It is interesting how R&D managers have to navigate the complex world of management advice – I guess thats what makes it interesting. The article Avoid The Commoditization Trap from Forbes recommends customer driven R&D:

To do that, gather together the best minds in your business, including representatives of all the company’s critical functions, and ask them the following question: ‘Knowing what we all know, if you were our customers, how would you go about deciding whether to purchase our products or services?’ Your cross-functional and top-performing team should then make a list of all of the questions that arise about the problems to be solved for your customers and the questions those customers should be asking a potential solution provider. If those questions are positioned correctly, you’ll be able to expand your customers’ awareness of how you can address their needs, increase your credibility and ultimately set yourself further apart from your competition.

This is actually the opposite of the University of Illinois study recommending focus on technology instead of customers to drive innovation.  However both view points have value at probably different times in the R&D life-cycle.  In fact, managers need to balance investment between both approaches.

Clearly Intel believes in this approach – they have hired their on social scientists to design new computing solutions that could use their chips! The article has one good suggestion about deciding on customer impact that is quite useful in a B2B situation:

First, fully examine the impact your solution can have on a customer’s situation and how it can benefit them long-term. The only true measure of value is how your solution changes your customer’s net profit. Instruct your team in how to clearly and effectively relay such information, helping customers see your value from their own point of view–not in terms of industry averages, past experiences with other customers or generalizations, but in ways that will make them want to defend the validity of your solution to their own colleagues. That’s when you’ll know you’ve succeeded.

 Off to the races…