Smart product managers study trends and innovate accordingly. This is trend-driven innovation. Uber’s success is an excellent example of trend-driven innovation. It made transportation more convenient and also made earning money easier for drivers. Both were possible due to changes in perceptions of sharing – a trend that became known as the sharing economy.
Trends can be a product manager’s best friend. They can propel products, increasing adoption by customers, or if misread, they may have costly consequences of wasted resources, too much inventory, and lost opportunities.
Product managers know about the importance of trends, but are often already overwhelmed and don’t make time to study trends. Are there ways to make trend identification easier? To find out and learn about identifying and using trends, I contacted Max Luthy.
He is the Director of Trends Insights at TrendWatching, a company that scans the globe identifying emerging consumer trends and changes in trends. He is also the co-author of the book Trend-Driven Innovation.
In the interview, we discuss the steps to apply trend-driven innovation…
- Scan,
- Focus,
- Generate,
- Execute, and
- Culture.
A summary of the discussion is below followed by a link to the audio interview.
How do trends impact innovation?
We all know things are constantly changing. As a result, what your customer expects from your products, from your services, from your marketing, from your customer service, from your logistics, from your supply chain — all of the expectations around your brand and your product — are changing constantly. Tracking trends is really about seeing these changes happen and evolving your strategy to stay ahead of them.
How does watching businesses help us learn about consumer trends?
This is a counter intuitive secret. It would be very easy to think to understand the consumer, the best thing you can do is ask them. Instead, the reason we’re looking to businesses to better understand customers is because it is the innovations from businesses across industries and around the world that create new expectations and lead to the emergence of new trends. It is a less expensive and more effective means of identifying consumer trends.
What is the process for spotting trends?
I’ll go through each, but the steps are Scan, Focus, Generate, Execute, and Culture.
Scan.
Absorbing information through readily available sources such as newsletters. One recommendation is the Quartz Daily brief. Trends should be tracked in a logical manner and tools like Evernote can make this easy.
Focus.
This means to focus on what’s relevant for you. Assess the trends you spotted when scanning and determine how is it relevant for your company in terms of the maturity of the trend, the locality you’re in, and your industry.
Generate.
You need to come up with new products, new services, new marketing, that tap into the emerging insights at the heart of the trend. If you’re just tracking the trends and you’re not acting on the insights, it’s a complete waste of time.
Execute.
This involves all the actions to get new products and services to the market. It is the culmination of your work acting on a trend and identifying a product or service to capitalize on your observations.
What do you mean by Culture?
This is the bonus stage of trend-driven innovation. It means to keep doing these four steps to create innovative products and services, you have to build a culture that understands that change is happening, the rate of change is accelerating, and the need for everyone in the company to be watching out for change, looking out for emerging expectations, and responding within their own work.