By Dorian Simpson

In recent decades, those who led the charge to “Innovate or die!” have deluged the universe with a wide range of innovation concepts to consider such as radical, disruptive, incremental, experience and more. Some of these innovation concepts focus on enhancing current products and services while others focus on creating game-changing technologies, products or business models.

Product companies have responded with a dizzy array of new product innovations; however, many companies wonder why they are still dying. The root cause to these innovation mishaps is that (through all the innovation jargon) they have forgotten the fact that innovation, whether radical or incremental, cannot be just about new features, products or technology. All innovation efforts must be directed toward products and solutions that customers desire.

What Is Lovable Innovation?
“Lovable” innovation may seem like a flippant term for a business process as important as innovation, but companies must think about product innovation in the same way that customers think and talk about their products. Customers do not say, “Have you seen the new iPhone? It has an accelerometer sensor for auto-rotate!” Instead, they say, “I love my new iPhone. Look at how I can turn it in any direction and still watch a video. It is amazing!”

When a product or service is so good that it creates real emotion, customers often describe this relationship in emotive terms with the ultimate descriptor: love. I even catch myself using the word love when describing the products that have earned my devotion. I have loved cars, printers, clothes and calculators (yes, I did love my HP-11C) and there is no question that I have ultimately disliked many other products that have managed to destroy their relationship with me.

Lovable innovation is the process of learning what customers value and then using all the resources available to deliver complete and lovable products, services and experiences throughout the entire life cycle of the customer. This starts with a commitment to thoroughly understanding your customers – their problems, needs and desires – not compromising until you have delivered the products and services that earn their love and respect.

Lovable innovation does not end with the first purchase. It continues with every interaction with the company to the next purchase and the next purchase. Lovable innovation leads to loyal, passionate customers who are inspired to tell friends about your products and your company, such as:

Lexus’ achievements with its cars.
Apple’s success with personal electronics.
Nike’s connections through its shoes.

While radical, incremental and other forms of innovation are important tools in product development, all innovation efforts must be driven by lovable innovation practices and directed toward the goal of lovable products and services.

For example, smartphone companies knew the Web offered unlimited customer benefits and included Web services on their devices for years. Apple decided to focus on making Web services a “lovable” experience when they relentlessly applied innovation to deliver this experience. That was when Web services became the killer applications that thrust the iPhone to the forefront of the industry and allowed Apple to capture a whole new set of customers that extol their love for the company.

The Components of Lovable Products
The core of a lovable innovation process is the ability to gain a deep understanding of what customers care about and value by breaking it into manageable components. These lovable product components are referred to as “love elements.”

Love elements include the complete range of product and service attributes that drive customer purchase decisions, long term product satisfaction and company devotion. Love elements are in the product features, functions and benefits; however, they go beyond the basics. They could show up in the attitudes of customer service agents, in the way the product manual is written, in the way the buttons feel and in every other customer touch point within the product and the company.

Apple creates love throughout the entire i-experience starting with clean retail stores, clean industrial designs, thoughtful functionality and integrated services such as the iPhone App Store. Netflix creates love by allowing customers to keep a DVD forever without penalty and unlimited movies streamed directly to their TVs. Nike creates love even after a customer retires their shoes by allowing customers to send them back to be recycled in children’s playgrounds as Nike Grind.

Looking for Love
The challenge for companies that desire to implement lovable innovation practices is that love elements for a given product or service may be different for each customer. It is up to companies to identify, aggregate and quantify these love elements and then make tough decisions about which elements to focus on to deliver lovable products to target customers. Customers are the only people who can tell companies if they have received the love elements. It only makes sense, therefore, to discover these love elements from customers before products are developed and delivered.

Many companies, unfortunately, have not yet figured out how to consistently work with customers to discover and then deliver their love elements that make their products stand out in the marketplace. Several companies such as Motorola, Kodak, Xerox and Schwinn have been publicly chided for their inability to focus innovation efforts on products customers love. Many others are playing catch up and only time will determine their fate. Blackberry is responding to the iPhone. Blockbuster is way behind Netflix in electronic delivery of movies (and behind Redbox in kiosk DVD delivery). And MySpace is struggling to regain leadership in online communities.

All of these companies have a lot of work to do in order to deliver new products and services that regain the admiration of customers. One segment that has an immediate need to retool their innovation efforts is the American auto industry. While all three U.S. automakers have struggled, one automaker has had a spotlight shined on its innovation challenges.

General Motors
General Motors’ (GM) woes provide a good case study on the innovation trials facing many companies. GM largely ignored the quality movement in the 1970s, opening the door for Japan and others, but they also made a wide range of product decisions that failed to earn customer adoration: the uninspiring “new” Chevy Malibu, the spurious Cadillac Cimarron, the poorly executed Pontiac Aztek, etc.

Throughout its history, even during profitable periods, GM has struggled to deliver lovable products in their attempt to balance engineering, design, quality and operational needs. In the 1960s and 1970s, a GM design executive, Bill Mitchell (also the author’s wife’s late grandfather) put his heart and passion into the revolutionary Corvette Stingray, the 1963 Buick Riviera and scores of other Cadillacs, Chevys and Buicks. Mitchell’s daughter, Lynne, tells intriguing stories of his struggles with GM engineering and other executives to design cars that would create passion and desire with customers. He won some of those battles, but lost many others. His successors have had similar luck that has led GM through a long string of mostly unremarkable cars, many of which still pervade their lineup.

Is GM Innovative?
General Motors has invested consistently in both radical and incremental innovation, but they did not focus on the “love” elements that customers desired most. General Motors invented the OnStar system, which is clever, but low on the list of what customers want. GM was proud to have invented the Northstar engine series for the Cadillac. What is it? Who cares? General Motors was also ahead of the curve with the first electric vehicle (EV) that did create enough passion in customers to inspire not only a full-length documentary, but conspiracy theories on why it was killed. The company abandoned the EV with short-sighted financial ramifications. Customers are left waiting to see the results from GM’s latest effort with plug-in electric cars as well as its massive investment in hydrogen cars.

Even GM’s tremendous quality improvement efforts have not enabled it to deliver lovable products as these efforts focused on low product defects. A low defect rate may have been a significant love element in 1983, but in 2009 this does not count as a love element because customers expect defect-free products. Time, technology and competition are always raising the bar on the love elements that win the affection of customers.

A Family Car Purchasing Experience
My growing family decided to buy a sports utility vehicle in 2006. My wife and I discussed the major love elements we required in a product we would love:

Thoughtful roominess
Ample seating
Great performance
Extreme safety
Whisper quiet

We also had more love elements that were less obvious and unstated. She needed unfettered access to add and remove children. I wanted to look cool. She needed a way to perfectly nestle her venti latte and I wanted the stereo to be velvet to my ears. In short, we wanted our new car company to understand us completely and to deliver a product we would love. At a price we could justify.

We started our search and test drove them all, American and foreign alike. The inquisition was fierce:

“Why is this piece plastic?”
“Did that one seem louder?”
“Why did they put that there?”

We had dozens of factors to weigh: good, bad and neutral. We tried to focus on what we considered the most important love elements, however, even the small love elements we did not think about at first such as interior details and the sound of doors closing affected us. After weighing all of these love elements, it was a foreign-made vehicle that stole our love away from the American choices.

The Good News
The good news is that many companies do practice lovable innovation at their cores and consistently deliver worthy and lovable products. The Apple argument starts and ends with two words: iPod and iPhone. There were six other major MP3 competitors on the market before Apple got the love elements right. Amazon has been a dot-com survivor by continuing to build on its lovable online book service (and every other product service now). Many companies such as Procter & Gamble (P&G), Google, Hallmark, LEGO and others have fully integrated lovable innovation practices into their processes and are rewarded with great products, valuable brands, loyal customers and growing profits.

The Bad News
The bad news, particularly for U.S. and European market leaders, is that emerging foreign competitors in Asia and Eastern Europe are quickly applying these lovable innovation lessons. Just like Japan in the 1960s, China is starting with a blank piece of paper and is willing to learn how to deliver truly remarkable products. For example, U.S. car companies lost hybrid car dominance to the Toyota Prius because Toyota got the love elements right first. Do not be surprised if a Chinese company wins your first electric vehicle purchase along with your heart.

The Five Essential Philosophies of Lovable Innovation
How can companies apply lovable innovation principles to consistently capture the hearts of customers? They must build the skills to uncover, validate and make tough decisions on customer love elements as the core of a lovable innovation process. Discovering and quantifying love elements is not obvious since customers cannot always articulate what they will love.

There are five essential philosophies to building lovable innovation practices that lead to lovable products and customer devotion:

1. Marry your customers.
Commit to customers. A marketing professional challenges his clients to “marry” their customers – commit to be with customers through thick and thin. Pledge to listen to them, learn their needs and desires and find solutions to their problems. This requires earning their trust so that they will be more open to sharing challenges and revealing the love elements that will win their hearts. Learning more quickly about big problems can give a business the edge on discovering major opportunities that requires radical innovation, but also provides insight into smaller love elements that can lead to valuable incremental innovation opportunities.

Many companies say something similar to, “We do not have access to our customers!” Sometimes it takes time, new thinking and creativity to gain direct access to both current and potential customers to gain this insight. Smart companies create customer insight systems that open channels of feedback through customer panels, online tools and customer visits. Quicken finance software is famous for beating the mighty Microsoft by following customers home to watch them install and use its accounting software to gain insight.

2. Become a “love” psychologist.
Learn how to listen. Companies may also complain that “Customers cannot tell us what they want!” Once a business has its customer’s ear, listening is not enough. It takes unique skills to gain customer insight and determine if the right love elements have been uncovered. Successfully exploring the minds of customers requires repeatable techniques such as in-depth customer interviews, observations or other appropriate research methods. These activities should not always be outsourced to market research agencies because obtaining on-going, high quality insight requires that a company build a direct relationship with its customers.

As an exercise, find a customer, sit down with her for an hour and listen versus talk to the customer. As a trusting relationship is established, the company will be able to move beyond the customer’s surface, obvious needs. Companies may need to learn new methods to gain such insights, but with practice and dedication it is possible to get inside customers’ heads. (These techniques are generally referred to as voice of the customer (VOC) and are used by top innovators such as P&G and Toyota to define lovable innovations.)

The resources of a Fortune 100 company are not necessary to conduct good customer discussions. One small health consultant in Oregon uses surveys to track customer desires and then follows up with those customers who want to talk about their products. This consistent feedback allows her to focus on new services that her customers want instead of what she, as an expert in her field, thinks they want. The answers are often surprisingly different. The result? A thriving business because she is always on top of the latest products that her customers care about.

3. Make tough love decisions.
Make tough decisions that are guided by what customers care about. Once a company has uncovered love elements that will win the hearts of its customers, it is time to make difficult tradeoffs. Lovable innovation decisions range from big strategic decisions such as “Should we develop a plug-in car at all?” to detailed feature decisions such as “How long should the cord be to plug it in?” Without having the tools and methods to rank, prioritize and quantify your elements, it is easy to want to solve every need and meet every want. But a company cannot do so.

Successful products have a clear emphasis on the most important love elements that only a company and its customers can decide. Develop clear methods that focus innovation efforts on customers’ top love elements, such as trade-off analysis and other quantitative research tools to make tough decisions. Nintendo was forced to make difficult trade-off decisions among performance, design and applications when it chose to focus on a new video game experience targeted toward families. In the process Nintendo had to abdicate the hard-core gamer market to Sony and Microsoft. The decisions paid off with the Wii’s success.

4. Go deep with commitment.
Get the details right. Once a business has made tough decisions to focus on the top love elements, it is time to get the whole product right. Think about products that are loved – they all deliver a small set of love elements well, as Apple did by enabling Web services on the iPhone and making the experience lovable for customers. This commitment to the details allows a company to focus on making the experience of these critical product or service attributes better and more lovable. For example, the iPod delivers the top love elements and has gone deeper to get the details right on the overall music experience: from opening the box, to the feel of the device and to downloading music with ease. Netflix has gone deep into creating an online movie ordering system complete with a range of recommendation tools and simple mailing procedures. Love element details do not stop at the product, but may also include better customer service, useful accessories and set-up improvements. Lost a part to your LEGO Power Miners set? For a nominal fee, LEGO will send you just the missing part thus avoiding your next toddler tantrum. The love is in the details.

5. Upset your development team.
Follow through on commitment. If a business has successfully married its customers and knows what they will love and buy, the company may think it does not have the resources, skills and commitment to meet those needs. Do not let these challenges limit actions. If it is important to customers (including potential customers), take a stand and challenge development teams to find solutions.

Instead of hearing “We cannot do that,” find creative ways to answer, “How can we do that?” such as discovering external experts, purchasing technology or refocusing resources from less important projects. Solving tough problems leads to radical innovation and big leaps in market advantage. Development teams thrive on tough problems and savor the recognition for solving them. A common refrain from Apple employees is, “It is the toughest job I have ever loved.” That cool touch screen with expanding Web pages on the Apple iPhone did not come without engineering angst.

What are the results of adhering to these five essential philosophies? The ability to direct all innovation efforts, incremental, radical and otherwise toward products customers will love.

The Bottom Line
Lovable innovation requires a place as a standard business process in any company that wants the long term benefit of loyal customers and great brands. Companies must focus their innovation efforts on products and services that customers want and then deliver the goods to earn their love. Global competition is tougher all the time and if a business cannot deliver lovable products, its competition certainly will.

About the Author:
Dorian Simpson is managing director of the Planning Innovations Group, a leading product innovation training and consulting group. He can be reached at dsimpson@planninginnovations.com or through his website at http://www.planninginnovations.com/. Contact Dorian Simpson at dsimpson (at) planninginnovations.com or visit http://www.planninginnovations.com.