The Customer Is Always - The Customer.

So many organizations say "The Customer is always Right."  Others won't take a step forward on a new product or service without extensive market research and assurances from its major customers that it likes the new product and will buy it.

That's a real risk.  Too much effort is focused on whether CURRENT customers see the new offering as a step forward TODAY.  It's irrelevant.  Although I agree completely with the concept of establishing whether there is a market for a product or service, one should never confuse innovation with having a single-minded focus on what the customer tells us it wants.  

Michael Porter says: "... If you listen to every customer and do what they ask you to do, you can't have a strategy....Strategy is not about making every customer happy. When you've got your strategist's hat on, you want to decide which customers and which needs you want to meet. As to the other customers and the other needs, well, you just have to get over the fact that you will disappoint them, because that's actually a good thing. " (http://hbswk.hbs.edu/item/6737.html)

Another voice - Mark Cuban - Don’t Listen to Your Customers: "I'm working with a company that at one point had a product that was not only best in its class, but also technically far ahead of its competition. It created a better way of offering its service, and customers loved it and paid for it.

"Then it made a fatal mistake. It asked its customers what features they wanted to see in the product, and they delivered on those features. Unfortunately for this company, its competitors didn't ask customers what they wanted. Instead, they had a vision of ways that business could be done differently and, as a result, better. Customers didn't really see the value or need until they saw the new product. When they tried it, they loved it."  ( http://www.entrepreneur.com/article/222501)

Finally, from Steve Jobs:  

"It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them." As quoted in BusinessWeek (25 May 1998)

"You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new." -  Interview with Inc. Magazine for its "The Entrepreneur of the Decade Award" (1 April 1989)

(And here is a slightly longer blog that discusses Steve Jobs' concepts very well in a B2B service environment - it's worth the read: http://www.techjournalsouth.com/2011/06/resisting-the-steve-jobs-%E2%80%9Cinnovation-temptation%E2%80%9D-in-new-b2b-products/)

Customer input is critical.  Customer focus?  Absolutely.  Customer dictated?  Not so much.