Should innovation be based on internal capabilities, especially technical capabilities, or should it be based on market or customer demand? The question is not so simple in B2B/B2G high-tech.
Starting from its internal capabilities, it can innovate by making the most of its technical investments, hope to be preferred by customers more often, obtain better prices and margins, and even disrupt the market to its advantage. Responding to customer and market demand, or even co-innovating with customers, means having a better chance of the product meeting demand.
B2C versus B2B / B2G markets
One of the major differences with the B2C consumer is that the B2B/B2G customer is often, with some exceptions (e.g. the DGA in France), even less able than the consumer to specify with an adequate level of detail (between too much and too little) the detailed technical characteristics of the product he would expect.
For the customer, the technical expert is the supplier and he therefore expects the supplier to make innovative proposals. Contrary to what happens in general in the consumer markets (even if exceptions exist), it is not enough to listen to the market in technology. Of course, all scenarios are possible and pure market-pull is not uncommon in technology, but the B2B/B2G company is in a way condemned to techno-push.
On the other hand, it is also condemned to market-pull because not all innovative ideas come from the supplier, some market/customer demands are clearly identifiable and/or clearly formulated by customers. Ignoring them, particularly in the area of services, inevitably means losing customers who will turn to suppliers who have listened to them and understood them better.
Too much techno-push will lead to a self-centred vision of innovation, to innovations that are too exclusively focused on the technical side, to over-specification, to products that have no market, are too expensive or both, and will lead to too much neglect of time to market. Conversely, too much market-pull will sterilise the creativity and innovation that could come from within, lead to changing demands that are exhausting for the technical teams, and may lead to focusing on a single client or a single project to the detriment of the overall market.
In both cases, as in those where dialogue is not organised, conflicts between technical teams and sales and marketing teams will never be far away.
Balancing techno push and market pull
How then can techno-push and market-pull be balanced effectively? The main challenge is to achieve a techno-push guided by the market-pull. The starting point can be an internal innovation idea or a demand formulated by customers or the market, but this starting point will immediately be confronted with the other perspective. This will make it possible to validate that the innovations envisaged do indeed have a market, that their price level will be acceptable to customers, that they will arrive with sufficient “time to market” and at the same time to transform all the feedback from customers into filtered, validated and acceptable ideas for innovation.
One of the main capabilities that enable the B2B/B2G high-tech company to innovate is the ability to understand and anticipate customer/market needs better than the customers themselves. To take a well-known analogy, it is about being able to invent the iPhone when no one is asking for it, because you have understood a demand before the market is even able to formulate it.
This ability to “innovate right” is fundamental. It is based externally on close proximity to customers and their operating methods, on constant listening and dialogue and internally on close cooperation between the technical sphere and the marketing, sales and business development spheres.
