Applying Rigor to New Product or Services Innovation
Virtually every company I know is immersed in some kind of a Covid “Pivot”. For most companies, some part of their value delivery must adapt to our evolving situation. And we see lots of examples, where value delivery becomes digitized. In a way though, that form of “innovation” is wimpy, in that it clearly benefits the company to take services online; only now, customers will accept it as a welcomed change, due to health and safety concerns. Virtual delivery is being mirrored by companies in every category, increasing profitability without seeming to be self-serving. So, what’s not to like?
Beyond that, the kind of innovation I am thinking about is a net-new offering, that engages both new and existing customers with something they need but has not been part of your product portfolio. This type of innovation is becoming more common, and for the companies that get it right, it might be their longer-term salvation.
New product brainstorming leads to ideation and ultimately to execution
There are better and worse ways to go about the innovation process. Getting a leadership team around a table to brainstorm new product or services offerings is the common method. And compared with the day-to-day drudgery of managing a company amid a pandemic, this seems refreshing. Free-flowing brainstorms, engaging the creativity and collaboration of the group – sounds great, doesn’t it?
The problem is with this method, as commonly practiced, is the strong propensity for this brainstorming and whiteboarding to lead directly to action. In this case, the process is usually devoid of rigor and the essential deep analysis of what it will take to succeed in the marketplace. Whether the innovation amounts to creating a new product concept, or an enhanced Me-Too offering in an existing category, someone needs to do the heavy lifting of anticipating true demand, and what it will take to generate actual sales at levels that meet company needs.
This involves some detailed work around market sizing, calculation of available market, desire of buyers and channel partners to embrace the new entrant. All this, considering the presence of category incumbents, who may be delivering solid value.
Displacing entrenched competitors is every bit as daunting as creating a uniquely new category. In either case, buyers must give up or forego legacy solutions that at the very least, represent a low risk to them. Embracing your new innovative solution is in fact the riskier bet for your target customer.
There is nothing wrong with internal teams conducting initial brainstorming and product ideation sessions, if there is discipline about the need for vetting that comes next.
This is best provided by an experienced outside expert who is less concerned about sacred cows and making certain people look good. That outside expertise is usually not from your industry; after all, it’s all about the process, and not applying the filters of conventional thinking.
It does not mean you turn over the driver’s seat to a consultant. The reality is, there is almost always a bandwidth issue for your internal team, combined with the need for mastery of certain research disciplines.
The serious question becomes whether you have that constellation of homegrown talents, sufficient to provide the market insight needed to support and validate good business decisions to move forward. It is better to act as if the future of your company depends on the success of this innovation – it very well might.
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