How should companies’ innovate?

I read an interesting post by Scott Anthony on the Harvard Business Publishing site today called “Better through whose eyes?”

He makes the point that innovation needs to be seen through the customers lens. I couldn’t agree more, in fact if it isn’t adding value to the customer then in my view it is not innovation to begin with….

The second criteria should be whether the business can do it cost effectively, as an innvoation should add customer value but also add profitablity to the company.

Scott provided the example of the new feature on Bank of Amercia ATMs that allows customers to scan checks, he proposed the idea that it was really just saving BoA money and inconveniencing customers but it was interesting to see that the comments were fairly evenly split on this one with many actually believing it saved them time and was easy to use. So one could conclude that it was innovative for some customers but not others?

This leads to the question of segmentation and how to introduce new benefits that only some customers will value. Perhaps BoA could have provided the old method of banking checks as well as the new scanning method, watched customer behavior and phased out the older method over time?