Why is an "Outside-in" approach so critical?

"The penalties for missing these opportunities are enormous; just think of Sony, the company that was so focused on its existing products that it failed to identify its potential to supply a music device that incorporated access to music. Sony could only watch as Apple Inc seized the market with the iPod, the device that has changed the way that consumers across the globe interact with music." 
   
"The premise is a simple one; that success breeds failure. As companies get more successful they become isolated from their customers, making their next steps more likely to fail. We offer a strategic blueprint for action to break this cycle, which turns the established theory of product development on its head. The traditional ‘inside–out’ method focused on differentiating your product from the next. This may have worked in the 1950s when life moved at a slower place, but is harder to do in a world where we have a choice of 250 mobile phone handsets. While the natural market perspective is to expand the customer franchise with the help of the marketer, or add new cool features to a product with the help of an engineer, the new way is to innovate around behaviours. By breaking your customers’ lives into episodes and then thinking in an unbiased way about how you fit into any of those episodes, you will create a space in which you can innovate for growth."

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