How often have companies created innovations that no one wants to buy? Have you encountered tech teams working on ideas based purely on the tech-marvel rather than a real customer-need?
As innovation leaders, how do you innovate effectively? How can technology leaders, reduce the barriers for technology adoption? How can they increase the likelihood of ideas going to the market?
The Innovation Challenge
Over the decades, dominant market leaders like Nokia, Blackberry, Kodak and others disappear – because innovation resources were not balanced. Yet a company like LEGO, recovered from the brink of bankruptcy. Back in 2003, with debts of close to $800M, expired patents resulting in copy-cat products on the market and a string of poor quarterly results – LEGO was clearly struggling.
The remarkable turnaround story initiated by the new CEO in 2004 began in the following sequence
- Triggering innovation to streamline the manufacturing process
- Killing zombies – products and initiatives that were not core to the LEGO brand
- Innovating for under-served customer segments. Uncovering needs and designing products (like Lego Friends) that recognized how younger girls played differently with Lego bricks compared to boys
There are lessons in how LEGO prioritized their efforts. Innovation leaders want to invest their time and energy in initiatives that are likely to create an impact – by reaching the market. Looking at these examples from the past triggers the thought if we’re asking the right questions?
Are we solving the right problems? Are we innovating for the people that matter to the business?
The Product Manager’s Perspective of prioritizing between ideas
When innovation teams bring up new ideas and initiatives to invest in, product leaders apply a decision framework and certain filters to shortlist the lucrative ones. The three key things product leaders think of when prioritizing between multiple new initiatives are the following:
a) Limited Resources
Financial resources give companies the ability to invest in new initiatives. However limited funding results in multiple initiatives competing for the same limited financial resources. In terms of people (a.k.a talent), organizations spend substantial time cultivating competency and building expertise in certain areas. Adding new competencies needs investments in either hiring new talent or training the existing talent pool and both take time. In the age of hyper-competition, time is a scarce resource in itself. Product leaders have to be aware of the constraints of limited resources when prioritizing between multiple innovation initiatives.
b) Balancing between Value Capture and Creation
Product Managers being the voice of the customer are responsible to create value for the customer. Yet, they have to balance the alternate side of capturing value for the business. When seeking buy-in from leadership teams for new initiatives, product leaders clearly articulate the objective of the initiative. It could be increasing market share, boosting revenues, expanding margins, boosting brand equity etc.
Thus falling in the love with the ‘problems to solve’ while benefiting the business – is the best place to be in.
c) Thinking ‘beyond products’
While it is exciting to build new products to solve interesting problems, product leaders need to weigh in other aspects in the business. Being masters of cross-functional collaboration, they look ‘beyond just the product’ idea to see how this can be taken to the market. What kind of channels? What type of communication? How to deploy these to customers? How to serve customers after-sale? et al. A Product Leader is thinking of all these aspects to some degree when prioritizing between innovation initiatives.
So, what can innovation leaders do to knock these challenges off-the-park? How can innovation teams & leaders increase the effectiveness with which they take new ideas to the market? How can they increase the likelihood of their ideas getting adopted?
In the next post I’ll outline a simple framework that addresses this perspective and helps being more effective at innovation.