3M has a culture of continuous design innovation and creativity. This culture forced the Medical-Surgical Markets Division (MSMD) to alter the way they performed marketing research when its division was faced with a 10 year period of stagnating market growth. Much can be learned from this pilot program, which is why the team’s background, comparison of methods, concerns, results and final review of the process is combined in this memo.The Lead User Research (LUR) Method differs from the old development process by focusing on qualitative interactions with users who tend to innovate on their own.
The research attempts to develop new products by identifying user needs before the users can identify the need themselves. Traditional research focuses largely on quantifiable data. Focus groups, data on existing products, non-proprietary data readily available to competitors, etc. This type of research is typically performed by marketing researchers.Some members of 3M Management have had difficulty accepting this new method for several reasons. First, the LUR process requires a large number of resources up front. Second, the process does not follow the logical, quantifiable process traditionally used in the research process. Finally, the process did not promise any definitive outcomes.
..there was a fair amount of ambiguity inherent to the qualitative approach.
Quantitative data can be definitively analyzed, while qualitative data can yield more questions to be answered.A new process like this will always spark some controversy and debate; however, the new process should ultimately be welcomed. Traditional methods have not yielded the desired results. While there is no guarantee the lead user research method will yield desired results, the approach is an attractive alternative that provides fresh, unique insight into the market segments 3M is trying to grow in the MSMD. If successful, the method will provide 3M with a distinct research advantage over competitors, and can yield revolutionary new products and services to revitalize the MSMD, and open the door for significant new revenue streams.Some of the benefits that resulted in MSMD’s application of the Lead user research program were the large amount of market information gathered from the unique group of assembled experts, two new incremental product ideas that are already highlighted for specific markets, one new breakthrough product that will open the door to a two billion dollar untapped market, and a brand new business unit which can expand 3M as a whole. All in all, the LUR process resulted in product ideas that can be immediately actionable vs. ideas waiting for markets.
One of the major concerns with this pilot program was the amount of resources required. The MSMD group used more individuals than recommended as well as a greater amount of time. In the future, a stricter adherence to the LUR guidelines could help structure the program and increase cost affectivity. Another concern with the pilot program was the seeming lack of management support. If any change is going to be effective it should be driven from the top down, not the bottom up.Overall, application of the process along with the current marketing strategy and the corporate culture of creativity, innovation, and adaptability should combine to continue to make 3M an even stronger company than it is today.
BackgroundIn the last 10 years, the Medical-Surgical Markets Division (MSMD) has developed only one successful new product. Though yearly business unit sales have exceeded $100 million, the sales growth in the domestic market is stagnating. International markets do not present a promising avenue for growth of the current product lines, since 3M products are cost-prohibitive overseas.
While revenues for health care goods have outperformed total revenues for the company in the past 5 years, the sales performance indicated a flat innovation trend; no new sales were being generated through research. Senior Management within the business unit found the state of MSMD unacceptable for the long-term growth strategy of the business. As a result, the leadership team became very focused on developing breakthrough products, and challenged the Product Research Team to develop a new breakthrough product within the existing MSMD business strategy. Ideally, the new product(s) will help establish a growth trend in both foreign and domestic markets, and create avenues for sustainable growth in the business unit.Research MethodologyIn order to develop a true breakthrough new product, the current research methodology, or “traditional” method was reviewed and then compared to a new method, termed “Lead User Research.”Traditional Method:Traditional product development within the MSMD has centered largely on quantifiable data. In order to obtain this data, several tools were employed:* Data from sales representatives* Data from focus groups* Customer evaluations of current products* Data on risk factors for diseases* Site visits by scientists and technologistsIndependent market researchers were often utilized, with the exception of the site visits.
Proprietary market data, therefore, was difficult to obtain. Additionally, communication with customers often did not project market needs very well. As a result, it was difficult to gain an edge in product development over competitors.Once the market research was obtained, the traditional method typically enlisted the services of the equivalent of one full-time product developer to carry the product from conception to market.
New products were commonly derivatives of current products, resulting in a situation termed “incremental innovation.” Frequently developers or marketers would think of an incremental product without having an identified market, so the idea would stall and the initial development effort would be lost.Lead User Research Method:Lead user research focuses on qualitative interactions with users who tend to innovate on their own. Researchers will tap into the experiences and innovations of users who experience needs ahead of their peers in a given market and similar markets. Researchers can then take these ideas and create products to meet the needs of the rest of the market years later.
The method relies heavily on a highly talented, cross-functional core team. This team is responsible for planning the project, identifying market needs, and driving the concept generation phases. The team engages in a high level of interaction with the carefully selected “lead users” to satisfy these responsibilities.
This approach generates a very unique insight into the market and provided MDMS a projection for future market needs. By staying ahead of the market, a company can be virtually assured it will be staying ahead of its competitors, as the competitor will still be relying largely on public literature used in traditional research methods.Ultimately, the Lead User Research (LUR) stresses proactive, qualitative probing with the right questions to “experts” over the traditional focus on data collection and quantifiable responses.Concerns about LURIt is understood the drastic differences between the Lead User Research method and the traditional method discussed above raises managerial concerns. For one, the Lead User process requires a larger amount of personnel resources up front – four to six people to comprise a core research team, versus one product developer working with traditional market research data.Second, the process does not follow the logical, quantifiable process traditionally used in 3M research.
This can be a very uncomfortable premise for a company built largely around technically-minded individuals.A third concern is that the process did not promise any definitive outcomes. There is a fair amount of ambiguity inherent to the qualitative approach. Where quantitative data can be definitively analyzed, qualitative data can repeatedly result in more questions to be answered.These concerns are understandable, for new approaches to old problems will always spark some controversy and debate. This is partly what drives 3M’s innovative nature as a company. The Product Research Team feels strongly, however, that this new process should be welcomed.
Traditional methods in MSMD did not produce the desired results. The LUR method provided an attractive alternative that yielded fresh, unique insight into the market segments 3M is currently trying to grow. This method should provide 3M with a distinct research advantage over competitors.This being said, it is also important to note that LUR is not intended to be a replacement for traditional methods. Rather, it provides an alternative approach that results in different information, collected from different sources. The two methods may often complement one another.
Product RecommendationsThrough the use of LUR, the product research team was able to develop three new products recommendations. These products and how each developed out of the LUR are described below.Economy Line: A series of surgical drapes manufactured using low-cost materials. The products would utilize a one-size-fits-all strategy, thereby minimizing segmentation, and maximizing cost effectiveness. The line would be based on existing 3M technologies, and would be aligned with the successful incremental approach we’ve practiced in recent years. This recommendation was a result of the fact-finding trips to financially limited developing countries.”Skin Doctor” Line: A series of hand-held devices to be used for antimicrobial protection. The devices would be based on existing 3M technology, and hence would also be an incremental product.
Initially, these devices would be used to apply substances to the skin to provide protection. This recommendation was a result of the Lead User workshop.”Armor” Line: This line of products would use existing products to protect catheters and tubes from microbes. This may well be the “breakthrough” product MSMD is looking for, since it is consistent with our current business strategy, but represents an avenue for the business to enter a new $2 billion dollar market.These recommendations represent the results of the product development team’s concept generation within the current business strategy. These products alone are great examples of the effectiveness of the LUR method.
However, there was one additional “secondary” recommendation proposed by the final concept generation team.Upstream Containment: With this recommendation, 3M would look to take a more proactive approach to infection control. Here, an element of contaminant detection would combine with the current microbial defense technologies. A high level of customization is anticipated. Pertinent application of anti-microbial defenses would be determined on an individual basis, depending on an individual’s risk level. Additionally, generating the capability to detect specific contaminants throughout a facility is desired.
This fourth recommendation represents an evolution in the field of infection prevention. The technology will require additional resources both inside and outside the 3M technical community. This recommendation also deviates substantially from our current business strategy. As such, the Product Research Team’s recommendation is not to pursue this option at this time, but rather to consider the formation of a new LUR core team with the appropriate cross-functional representatives to initiate the concept generation.