In the video below, The Motley Fool speaks with Roger Martin, strategy expert and dean of the Rotman School of Management at the University of Toronto. We discuss Apple and how it conducts consumer research. Martin points out that while Steve Jobs famously said the company doesn't do consumer research, it often hires the best users of its products and gives prototypes to these internal people for evaluation, giving it a built-in advantage in understanding the consumer.
A transcript follows the video.
The full interview with Roger Martin can be seen here, in which we discuss a number of topics including Bill Ackman, innovation, corporate responsibility, executive compensation, and how to pick out great companies. Martin is the coauthor of Playing to Win, a new book focusing on strategy written with former Procter & Gamble CEO A.G. Lafley.
Brendan Byrnes: Let's switch gears a little bit. Let's talk about a case study you wrote that talks about "inventing in the dark." You said invention should be based around what the users want, essentially; what you call "user-driven innovation."
Could you talk about what that means? What would that have meant for a Steve Jobs? When people talk about Steve Jobs invented products -- the iPad, the iPhone -- that people didn't even know they wanted yet, how does that fit into that principle?
Roger Martin: It very much does.
Any company that really wants to innovate, and innovate consistently, has to be close to their customers, has to be watching their customers carefully, understanding what the customers do with their product or service, because it's through understanding that and understanding frustrations they may have, things that they wish they could do, that you'll be able to come up with ideas that could help those consumers out.
But where Jobs is absolutely right, and my friend and coauthor on Playing the Game always says, "Consumer research of any sort never tells you the answer. It's only an aid to your judgment and creativity."
I think if Steve Jobs were with us today, he would probably say that. He's famous for saying, "We don't do consumer research," but he never said, "and I pay no attention whatsoever to what consumers think or want."
But he was wise enough to say, "They won't invent the next cool gadget. They'll just have needs and wants that we've got to get close enough to them to understand."
What's different about Jobs and Apple -- and this was pointed out to me by Tom Hulme, a really clever Ideo designer -- he said the explicit view at the top of Apple was, "We hire employees who are the best users of our product so we don't have to do as much consumer research as other companies, because we give all the prototypes to our internal people. They use them, and they are the great leading indicator for what people on the outside of Apple will want and use."
That had never occurred to me, but I think he's more right than wrong. You can have an advantage in understanding the consumer if the people in your company are prime consumers of the product that you sell.
Brendan Byrnes owns shares of Apple. The Motley Fool recommends Apple and Procter & Gamble. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.