Our cover article, Successful Innovation Means Managing the Losers, examines how to effectively manage the potential flow of good ideas that drive product innovation.
What has differentiated the leaders in the process of developing innovative products? Discipline and metrics are the keys. Unfortunately, while many companies successfully establish the needed discipline and success metrics during the innovation process, there are three common problems that often derail the best innovation planning process.
Too Many Ideas
Too many ideas competing for management's attention in the early stages of the innovation process clamor for equal funding, creating a situation where ideas with relatively weak potential garner as much attention and resources as the strongest ideas.
Design Metrics
Too often, the innovation process takes on a life of its own. Managers tend to value and track metrics that are tied to progress through the overall stage gate process rather than a successful new product launch. This is a classic, but subtle, problem. Managers involved in product innovation must learn to "dribble with their heads up" by keeping their focus and metrics tied to the success of the product, not the process.
A Flawed Go/No Go Process
The stage gate process is designed to screen out ideas with little potential. We see problems with an overemphasis on concept development, which is not paralleled with an understanding of market attractiveness and economic viability.
In some cases, quantitative research does not enter the stage gate process until Stage Three, when dealing with validation of commercial viability and product features. This can be perilous if a concept has progressed to this stage and management is still in the dark about the basic economic viability of the product.
Economical Solutions
In our experience assisting hundreds of companies improve the efficiency and effectiveness of their product development process, we have fine tuned another tool that significantly increases the likelihood of success--focused injections of quantitative and qualitative customer and channel research earlier in the stage gate process.
Direct Sourcing of Ideas Before Reaching the First Stage Gate
New product and service ideas can come from diverse sources. We recommend setting a goal--75% of the new product or service ideas should be driven from the market. This means the ideas come from existing and prospective customers, as well as sales channel partners.
Actions - Create frequent customer "touch points." A deep understanding of the customer is generally only available when management deliberately and directly seeks to obtain it through focused research. Done correctly, new ideas are continually flowing into the stage gate process.
Managing the Flow and Saying "No Go" Earlier in the Process
A strategic investment in both qualitative and quantitative research in Stage One compliments concept development and creates a tighter screening process that precedes commercial viability testing.
Actions - Tighten up the "go ahead" criteria on Stage Two, creating a "weed and feed" report card that saves the deeper and more expensive investments of Stage Three for projects that are high probability. Inject upfront attractiveness and benefit screening, plus a check of the adoption process (often can be done with B2C internet research or a low cost B2B survey process).
Measure Success from a Competitive Angle
We understand setting financial goals for new product introductions, but setting the same metrics for each product could stifle creativity and innovation. Allowing fewer projects to make it through concept development might allow senior management more time to consider a case for making competitive quantum leaps that do not make it through a strict financial screening methodology.
Actions - Allow for differentiated measurement criteria using data
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