Perhaps I should begin this post by defining what I refer to as ‘innovation’ in the context of this blog post. Innovation is a creative idea; it could be selling an existing product to a new customer segment, using an existing technology in a new context or introducing a new product into a known customer segment. One more important aspect, it provides real value and someone should be willing to pay for it. Ideas are a dime in a dozen, but execution and generating value is where the true challenge lies.
The number of challenges one faces when innovating within a large company is numerous, developing a new product is only meant for visionaries with an appetite for risk taking, unwavering vision, total dedication and time to see it through the tough times.
If you are leading an innovative initiative in a corporate, how can you set your team up for success?
- Be realistic, very realistic
It is very useful to understand your chances of success and be very realistic about it. Product failure rate is really high, a new research by Harvard Business School shows 75% of all start-ups fail, in short it is a hit and miss proposition. This means that if you have ten ideas, only two are likely to succeed.
While this is a gloomy picture, it would be useful to acknowledge this and ask yourself, how do you reduce your chances of failure?
This leads to the next point………
- Get out the building and discover your customers
“In a startup no facts exist inside the building, only opinions.” Steve Blank
The greatest cause of product failures is not in the development of the product itself, but in finding customers. Way too often visionaries are more than comfortable to sit inside buildings and making endless assumptions. ‘Build and it will come’ seems to be the standard motto. This is a recipe for failure.
Steve Blank recommends a ‘customer development’ process that runs in parallel with product development, this involves visionaries getting out of the offices and beginning a process of customer discovery and validation. He also makes the point that products developed with senior management out in front of customers, early and often win. Hand it over to sales and marketing who have not been involved in the product development process loses.
Customer development is really about validating the assumptions that you are making at the earliest, instead of waiting for an official launch.
- Understand you are in ‘Search’ mode
Working with an existing product and incrementally improving it is very different to new product development and innovation. The rest of the company is often involved with existing products; in this case the business models and market is well understood. This means you can format business plans and forecast growth with a relative degree of accuracy.
However, the same does not apply when creating new products under conditions of uncertainty, endless hours on growth and sales figures are a pure waste of time. The focus should be on searching for a business model that works. The way to do this is to perform small experiments to test out the assumptions, learn from these experiments, then adapt or pivot the business model until it works.
The ‘lean start-up’ methodology works in this ‘search’ mode:
“It favors experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development.” Steve Blank
Customer development and the ‘lean-startup’ methodology puts customer at the heart of product development and reduces the risk of product failure. Why wouldn’t you follow it?