It is good to ask customers questions but it is better to observe them in action.

Many companies conduct conventional customer surveys and focus groups. These are useful channels of feedback but in terms of original ideas they are often disappointing. Customers are good at demanding incremental improvements in products, lower prices and better service but they are notoriously poor at predicting significant new products or innovations to meet their needs. Before the fax machine was invented who would have predicted he needed it? Which wearer of spectacles in the 1950s would have said that he wanted a lens to put on his eyeball or laser surgery to reshape his eye? You can expect customers to tell you that they want more of what you offer and they want it better, faster and cheaper. But do not count on them to tell you about different ways to meet their needs.

A more lateral approach to gain insights from customers is to study in detail how they use your type of product or service and to observe what practical problems they have.

Haier is a leading Chinese manufacturer of white goods such as freezers and cookers. Its engineers in rural China were surprised to find that people were using Haier washing machines to wash the vegetables they had grown in their gardens. Turning this unexpected use into a new application, the Haier development team came up with a new wash cycle designed specifically for vegetables. On another occasion a sharp-eyed engineer saw that a student had placed a plank between two Haier fridges to form a makeshift desk. The company responded by designing a fridge with a fold-out desktop – ideal for small rooms that need an extra table or desk top.

When Levi Strauss Corp observed their customers they noticed that some shrunk the jeans they bought and others deliberately ripped them. So Levis brought out lines of pre-shrunk jeans and pre-ripped jeans.

Asking customers for feedback is good but observing them can be much better. If you want to gain a march on the competition and design the products and services of the future watch your customers carefully. Look for the areas of unexpected use, the headaches and problems that want to be solved or the unusual combinations of needs or uses. They can give you the insights you need to generate successful innovations in products, services and processes.