Innovation is hard. Repeated innovation is even harder. Success depends on a staggering number of factors, among them whether there is a real market need, whether users will adopt the new innovation, and whether users will pay. Even setting aside external considerations, there are still a large number of internal questions to answer: Are you selecting the right ideas to pursue? Do you have the right team in place? The right oversight structure?
In our experience working with a range of clients on innovation-related projects, we’ve found four common pitfalls among companies pursuing innovation:
They forget the user.
They fall in love with their ideas.
They seek perfection at the cost of learning.
They think about innovation ad hoc.
Pitfall #1: Forgetting the User
Surprisingly often, companies fail to consider their users when pursuing innovation. They don’t do this intentionally; they think they know who their users are and what those users need. Instead, they commit one of two sins of omission. Either they rely on assumptions about users without verifying those assumptions, or they conflate the needs of users with their own personal desires.
Both are dangerous mistakes because understanding user needs has a downstream impact on the rest of the innovation process. If you fail to identify user needs accurately, even the best product can fall flat. Take, for example, 3D television; despite being technically impressive, the technology failed because it required users to wear special glasses to watch TV in their own homes and could lead to eye strain. Consider also the Segway, which failed to revolutionize personal transportation because it missed important aspects of how and why people transit. The importance of understanding user needs to the innovation process can be seen in the mantra, “Focus on the user and all else will follow,” one of Google’s “Ten Things We Know to be True.”
The Solution: Better User Insights
One of the axioms of product management is “get out of the building,” the implication being that you must spend time with users if you wish to understand their needs. This can take several forms, from ethnographic observation-based studies to one-on-one customer interviews, panel discussions, or customer surveys. (We typically recommend a combination of qualitative research and quantitative research.) Good research ensures you’re tackling the right problems for your users before you turn to solutions, which can save countless hours down the road.
Pitfall #2: Falling in Love With Ideas
We’re often invited to help companies implement their innovative ideas, only to discover that those ideas have not been fully vetted. The cause, in many cases, is that company leaders fall into the trap of anchoring to ideas they personally love best—and love, as Shakespeare wrote, is blind. In the context of innovation, this means companies either commit to ideas they like without first testing the viability of those ideas, or they ignore important data that would call into question the validity of those ideas (confirmation bias). Unchecked, this can lead to wasted investment and products that never achieve market traction.
The Solution: Focused Ideation
To quote IDEO, great innovation happens at the convergence of desirability, feasibility, and viability. Put another way, it’s not enough to generate good ideas; successful innovations must simultaneously meet the needs of users (desirability), be implementable (feasibility), and have the potential to become sustainably profitable (viability). With this in mind, when we work with companies on innovation we encourage them to vet their potential innovations from all three angles before investing resources and time into pursuing the ideas.
While there are many models available, we’re particular advocates of the design sprint methodology and the lean canvas to vet prospective innovations. The design sprint, a framework formed at Stanford’s d.school and Google Ventures and detailed by Jake Knapp in Sprint, focuses on the desirability side of the equation, using rapid prototyping and user interviews to evaluate whether an idea will be valued by the users it is meant to target. An idea that does not resonate with users will fall flat regardless of how feasible or viable it is. On the viability side of the equation, we rely on the lean canvas model created by Ash Maurya (Running Lean) and based on Alex Osterwalder’s business model canvas (Business Model Generation). The lean canvas lays out the entire business model for an idea on one page so its components (e.g., target customers, costs, revenue streams, value proposition, etc.) can easily be tested and validated.
Pitfall #3: Seeking Perfection
Even companies that have fully vetted their ideas struggle to bring solutions to market successfully. When pursuing innovation, this struggle is often related to a decision to use a “big bang” product launch approach—a single release of a fully mature product. While there are cases in which that approach is appropriate, the danger when pursuing innovation is that it can lead to wasted time, resources, and capital because companies miss a critical opportunity to learn from the market they intend to serve. The risk is particularly acute for established industry leaders; while they invest months or years creating a “perfect” product and traversing the corporate bureaucracy for approvals, they risk allowing new players to capture their market with less perfect but nevertheless functional products. Digital photography is an oft-cited example; Eastman Kodak, which held a near-monopoly in analog photography and pioneered digital photography in the 1970s, was nevertheless late to bring a consumer digital camera to market and lost its market position.
The Solution: Rapid Product Iteration
No matter how much research has been done before an idea’s development, there is always more to be learned from real users. That’s why we advocate smaller, more frequent product releases over larger, less frequent releases, especially in the innovation space. We advise companies to bring small initial releases to market quickly to learn from the market, rather than investing in larger, full-featured releases that would delay feedback. Taking a small release to market early allows companies to observe what works, what doesn’t, and what needs to be changed before investing in full functionality. Dropbox is a great example: The company didn’t invest in creating their file-syncing platform until they had first demonstrated public interest using a simple product demo.
Others have written widely about the value of “good enough” products as a means to learn from (and adapt to) market needs. In our work, we rely heavily on Eric Ries’ lean startup methodology as a model for how to bring innovations to market successfully. Ries crafted the now-common idea of the minimal viable product (MVP)—the smallest possible feature set that can be released to the market to generate insights that inform further development.
Pitfall #4: Ad Hoc Innovation
Many companies we have partnered with lack a way to systematically act on innovation. Innovation is ad hoc, rather than an intentional part of ongoing operations. As new ideas are raised, one-off projects are initiated to pursue them. This approach is risky for several reasons. First, companies that pursue innovation ad hoc may not be structured to manage innovation initiatives well. Second, companies may miss an opportunity to continually improve their execution of innovation projects if knowledge is not carefully transferred between successive project teams. Finally, companies may miss important innovation opportunities altogether because they are not thinking about innovation consistently and regularly.
The Solution: Systematic Innovation Integration
Great research has been conducted on the value of thinking about innovation more like an investment portfolio than as a series of creative pursuits. Bansi Nagji and Geoff Tuff, for example, have advocated in the 2012 Harvard Business Review article “Managing Your Innovation Portfolio” that companies should seek to maintain a portfolio of smaller “core” innovations related to existing products, larger “adjacent” innovations that expand on existing products, and larger-still “transformational” innovations that could create new markets. Google X is an example of the approach: While the rest of the company focuses on smaller-scale innovations like improving existing Google services or creating new Google services, Google X pursues ideas that could one day become “the next Google” (according to the 2017 The Atlantic article “Google X and the Science of Radical Creativity.”).
We expand the idea of innovation integration to include not only the strategy by which innovations are pursued, but also how innovation projects are executed within the company. For example, we helped a leading global hospitality brand create a labs organization dedicated to pursuing innovation, which meant defining not just the overall innovation strategy, but also how ideas would be selected for consideration, who would participate, and how projects would be assessed. Our work typically involves answering the following questions:
How are new innovation ideas generated? By whom?
How are ideas vetted? By whom?
How are ideas funded as projects?
How are innovation projects managed?
How are new innovations released to market?
How are innovation projects assessed? By whom?
How are new innovations integrated into operations?
Answering these questions typically requires producing a company-specific innovation playbook, which in turn may necessitate process and resource changes. The payoff, however, is greater confidence that the company can react to market changes successfully (e.g., new business models, new technologies, etc.).
While innovation is hard, addressing the four pitfalls above will increase the odds of success. Identifying user needs, vetting ideas intentionally, iterating on products based on market learnings, and making innovation an integrated component of firm operations will minimize the chance that new innovations will fall short in the marketplace.
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Credera’s Innovation Service Area team helps leading brands avoid common innovation pitfalls. We partner with companies at every stage of the innovation process, from strategy to ideation and implementation. If we can help your company innovate more effectively, let’s start a conversation.
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