Innovation Evaluation Framework: Use Choice and Control
True innovation requires a more expansive evaluation than a traditional business case and needs to be considered with features and attributes that are more qualitative and driven more by emotion than logic.Seven components contribute to innovation success: choice/control, convenience, community, completeness, compatibility, coolness/communication andcustomer’s cost. These factors, used to evaluate an idea early in the process, can contribute to the success of a new product or service by improving adoption, reducing risk and building trust for the new product or service.
Choice and control factors are derived from the book Follow the Other Hand by Andy Cohen. In his book, Cohen uses magic as a metaphor for thinking about new products and solutions from a new perspective, describing how choice and control are used by magicians to make the audience part of the magic. One of the main characters in the book defines choice as “providing options. The newer and more numerous the options, the more powerful the effect in building the relationship.” Control, on the other hand, is defined as “providing the consumer with the power to influence behavior.” Both factors are important when evaluating a new idea and are tightly linked. New products or services that offer more choice and control create an atmosphere of trust and break down barriers to adoption of the new solution.
Innovation Evaluation Factor: Choice
Most successful new products and services improve choice, by providing more options or by providing insight into the selection process. Choice is often taken for granted in today’s world. Looking back only 100 years, consumers had few choices.Henry Ford became famous for offering the Model-T, a successful product innovation, in only one color and body style, because the consumers had no other choice at the price point. Ford lost the leadership of the automobile market when a new market entrant introduced cars in a range of styles and colors – offering the consumer more choice.
Choice is important because it empowers the consumer. When there are more choices, consumers can compare and contrast solutions and select the one they believe most closely matches to their needs. Over time, any likely requirement or demand will be anticipated and a solution provided – across price points, quality grades and packaging options. After the initial entry in a specific niche (the first innovation) most choice-driven innovation is based on incremental innovation. P&G introduced nationally advertised detergent brands and expanded the brands to offer different solutions at a range of price points. Then, P&G began to offer incremental innovations for the individual brands, such as Tide with Bleach and Tide with Pine Scent.
Eventually, of course, all the niches are filled and incremental innovation runs its course. Then, innovation takes on a different flavor. There are at least two distinct possibilities: an innovation that completely disrupts the existing order or that simplifies the decisions around choice. There have been increasingly small innovations with washing machines and detergents. The detergent industry will be disrupted by new, high tech fabrics that do not stain or by new cleaning techniques that do not require detergent. Or, a new service innovation will arise to simplify the choice paradox – which detergent is right for a family? As the number of choices expands, service innovators create solutions to help consumers make the best choice for them, given the breadth of offerings. Beyond convenience, one of the values that Amazon and other online retailers provide is simplifying choice through identifying best selling products, providing customer reviews and recommending products based on other products purchased. Kayak is a travel website that helps a consumer choose travel across a wide array of offerings from a large number of vendors. Kayak provides a breadth of information and simplifies decision making for the consumer.
For an innovation to succeed, it must provide the consumer more choice than what is currently available without a loss of control or sacrifice of benefits, or it must simplify the method of choosing across a wide range of offerings. Choice is important to the consumer. Markets continue to fragment based on demand for products and services tailored to specific needs. Improving the process of making a choice through recommendations is also an innovation.
Innovation Evaluation Factor: Control
In addition to more choice, successful innovations provide more control for the consumer. Traditionally, choice and control were trade-offs. If a consumer had choice, by making a choice she gave up control once she made a decision. On the other hand, if a consumer had control, usually he had no choice. Control becomes important in any new product or service innovation because we increasingly believe that we ought to have more control over our lives, even as our day to day experience becomes more hectic. Any new product or service that offers a consumer more control over their lives, without causing the consumer to sacrifice convenience or choice, will be in high demand.
Control has also become more important to modern consumers as they are less willing to accept standardized products and demand products and services tailored to their desires and lifestyle. Recognizing that vendors will create new products and services based on market segment or individual demands, consumers have much more control over the products and services they use and acquire. They expect those products, however, to provide more choice and control in their lives, not to limit their options.
The increase in control can be seen in new product introductions in areas like tailored jeans. Through innovations in three-dimensional body scanning, people can have jeans and other apparel tailored to their specific dimensions rather than purchase clothing off the rack. This control creates a stronger customer relationship. Another example of control in a service innovation is Priceline.com, where the consumer can dictate prices for airline travel, rental cars and hotels. Priceline and other offerings provide the consumer more control over their costs, without sacrificing choice. Priceline is interesting in that it allows a customer to control pricing by dictating a price for a car or hotel room, yet maintains choice by showing the consumer the name of the rental company or hotel. Priceline still offers its original service, offering even lower fares if the client is willing to forego some choice for even greater control of the price.
Evaluating a New Idea with Choice and Control
Beyond traditional evaluation metrics like revenue generated or costs to develop, an evaluation team should consider choice and control as part of its evaluation of a new idea.
- Does the idea and its capabilities offer more choice than the existing products or substitutes?
- Can the idea help simplify the process of making a choice for a consumer?
- Does the idea offer the consumer more control without sacrificing convenience or choice?
If the answer to these questions is “no,” then the idea may need to be reworked – or else it must be compelling in the other evaluation facets.
Evaluating a new product or service based on the choice it offers and control it provides helps improve the success of a new idea. These factors reduce the risk of adopting the innovation by offering more choice or simplifying choice, and by offering greater control over the solution. By reducing adoption risk, these factors reduce the fear of change and encourage sampling or trials, which might not take place otherwise. These factors also may reduce the learning curve and the effort to change from an existing solution to a new solution, increasing the likelihood a new product or service will be tested and accepted. Increased choice and control offer immediate, tangible benefits to a consumer and are not completely captured in a traditional business plan or financial plan.
Jeffrey Phillips is a vice president with OVO and responsible for marketing and for leading innovation projects with OVO’s clients. Mr. Phillips has extensive experience working in the innovation space, with a wide range of Fortune 500 firms. He has published articles for Harvard Management Update, DigitAll Magazine, Pure Insight and blogs about innovation at Innovate on Purpose. Contact Jeffrey Phillips at jphillips (at) ovoinnovation.com.