supplier components in CAD integration is really frustrating”. If only very few people say this, then you have either selected the wrong target group. Or the problem is actually more of a specialized topic. In both cases, no relevant innovation potential has yet been identified. So keep looking instead of rushing to develop solutions.

2. Problem GROWS

If the problem dies out tomorrow, then that is rather weak.

This is precisely why trends and megatrends are so popular for innovation development. They promise that the topic has only just begun and that the market potential will grow all by itself in the long term. For example, the “growth of the internet by 2300% annually” is the famous horse that Jeff Bezos bet on in 1994. Not really a “problem” in the case of Amazon and Jeff Bezos, but perhaps an illustrative example nonetheless.

3. It is URGENT

The reason why painkillers are more expensive than vitamins.

Problems that need to be solved urgently have an important time aspect. Either the problem gets worse as time passes. Keyword: burst water pipe. The express problem solution for Sunday night costs a corresponding surcharge. Or you need to avoid contractual penalties, damages or other penalties due to delays. The big challenge is to catch the right moment when the urgent problem arises in the target group. Sometimes these problems are recognizable “from the outside”, e.g. in the case of staff shortages in seasonal business. Because it happens every season. If the urgency comes from a disruption, then it would of course be good if the target group has the provider on their radar and calls directly. Otherwise, it’s difficult for a solution provider.

4. The problem costs MONEY

Slight discomfort in the pit of the stomach is not as direct as fines for non-compliance with emissions regulations.

In B2B, relevant problems generally cost money. They either cost money directly because of waste, rejects and lost sales. Or indirectly, because things are processed more slowly than necessary and money is wasted due to inefficient working hours. Even emotionally problematic situations are reflected in employee turnover, sick leave, demotivation and frustration, which in turn leads to a loss of efficiency. If the problem does not cost money, then either we have not understood it properly or there is no potential for innovation.

5. It MUST be solved

Legislative tightening is a typical example

When laws change, new solutions and innovations emerge to a large extent. Because the new requirements have to be met. In addition to legislation, management expectations of employees can also be seen as “must requirements”. If the new management announces that the market share is to be increased by a further 5 percentage points, this can also be a problem that needs to be solved. Especially perfect if there is a clearly responsible person in the company who has to solve the problem.

6. It hurts OFTEN

The annual accounts only burn once a year. That’s probably not often enough for a ‘big solution’.

Frequently occurring problems either actually occur on a regular basis. Or the use cases for the problem are numerous, as is typical in high-volume production such as in the automotive industry. Firstly, this increases the value of the problem and therefore the potential for innovation overall. Secondly, this increases the chance that the problem will be on the company’s agenda right now, when it has a solution to offer.

7 RELEVANT for top management

If everyone shrugs their shoulders, then the topic will peter out. Commitment, motivation and leadership are irreplaceable for groundbreaking innovation.

Innovation takes strength. Organizational strength and personal strength. Power that is not infinitely available. And the knowledge of the comfort zone tells us that power goes where it is easy. Where endorphins are waiting. Where many pull together and the social group lets everyone pull together. If the company management is not interested in a customer or market problem, then it becomes difficult. Anything that leaves company management cold will have little chance of survival in the long term. Sooner or later, even relevant innovation potential will fall by the wayside. They peter out because resources are invested in other activities and they are gradually forgotten.

Is a customer problem always a relevant innovation potential?

Every successful innovation solves a relevant problem. Whether market pull or technology push.

• Market Pull
  • The problem and the need have been recognized.
  • A suitable solution is developed for the identified target group.
  • The problem and the need have been recognized.
  • A suitable solution is developed for the identified target group.
• Technology Push
  • A solution has been identified and developed.
  • A suitable problem is sought in various markets.

With the market pull approach, the problem is identified first. It is also important for Technology Push to identify the right problems. Just a little later. After the first solution ideas have already been identified. Incidentally, the time machine, a two-day innovation workshop that is already being used successfully in many industries, offers an excellent link between market pull and technology push.

Uncover innovation potential with TOM SPIKE

The first steps with innovation support from TOM SPIKE usually involve finding relevant customer problems in the market. This is the best foundation for the further development of innovations. Together with the client company, we select the markets and target groups to be explored. We then validate the problems and innovation potential through personal discussions with a statistically relevant number of people. We are happy to provide an initial estimate of how long a market survey will take in your case during the first meeting.