“When the wind blows, some people build walls, others build windmills.” Chinese Proverb
Amazing isn’t it. When faced with disruption to the status quo, some organisations will try to protect themselves from its impact, whereas others use the disruption itself as an opportunity to move forward and better themselves.
It's not necessarily a pessimist vs optimist moment? Human nature naturally leans towards protectionism. Yet by looking at what is happening in the world through different lenses, opportunities can be identified from unrelated or even potentially negative situations.
We all wait for the “bright spark” flash of inspiration. That point in time when the fog and mist lifts and suddenly everything seems to fit together and a way forward can be identified.
Now, I hear you thinking “what has this got to do with innovation?”
It’s simple – the democratisation of innovation expands the remit of thought and ideation across the organisation creating a two heads are better than one environment that can be applied in problem solving (back to the pub quiz debate). In other words, by widening thought input into problem solving you have a better chance of identifying the opportunities to do better, whether that be opportunities in the face of disruption or opportunities to serve customer needs better.
Product Innovation
One of the types of innovation applies to the creation, development or improvement of the products or services your offer to your customers. This is Product Innovation and is focused on developing offerings that meet customer needs, solving their problems or providing added value to customers, and therefore differentiates your products from existing offerings in the market.
Simple definition really.
But because it is product / service focused, this activity is generally undertaken by product development teams comprising specialists from across the directly impacted areas of the business such as:
Marketing – to understand and represent what the customer wants,
Design – the team who develop what it looks like and what it does,
Operations – the folks who work out how can we make it, and
Sales – the people who are we going to shift it.
All these employees should know, understand and be part of the product development lifecycle.
So far, so good and fully understandable.
But a true innovation culture is enterprise-wide and by limiting your product development activity to just a select few employees from key focus areas, you also restrict where that innovation impetus can be applied. Remember, ideas for new products, or product improvements and updates can originate from all over the business. Rita from Marketing will get a totally different reaction from a customer than that experienced by John from Finance who has friends who use the products – or may even use them himself.
Why miss out on these valuable insights?
If staff in your business are driven by “the only way” to do things (via a command and control, process driven management philosophy) and are not encouraged to work innovatively, you will always be trapped in cycle of gaining the same singular views (and bias) thrust into the product development process, resulting in the same outcomes that may or may not fully represent what the customer is demanding.
Whereas when employees from across the whole company are encouraged to innovate, opportunities will emerge not just in the development of Products and Services but also in Business Process enhancements and creating new Ways of Working.
Let me give you an example.
Maybe it is just me, but I see some weird products being manufactured in China and sold into the UK via on-line retailing, such as these products that are offered on Amazon:
Now, I hear you saying
“But hold on Gary, maybe these are innovative products, thought up by product development teams, that went on to create new markets and satisfy unmet customer needs!”
No, I don’t think so.
Although the “How to look like Darth Vader whilst eating” chop sticks, the “Not to be used on a First Date” lip balm and the “I cannot remember eating that” nightlight are still available on Amazon, I’m sure they are not what you would call market disruptors (and will probably never be so).
Of course, this is a personal view I know but, well…
Right, back in the room!
Now, ask yourself the question: “have these crazy products been developed because the development team was too far removed from its customers and markets?”
Possibly, but I would think they were developed to meet a perceived customer demand as a novelty item with little market testing and low cost of manufacture. If it sells, fine. If not, write it off to experience.
But to avoid such futile exercises, product development should be undertaken with a defined framework and governance in place, creating a product development strategy that:
Ensures value for its existing and future customers
Ensures value for its existing and future customers,
Confirms there is demand for the new or revised products and services
The final or enhanced products are of the highest possible quality before you take them to market.
Product developments may involve new products, improving existing products, or making the user or customer experience better or friendlier. Generally, we should look upon it as a process to introduce new ideas, technologies, features, or designs to provide some form of added value to your customers.
Examples of product innovations are wide-ranging such as:
Amazon started as an online bookstore in the 1990s and evolved into a global marketplace. On its journey, it became a device manufacturer (Echo/Fire stick), publishing service (Author support), cloud content provider (AWS), fulfilment network (Prime delivery), and entertainment service (Prime). In my view, Amazon is perhaps the most innovative company in the world with a strategy comprising disruptive, radical, and incremental innovation to change the market, produce new services, and constantly evolve.
In response to market changes to a sustainable agenda, toymaker Lego has started to change the materials used in the manufacture of its famous bricks, replacing fossil fuel content with biodegradable oil-based plastics
Toyota developing the hybrid Prius electric vehicles was an innovation in the car market and the new batteries with longer ranges that are constantly introduced into the market are also examples of product innovation
The cardboard and paper manufacturer DS Smith has worked in collaboration with Coca-Cola in developing a recyclable corrugated cardboard bottle holder as a replacement for plastic shrink wrap, again in response to market shifts towards sustainability.
So to drive product innovation within your organisation you need to embed it into your approach to developing new or improved products, building it into a framework of structural or organisational aspects that will turn your product development process into an innovative process.
A product development framework
Looking at the structural aspects first, having a product development framework will help and facilitate an organisation to develop and bring new or enhanced/changed products to market successfully, guiding products through a developmental journey from idea to prototype to commercialisation, giving structure to that process and reducing the risks involved.
The product development journey is different in each organisation due to the uniqueness of products or services, the complexity of a company’s organisational or operational structure and a development process that brings together a collaboration between differing business functions such as design, manufacturing, marketing and commercial accounting.
There are numerous examples of product development frameworks available on the internet. Just open Google (“other search engines are available”, at least that’s what they say on the BBC), type in product development frameworks, hit search and you will be inundated with them.
But product innovation isn’t about a particular product development framework. It is about how you utilise those frameworks within your organisation as part of the product innovation process.
The structure of the product development frameworks or processes varies from company to company but there are several best practices I have observed.
A standard framework logically maps the development journey through a series of stages or phases, where each stage:
represents a different activity in the development lifecycle,
builds on the last adding more and more to the product development,
concludes with a governance review, referred to as a Gate, where progress decisions are made.
This kind of framework is called a “Stage-Gate” framework comprised of a series of logical progressive steps and activities and in later blogs we will dive into the detail of how a stage-gate process can be developed and applied. However, there are similarities in the route they take for product development, taking a team through a journey of:
Discovery and Scoping – finding out what’s needed through exploration, fact gathering and ideation positioning
Gather and monitor industry and consumer trends, market developments, customer feedback, potential changes in regulation/laws, competition activity, etc., then use a broad range of skills and experiences to identify what problems need solving or what customers want but don’t have
Define and scope of the market needs, requirements, and opportunities, identifying new and existing customer needs, and possible solution directions
Concept Definition and Development
Iteratively brainstorm, explore, and ideate using information gathered to generate viable concepts to address customer and market needs, then choose the best ideas to progress, reviewing what is feasible, what fits with your business (viable) and what is desirable from a customer lens.
At this stage you should get really innovative, bringing customers and perhaps even suppliers into the innovation process to really hit the requirements. How you do this will depend upon the industry you operate in but collaboration at this stage stops the costly development of failures.
Iterate by filtering out weak ideas, develop strong ones into concepts and review for feasibility, desirability and viability (a three-lens review that is included in all remaining stages).
Product Development
Turn your ideas into something real, such as a model or a prototype, to ascertain how it looks and feels, with iterative testing and modifying as necessary.
If you work in collaboration with your customer base, customer feedback can be incorporated. Again this would be an iterative process to refine.
Now is the time to involve other functions to ensure production and commercial voices are heard.
Test the product in a real environment, either with a limited scope (Pilot) and/or in a basic version of the full final solution (MVP) to ensure feasibility of manufacture & supply chain with materials and production capacity understood and secured, market potential, revenue, pricing model and margin analysis validated together with CAPEX requirements.
Commercialisation
When you feel you are ready, you can develop a launch plan and market your new product or service. This should include everything to get it into the market and the hands of your customers. As with all innovative iterative processes, once it’s in the market, you need to keep an eye on it. How is it doing? Do customers like it? Are there are any problems? The results of this monitoring will give rise to any incremental adjustments and tweaks as necessary and understanding what you might do differently next time.
Each stage in the framework builds on the last but progression through the stages is not necessarily linear. Every Stage should conclude with a checkpoint - a review of progress, referred to as a Gate where a decision should be made to:
Continue development by moving to the next stage
Go back and do further development at this stage or earlier stages (iteration) due to changes in requirements or current state not meeting expectations
Stop development and close the project as the product does not meet the defined criteria for further development.
Remember, the innovation cycle is more than just coming up with new ideas. That innovation culture drives into all aspects of product development, where ideas are converted into tangible products that meet customer needs and drive your business onwards and upwards. Successful Product Innovation is a recipe with a mix of ingredients containing:
marketing input of market knowledge, research and customer insights
design creativity
manufacturing creativity (including development and fulfilment process input)
financial commerciality from sales and finance
some form of technological expertise.
Impact of innovative product development
Products developed through an innovative process have a higher level of success and of meeting customer needs. The wider the knowledge input from across your business, the greater your chance of a winner.
History is littered with products and services that just didn’t make it for many reasons. Examples include:
Warner Bros. Discovery had to close its streaming platform CNN+ within a couple of weeks after its launch as the number of daily viewers didn’t make commercial sense. That launch had cost them $300m.
Recently Apple users were disappointed to learn that the new version of its Magic Mouse has not sorted a previous issue of charging the wireless product. With a USB port underneath, to recharge involves turning it upside-down and results in it being unusable during the charge period.
In 2016 Keurig Dr Pepper, a US beverage company famous for its single serve coffee machines and the Dr Pepper soda drink, launched an at-home soda machine. Unfortunately, the machine was hugely expensive and the resulting fizzy drinks cost several dollars for an 8oz glass. The idea was meant to extend Keurig’s machine product range beyond coffee and in the spirit of collaboration (or potential returns?) Coca-Cola, $1 billion in the project. However, the product was discontinued a few months after its launch due to its high price and other design and operating issues.
In fact according to Clayton Christensen of Harvard Business School, of the 30,000 new products that are developed each year, 95% of them fail and there are some high-profile names among the less successful product developers such as Google, Coca-Cola and Colgate.
As an aside, I was going to quote the Sony Betamax video battle with VHS in the 1980s, where the Sony product was technically far superior with better playback quality, but the VHS players were cheaper to produce. Price won in the end and Betamax eventually lost the battle.
The reason I didn’t include this example in the list above? I didn’t think the readers would remember home recorded video tapes…
I do, however, have an amusing anecdote concerning my roommate at university who, while working for a UK electronics giant, developed one of the first video phones. Unfortunately, this was before cell phones and relied on the telephone landline system. It was, in fact, an innovation before its time.
Recently I met with him for a catch-up and he mentioned that he had visited the Museum of Failure whilst he was in the US. Instantly, with a wry smile on my face, I said “Oh, was your video phone there?” He blushed…
Yet, I’m sure he will be in great company as I can see the Apple Magic Mouse being displayed there sometime in the future.
So, lets leave with an industry leaders quote:
“Most innovations fail. And companies that don’t innovate die.” Henry Chesbrough Adjunct professor and faculty director at the Haas School of Business at the University of California, Berkeley
So to summarise, although innovation in the workplace does not come packaged with a crystal ball, its wide draw on internal and external knowledge and collaborative approach does reduce the risks involved in product development.
In my next article, we will look at how an innovation culture can accelerate the development of business processes.
Until the next time…
I’m sure that after reading these blogs on innovation in the workplace you will have a backpack full of questions regarding the “What and the How” of innovation and maybe feeling a bit stuck.
Never one to leave you in the lurch, I am always happy to try to have a brief chat and address your questions. Just reach out and let’s see if we can bring resolution to what is keeping you awake at night. Email me at gary@rokaboat-emea.com and let’s arrange a virtual coffee or connect with me on LinkedIn - Gary Thompson
And one other thing – I would love to hear your feedback on this article. My father had a shop and from being a child I was taught to listen to the customer, so I welcome your comments. It’s time I practiced what I preach!