The need for today’s businesses and manufacturers to develop innovative solutions has never been more apparent. The product lifespan — from introduction to the market to its inevitable sunsetting as a result of newer innovations — is getting shorter. It’s also why we’re seeing more companies actively working to conceive, test and build their next great idea. The problem is, they’re doing it wrong.

Innovation is hard, yet businesses continue to lean into old models in hopes of developing something entirely new and innovative. One of those models — the proof of concept — has a difficult time proving its value, especially when today’s innovation requires the integration of complex technologies like artificial intelligence (AI) and the internet of things (IoT). 

For many business leaders, proof of concept is both a known entity and a default mindset for product development. So when it comes to IoT and cloud connectivity, there isn’t clarity on how data gets factored into a proof of concept. In fact, a proof of concept may not be feasible because the product’s feasibility is actually embedded in the data, which goes far beyond the design of a prototype. Design a connected product without clean, repeatable data and you’ve just wasted time and money on a proof of concept that fails to deliver at scale.

This explains why companies are slow to implement IoT solutions. Businesses are getting stuck in building proof of concept models without clearly understanding the pain points of their stakeholders. They begin with the mentality of creating a prototype or a widget over-delivering tangible value to the customer.

A Better Process For IoT Innovation

Through our work with clients and partners, we have shown that a proven process known as human-centered design (HCD) can reduce risk, eliminate friction and reel in expenses to achieve digital transformation success. While the process isn’t new, it hasn’t been widely adopted by those who subscribe to the principles of lean manufacturing, which often are the same businesses that subscribe to the proof of concept.

Data: Today’s Innovation Driver

Recently, we worked with an industrial manufacturing company that provides belt conveyor productivity solutions for its customers around the world. Part of what they do is manufacture cleaning blades that scrape conveyor belts clean. So, why would it need to develop an IoT solution? And why would it need an HCD process to build a better scraping blade?

The difference is a shift from iterative-outcome thinking to discovery rooted in process-driven thinking. 

Through HCD, this manufacturer discovered the pain point for its customers in the mining industry: unplanned downtime. When blades and belts aren’t performing correctly, conveyor lines have to be shut down. Many of these conveyors reside in harsh environments (think 100-degree weather in Western Australia or a mine located a mile underground), which are not easily or quickly addressed by personnel. An IoT solution, with AI sensors monitoring belt and blade health, gives instant access to real-time data via the cloud and connected devices that help avoid costly disruptions.

Developing an IoT solution with AI sensors doesn’t make for a better blade. Rather, it provides digital user experiences to various key stakeholders. These experiences open the door to increased uptime, improved safety and maintenance efficiency gains — all of which are equally important to the business.

A proof of concept approach would’ve relied heavily on what the company knows and already produces. Had they pursued a better blade, they would’ve attempted to solve the wrong problem for their clients.

That’s what HCD does — it reveals opportunities through a four-step process of discover, analyze, create and develop — with outcomes customized to every organization. Pursuing HCD is less about design and deeply rooted in basic business fundamentals:

• A Forrester study revealed companies applying HCD (design thinking) get products to market faster and for less money.

• Brands recognized as “innovators” — Google, Apple and Nike, among others — all apply HCD to improve their businesses and cultures.

• The Design Value Index shows companies that infuse HCD into their business model annually outperform the S&P Index and outpace industry peers by as much as 228%.

A New Mindset — And Business Structure — Is Needed

If companies want to digitally transform, gain a competitive edge and grow, a new leadership mindset is required. That mindset must then lead to action. Leaders must grapple with the fact that innovation is hard, and its fruits are short-lived because of rapid change. A proven process that leads to innovation can and must be repeatable.

Companies poised to thrive in the innovation economy will structure themselves differently. Specifically, they will:

• Adopt HCD for innovation excellence in the same way they adopted lean manufacturing to focus solely on operational excellence

• Embrace a team approach that expands horizontally to include stakeholders from design, engineering, technology, sales and traditional C-suite roles

• Fund the discovery and development of what’s next through HCD rather than a proof of concept. In doing so, they will be investing in a proven process to realize the company’s strategy and desired results

The ideas and implementation necessary to achieve digital transformation aren’t emerging from old models and old thinking. Reliable, actionable data can be hard to access and even harder to interpret, which requires new processes, new thinking and new partnerships.

HCD is not a silver bullet or a quick fix. Adopting it requires flexing a diverse set of muscles, including empathy, immersion, listening to understand, creativity and imagination. Companies will hit roadblocks on this new journey, but those committed to the HCD process will realize their return on investment. They will create something new of value while learning a proven and repeatable process that transforms how they approach creating ongoing and lasting value.

IoT is here to stay. Data is the new currency we’re trading in. When digital strategies become part of the larger business strategy, connections to the things that matter — the cloud, key stakeholders, innovative solutions and bottom-line growth — are all within reach with the right process.