Last week in the blog, we talked about some epic failures. Nokia, Sears, and Google all demonstrated huge failures by failing to recognize the competition and failing to understand customer needs. This week we’re going to talk about what to do differently and how to learn from these epic failures.
What to Do Differently
Hindsight is blessed with data and analysis, but as innovators we need to ask what can be done differently. At the key decision points in product development what could Nokia, Sears, or Google have done differently? These companies failed to innovate, and it cost them business. In the case of Sears, the cost has spread to employees losing their jobs and impacting growth in other arenas.
#1 – Don’t Underestimate Changing Trends
Nokia, Sears, and Google+ experienced epic failures because they failed to recognize changing consumer tastes. Moreover, these companies made a classic error of investing in sustaining innovations. Disruptive innovation serves customers with new business models, not just new technology. The iPhone offered conveniences in data transfer, no matter how clunky or slow, that Nokia devices did not.
#2 – Scale of Operations Does Not Translate to Innovation Success
Sears had huge investments in department stores across the country. The back-office operations were hefty in order to manage product purchases and distribution across nearly every household category. On top of that, Sears’ own brands, like Craftsman, required intensive management.
Sometimes, the scale of operations can add cost benefits. If a factory can increase throughput, then the variable cost per unit declines and profits increase. However, innovation suffers when the scale of operations becomes unfocused and the strategy moves to serving everyone all the time. This is the core reason that sustaining innovations slowly drive a business into demise. Focus is a key ingredient for long term innovation success. Focus is something that Sears had lost along the way.
#3 – Market Timing is Important
AR (augmented reality) and VR (virtual reality) still emerging, and we don’t yet know how markets and consumers will use these technologies. Lowe’s has had some success to help do-it-yourselfers with AR. Google Glass was probably launched too early in the product life cycle, while Google+ was launched too late to be competitive. Market timing means having deep customer insights and understanding the competition. Innovation depends on understanding technologies, products, customers, and the global marketplace. These skills require that a company look outside-in rather than inside out. Before launching a radical new product, like Google Glass, testing of features, attributes, and end-user acceptance need to be completed in a thorough fashion. Market research data is far less expensive than a failed product launch!
Epic Failures and what to Do Differently
Last week we looked at some major product and brand failures. But failures are only useful to study if we learn from them and then approach future projects with new knowledge. To prevent epic failures and take advantage of the benefits of disruptive innovation, companies need to do three things well.
- Understand market needs and consumer trends.
- Focus on what you do well and don’t scale outside your focus area.
- Time product launches based on customer needs rather than technology availability.
How to Innovate Differently
Knowing what to do and knowing how to do it are two very different skills. You know the stories of epic failures and now you need to implement innovation best practices. Join me for the July online New Product Development Best Practices Training and our August Innovation Master Mind Q&A webinar. Best practices training teaches you how to innovate effectively and the Innovation Master Mind makes you accountable for long-term innovation success. For more information please contact me at info at Simple-PDH.com.
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