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Happiness and Innovation Work

Recently, I listened to two different business-oriented podcasts on happiness.  The first one discussed happiness as a form of contentment, while the second one addressed how we can better manage our time in exchange for happiness.  Working more hours was not an element of happiness (of course) yet working better and providing for others through our work did lead to greater degrees of happiness, according to these experts.

Happy kids with their hands up outdoors

Moreover, happiness is a part of our work as new product development practitioners and project managers.  Our new product designs are successful when the features and attributes product feelings of happiness in our customers.  And with the wealth of our society today at large, we are often seeking happiness as consumers more than we desire simple, functional solutions.

What is Happiness?

Dictionary.com defines happiness as “the state of being happy,” and happy is defined as “delighted, pleased, or glad, as over a particular thing.”  This implies that happiness is a transitory mood as much as it is a continuous state of mind.  I feel happy when I learn new tools for my favorite hobby, and I feel happy when I’m on vacation with my husband.

I prefer the term content over happy.  Dictionary.com defines contentment as “satisfaction, ease of mind”.  This definition feels more long-term and deep to the soul.  Contentment may be reflected as a sense of happiness and joy, a feeling that others can see and know that you are satisfied with your life circumstances.

Each of us has our own definition of happiness, contentment, and satisfaction.  We know when we have these feelings, whether they are in-the-moment or are deep and in our souls.  And, if you’re like most human beings, you want more happiness, deeper contentment, and greater satisfaction.

The Role of Innovators

As innovators and new product development practitioners, our role is to bring products and services to people so they can increase their happiness.  This might be done by simplifying their lives, minimizing steps to complete a task, or bringing leisure to their lives.  Understanding our customers’ motivation is paramount in designing and developing satisfying new products and services.

For example, innovations that decrease the time consumers spend doing household chores can free their time to pursue activities that bring them happiness and contentment.  Products and service like flushable toilet cleaning pads, home grocery delivery, and robot vacuums all help us accomplish dreaded tasks quickly and easily.  Then, we can invest our time in more satisfying activities.

Innovators can identify new product features and services by observing customers.  Observation and ethnographic research are important tools for new product development practitioners to fully understand customer needs.  Interviewing consumers during or after task completion can help identify their pain points.  For instance, a person would express a pain point of taking a dripping toilet brush or rag to a storage area after scrubbing the commode.  The flushable toilet pads eliminate that pain point for customers.  Minimizing both the time and mess involved in an undesirable, but necessary, chore can increase a consumer’s happiness. 

You can start to brainstorm ideas for products and services by asking customers what makes them happy and what tasks they really dread.  On what tasks do they spend their time when they’d really rather be doing something else?  What are chores that have to done on the weekend when they’d rather spend time with family and friends?  Answers to these questions can guide you and provide insight to identifying valuable customer pain points.  Then, you can begin to design products and services to address these pain points and usage issues.  Innovation must start with the problem first!

Increasing Happiness with Innovation

Not all innovations automatically increase our happiness.  New product developers must watch out in designing products with lots of features and products that are all-encompassing solutions.  Too many features and options can make a product or service too complicated and many people will choose to continue with their current solution rather than spend time learning how to use a new product.  It is frustrating to exchange precious time to master a product with many features when the consumer only needs a few, basic functions.

Construction worker with machines at the background looking happy

As we consider our own happiness and contentment, we can also consider what makes our customers happy and satisfied.  I think this is what makes innovation such an engaging and dynamic career path. We get to help others save time and solve problems, and in doing so, we find self-satisfaction and contentment.

Learn More

If you want to learn more about designing and building products and services for happy customers, please join me in an innovation best practices workshop.  Prepare for your New Product Development Professional (NPDP) certification with self-study, facilitated online, or classroom courses.  You will immediately impact the success of your innovation efforts by iden3tifying strategies and tools to bring happiness to your customers.  Feel free to contact me at info@simple-pdh.com or 281-280-8717 for more information on innovation, project management, and leadership training or coaching.  I love helping individuals, teams, and organizations achieve their highest innovation goals!

© Simple-PDH.com

A Division of Global NP Solutions, LLC  

Study.  Learn.  Earn.  Simple.

Innovation Ecosystem

Innovation is hard work.  While we often imagine a really clever guy in his garage creating the next big thing, reality teaches us that discipline is a far more important trait to successful innovation than is imagination.  Discipline supports creativity and frames the context of an innovation ecosystem.

Key Components of Innovation

Innovation certainly requires discipline and creativity – as well as flexibility – for new product development (NPD) team members and leaders.  An innovation ecosystem requires pertinent processes, tools, and metrics to lead to repeatable success.  Some of these elements are:

  • A well-considered innovation strategy,
  • Product portfolio management and knowledge management,
  • An NPD process, and
  • Ongoing team and leadership training.

Let’s take a look at each element in turn.

Innovation Strategy

Every company, large or small, has a strategy.  Usually, the strategy is documented and reviewed annually.  A corporate strategy describes why the business exists and how it expects to accomplish its mission.  An innovation strategy is a subset of the organizational mission and specifically describes the details of the new product development programs.

For instance, I worked with a company that wanted to be viewed as “Number One” in an organic food category.  Their vision included customers choosing their brand over all other competitors because the food was healthy.  The innovation strategy, therefore, built on the vision of delivering healthy products to the marketplace, yet also had to strike a balance between customer tastes, product features, and the labels of “healthy” and “organic”.

Thus, the innovation strategy breaks down the corporate strategy into specific goals and objectives for a new product development program.  Healthy foods must be tasty and have textures and flavors that consumers enjoy.  The innovation strategy includes, then, a focus on customer needs and definitions (what does “healthy” really mean?) and on technology development (can we manufacture a low-fat, high fiber product?).

Product Portfolio Management (PPM)

Product portfolio management (PPM) is the system to identify in which projects to invest.  Knowledge management (KM) captures technical, product, and market data for future use.  Both PPM and KM are critical to long-term success of an innovation ecosystem.  Yet, historically, both PPM and KM fail in implementation.

PDMA studies show that only about half of companies have a well-functioning PPM process.  This is a disappointing statistic since PPM is how we make decisions regarding which NPD projects to advance and which to halt.  PPM provides an evaluation and comparison of all innovation projects based on competitive advantage, market attractiveness, technical feasibility, and profit potential.  An effective innovation ecosystem uses PPM to guide data-driven project decisions.

Likewise, an effective knowledge management system captures the tacit knowledge of customers, subject matter experts, and key stakeholders and translates these disparate bits of information into explicit knowledge.  It is inherently difficult to ask a customer what features they want in a new product, but KM allows us to save and share customer challenges, desires, and feelings about product usage.  KM goes hand-in-hand with PPM by supporting clear definitions of customer needs.

NPD Process

Established NPD processes are also critical to an organization’s long-term success with repeatable innovation.  An NPD process needs to be formal and structured with key steps, roles, and responsibilities determined in advance for all innovation projects.  However, the specific NPD process deployed by a company should fit its culture, scale of operations, and degree of innovativeness sought.  The standard NPD processes that my clients use include traditional staged-and-gated processes, Scrum, and hybrid processes.

A traditional staged-and-gated NPD process follows a linear pathway through a project.  Designed by Robert G. Cooper in the late 20th century, the NPD team will set project requirements early in the process and will build the product according to this pre-determined feature set.  Cooper recommends – as do I – to continually test the product assumptions with a wide range of users throughout each stage of the NPD process. 

A Scrum process follows the Agile philosophy by adapting the work in a short sprint (e.g. two to four weeks) to the highest priority feature or feature set.  Customer involvement is intimate in a Scrum NPD process as the customer both sets sprint priorities and approves the incremental product output from each sprint. 

Finally, hybrid NPD processes are becoming the norm in innovation as neither a traditional staged-and-gated process nor an agile/Scrum approach is ideal.  Hybrid NPD processes support the innovation ecosystem through continuous communication with the customer while utilizing a formal requirements design and development methodology.  Keep in mind that no NPD process is perfect, and an NPD process should be updated regularly to reflect organizational, market, and technology needs.

Team and Leadership Training

A successful ecosystem relies on a clear strategy and established practices and procedures (PPM, KM, and NPD processes).  To make the cogs turn, however, people must be motivated and inspired to do creative work while at the same time understanding organizational boundaries and limits.  Team and leadership training is the last, but perhaps most critical piece, of the innovation ecosystem puzzle.

NPD teams and innovation leaders benefit from New Product Development Professional (NPDP) and Best Practice Training.  In these public or customized workshops, team members safely learn how to clearly identify the innovation strategy, implement PPM and KM, and streamline the NPD process.  Moreover, teams learn the tools in market research to understand, test, and validate customer needs with concept tests, prototypes, and post-launch reviews.

Likewise, teams need to develop cross-functional and conflict management skills.  These are learned and practiced through Situational Team Leadershipand Virtual Team Training.  Virtual teams offer a huge advantage for innovators to tap into local market information while designing a product for global reach.

Finally, leaders need to approach innovation with flexibility, adaptability, and patience.  Leaders should be trained in situational leadership, virtual team management, and change management in addition to understanding the overall NPDP best practices.  Innovation leaders also need ongoing support since other the NPD function is often isolated from other business functions and requires special skills and business frameworks. 

I recommend an ongoing sharing and exchange for innovation leaders with a trusted group of like-minded product management professionals.  Having your own personal advisory board facilitated by an innovation expert can help you advance and accelerate your innovation ecosystem.  Check out the Innovation Master Mind as a way to rapidly improve your innovation programs through industry collaboration and problem-solving.  (Register here for a FREE pilot session of the Innovation Master Mind on 23 January 2019.) 

A Successful Innovation Ecosystem

I am constantly reminded of the delicate balance in nature’s ecosystem.  Rain, sunshine, and fertilizer allow plants to grow and thrive.  An innovation ecosystem requires feeding and nourishment to also grow and thrive.  Key elements of an innovation ecosystem are the innovation strategy, product portfolio and knowledge management, an established NPD process, and team and leadership skills development. 

Innovation is fun and exciting!  When we apply and formalize these elements in an innovation ecosystem, we realize both personal and professional success while delighting our customers. 

Learn More

Feel free to contact me more information on customized NPDP training.  I can be reached at info@simple-pdh.com or 281-280-8717.  I love helping individuals, teams, and organizations achieve their highest innovation goals!

© Simple-PDH.com

A Division of Global NP Solutions, LLC  

Study.  Learn.  Earn.  Simple.

5 Most Effective Skills Innovators Need

When I tell people that I work in innovation management, I am often asked what product I make.  Of course, with my hobbies, I make lots and lots of scrapbooks and greeting cards.  But, in my business serve my clients more than I create products.  I want to create knowledge and skills for individuals and businesses to take their innovation programs to the next level.  Innovation management is more about learning a continuous improvement process than it is about making “things”.

One of the most rewarding features of my job is to watch an individual or a company develop their own mastery of innovation.  There are five critical skills that innovation managers and new product development (NPD) practitioners need to be effective and to build sustaining innovation programs.

#1-Know the Fundamentals

In sports, music, or theater, participants practice drills on the fundamentals.  Quarterbacks catch the ball from the center and pass it, over and over again during the week and during the off-season.  Pianists play scales, repeatedly, to provide nimble fingers and practice for a concert in B-flat or F-major.  In theater, voice coaches train actors and actresses in delivery as they practice raising and lowering their pitch to build suspense for the performance.

NPD practitioners also need to practice the fundamentals.  Too often, we assume we know what customers want since we assume the project goal is to add features and functionality to the product.  Assumptions are performing, without the practice, and that can be a disaster!

Instead, innovation managers need to ensure that the NPD effort is based n fundamental customer needs.  NPD teams must understand the basic challenge or problem that a customer is trying to solve.  Those customer expectations are matched, one-to-one, with NPD project goals in successful innovation.

For example, a friend of mine had five dogs.  She would launder their blankets and bedding, then undergo a cleaning process for her washing machine.  A purely product-centric view of her challenge would be to make the bleach bottle easier to pour.  Yet, digging into the core need, new products have been released to clean and disinfect the washing machine by running a normal load.  Successful NPD teams focus on the core customer need and seek fundamental understanding.

#2 – Identify and Manage Barriers to Innovation

Innovation introduces change.  That’s why it is such a fun field in which to work.  Yet, change presents a tug-of-war for most people.  We are excited to try something new while at the same time, we are unsure if the risk is worth it.  Resistance to change is one barrier to innovation.

During conversations with existing and potential customer, innovation teams will identify any barriers or constraints to new product development.  I recommend creating a handful of personas, or generic customer profiles to help envision the barriers to innovation.  In this way, the NPD team can “query” the persona during product design and development to validate concepts, features, and functionalities.

For example, one persona may be a family with a lot of pets, like my friend.  Another persona may be a family with kids that play sports and have very dirty clothes needing daily laundering.  And yet another persona may be a single person living in an apartment who rarely needs to do laundry.  The NPD team uses these personas to understand resistance or constraints in the product design, since the challenges of each are unique.

#3 – Plan, Execute, and Be Flexible

There has been a ton of debate in recent years about the best project management methodology for innovation efforts.  Phased and gated processes rose in glory to be dissed by proponents of agile.  Many companies then jumped onto the agile bandwagon to find products still failing in the marketplace.

What’s most important in successful innovation is to plan your work (including customer observation, testing, and validation), execute to the plan, and be flexible (be agile) as needed.  NPD managers and CIOs (Chief Innovation Officers) should be trained as exceptional leaders first, and then, in the particular NPD processes for project management.

Successful leaders often have coaches or master mind groups to share ideas and to learn best practices.  Transformational leaders understand the importance of customer inputs and balance these needs with operational demands in manufacturing and distribution.  Innovation leaders are flexible and adapt to each situation to continuously develop team members and to improve the innovation management process itself.

#4 – Collaborate with Everybody

Another aspect of successful innovation is learning how to collaborate effectively.  Collaboration is not a one-way customer interview or survey, and it is not assigning and directing tasks to NPD team members.  Instead, collaboration builds on the skills and needs of everyone involved in the project, both internally and externally.

Employees working in NPD are often motivated by learning.  This desire to learn can be capitalized by linking NPD team members with target customers to develop a customer journey map and to gain specific market feedback.  Technical folks learn and develop collaboration skills working directly with customers.  Likewise, sales and marketing personnel grow in knowledge by collaborating with technical designers to groom features and attributes for a new product.

And, we don’t want to leave out the customer as a resource.  Customer collaboration means observing, questioning, and testing.  You may meet the customer in the environment where s/he is using the product or service, or you may invite the customer to your facility.  What’s crucial for innovation success is a long-term, interactive relationship with both external and internal customers.

#5 – Evaluate and Measure Success

In peer coaching, I am constantly reminded that success has not a singular definition.  One person views success as a launching a new business, while another views success as selling their enterprise.

Each innovation project has a set of measures that define success.  The metrics ought to be aligned with the organization’s mission, vision, and values.  And the success metrics must be agreed by the NPD team upfront.

For instance, one NPD project used sales volume and market penetration as measures of success.  Sales volume is a readily acquired number – how many units were sold?  Digging deeper you can also gain additional insight into the value of the new product by calculating the ratio of manufactured items and sales price (profit margin).

Market penetration gave the NPD team another measure of success with their target customers and a measure to compare against competition.  Market penetration provides the percentage of branded products sold versus the entire set of products and product solutions available.  “We sold 63% of single use washing machine packs; our nearest competitor controls 20% of the market.”

If innovation success metrics don’t align with the project plans and goals, it’s time to make a change, including further conversations and collaborations with customers.

Necessary Skills for Innovators

Improved speed-to-market and increased return on investment (ROI) depend on the successful initiation and execution of NPD projects.  Successful innovation managers practice, refine, and excel with all five key skills.  The first of these competencies is maintaining customer contact to gain insights regarding market challenges and problems.  This is a foundational innovation skill.

Next, innovators and NPD teams must identify constraints and barriers to developing products and services that delight the customers.  These barriers may be internal processes or a customer’s willingness to invest in a new product solution.  This leads to the innovation skill set of planning, implementing, and adapting.  No project management system is perfect and successful innovators are flexible in how a project meets its goals to deliver exceptional products to a target market.

Fourth, collaboration is a skill that successful NPD managers use in developing their teams, the new product, and customer relationships.  Collaboration requires an open line of communication, empathy, and favors doing something rather than talking about it.

And, finally, innovation success is measures to verify value delivery and to learn.  Metrics for each project are different, but are always objective, leading to more effective decisions.

Learn More

There are two ways to learn more about leadership skills for innovation.  First, New Product Development Professional (NPDP) certification addresses best practices in innovation from devising a business strategy to idea generation and to market research for product concept testing.  Second, CIOs, NPD leaders, and R&D managers who are committed to taking their innovation program to the next level must participate in the Innovation Master Mind (IMM).  IMM is a 6-month peer coaching group that allows you to extend your NPD knowledge beyond NPDP certification and to collaborate with other CIOs and innovation managers.  You will realize improved efficiency and growth from our Life Design Master Mind (LDMM), IMM, or through NPDP certification which entails a deep dive into strategy and NPD processes, including design thinking.  Feel free to contact me at info@simple-pdh.com or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

Seeking Alignment

Innovation managers, project leaders, and engineering directors are all charged with seeking alignment in an organization.  But, what does “alignment” mean and how do you do it?

Strategic Alignment

All successful companies have a strategy.  The strategy comprises the mission, vision, and values of the firm.  It describes the purpose for being in business, beyond making a profit and delves into how the organization can influence the world around it.  A strategy describes what work will be done, how it will be done, and when it will be done.

Anyone working for a company in a role of new product development (NPD), in R&D, or in market research, must clearly understand the corporation’s overall strategic mission and act accordingly.  This is the heart of “strategic alignment”.

Each project that is undertaken will have its own set of goals and objectives, yet these expected outcomes must align and support the overall mission of the firm.  A project that adds language and accessibility features is supporting the company goals that seek to grow international sales.  A new product project that uses less expensive raw materials is aligned with the firm’s operational objectives to minimize manufacturing costs.

Innovation, NPD, and R&D managers are most successful when they can translate the high-level organizational strategies into tactical and operational goals.  These objectives then drive project selection and execution.

Aligning Resources

Certainly, it is the responsibility of project, engineering, and functional managers to execute projects with fiscal accountability.  It is also a project manager’s objective to deliver the scope of work on-time.  And while financial and equipment resources are important, long-term innovation success depends on the human resources dedicated to growing and improving.

People are generally split in action between taking creative risks and making predictable bets.  Innovation requires a balance, too, and a trade-off among variables that lead to radical innovation and those that support the existing business.  Managers and leaders must encourage new ideas, yet screen concepts for profitability.

Managing teams is a tough task because with micromanagement or in applying too much process structure, we can stymie the creation of new ideas.  New ideas provide competitive advantage and build customer satisfaction.  On the other hand, many managers believe that giving too much free rein to teams can lead to chaos in the endless churn of problem-identification and infinite brainstorming.

Thus, aligning resources requires balancing team member strengths with project objectives.  Using the tools of the Virtual Team Model (VTM), for example, can help a leader identify which individuals are novices and which are experts.  The leader can pair these people to create customer solutions that are both novel and practical.  Meanwhile, the transfer of tacit organizational knowledge occurs flawlessly – and almost magically – as a mentor coaches a new team member.

Customer Satisfaction and Alignment

Our final topic in seeking alignment is built form customer satisfaction.  In innovation, we seek customer alignment through design thinking.  Design thinking is a collaborative approach to new product development that focuses on customer empathy to create the best solutions to a problem.  Tools in design thinking include in-depth customer observation and experimenting with various possible solutions.

A lot of products fail in a marketplace because the customer is not involved in the process.  Successful innovators align product development efforts with consumers and end-users.  The process of immersing the innovation team in the customer’s situation allows deep insights that clarify the definition of the true problem.  For example, by observing people change tapes or CDs frequently, Apple noted customers wanted to have more variety of music available on their portable devices.  Then, through rapid experimentation, the found consumers were willing to trade-off sound quality for more selection.  It is only through such close observation of users that customer alignment is achieved.

The Crucial Business of Alignment

Sometimes it is fun to be the dissenting voice at a party.  And sometimes it is adventurous to take the less-travelled pathway.  But, typically, being aligned with the group will reap the largest rewards.

Alignment in business leads to the greatest rewards, too.  From an innovation perspective, strategic alignment leads to greater financial success since NPD programs take advantage of opportunities and strengths within the firm to outpace the competition.  These results depend on resource alignment, so managers and leaders must create job opportunities that build on employees’ and team members’ skills.  Successful innovation teams are diverse yet strive for a common goal.

Finally, the most successful innovators align NPD with customer wants and needs.  Observation and rapid experimentation demonstrate customer collaboration in the design process yielding faster time-to-market and higher levels of consumer satisfaction.

Learn More

There are two ways to learn more about aligning business goals with innovation.  First, New Product Development Professional (NPDP) certification addresses best practices in innovation from devising a business strategy to idea generation and to market research for product concept testing.  Second, CIOs, NPD leaders, and R&D managers who are committed to taking their innovation program to the next level must participate in the Innovation Master Mind (IMM).  IMM is a 6-month peer coaching group that allows you to extend your NPD knowledge beyond NPDP certification and to collaborate with other CIOs and innovation managers.  You will realize improved efficiency and growth from our Life Design Master Mind (LDMM), IMM, or through NPDP certification which entails a deep dive into strategy and NPD processes, including design thinking.  Feel free to contact me at info@simple-pdh.com or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

Do You Have an Innovation Blueprint?

My gym has recently undergone a facelift.  The owner had the lobby tiled and painted with a modern look, bought new furniture, and replaced all the towels.  He also had the workout rooms painted to coordinate with the equipment colors and ordered new weights and equipment for the free-weight area.

I happened to be at the gym when they brought in the new Nautilus equipment for the free weight area.  There was a team of eight guys to assemble and install the new equipment, and to move and rearrange the equipment that was retained.

What totally surprised me was the lack of a plan for an equipment lay-out.  The lead installer had his guys start setting up equipment in the middle of the room.  The owner explained how she’d like a different placement of the equipment, but the installer told her it needed an 8-ft clearance for the accessories.

Meanwhile, the helpers continued to take out old equipment and assemble new equipment in whatever place they thought was appropriate.  In the end, the television (which is continuously tuned to a sports channel) is blocked from view in about 75% of the free weight area.  Clearance between pieces of equipment is irregular and to access one of the free weight racks, you have to walk behind a 4-ft high partition directly under the television, dodging the accessories sticking out from the Nautilus equipment.  At least then you can check the scores…

It was apparent to me that there was absolutely no plan for the equipment.  No room lay-out with a sketch of an equipment arrangement existed.  The entire installation was done ad hoc and without input from personal trainers as to the logical flow of equipment in the room.

The Problem with Ideas

It was a great idea to replace aging equipment with new equipment.  It’s likely the capital cost will offset the maintenance costs.  New gym weights and machines may attract new members leading to increased profit for the owners.

The problem was that the idea was half-baked.  The gym owner ordered equipment without a plan to lay it out or to install it.  Most importantly, the voice of the customer was neglected.  I don’t want to work out on a Sunday afternoon if I can’t follow the football game!

Does your innovation program have a lot of ideas that fail to materialize into actionable plans?  I know a lot of organizations believe that they are “innovating” if they hold a brainstorming session and generate 100 or 200 new ideas in the course of a day.  That’s great, but how do you know they will fit?  Ideas have to fit your business model and address needs from the voice of the customer, just as the equipment has to fit in the gym’s weight room.

Creating a Blueprint

If I had been the gym owner, I would have taken graph paper at a scale of one square equaling 1-sq ft and sketched the room – a rectangular shape with the width of the room a little shorter than the length of the room.  I would have next graphed and cut out the footprint of each piece of equipment.  The bench press needs a footprint of 4×4 ft, for example, and the seated leg press needs a space of about 4-ft x 6-ft.  I would have shuffled around the models of equipment and checked with a trainer to see if the flow made sense.  Is it okay to have all the lower body machines next to one another?  Can everyone see the television from each station?  Are the free weights accessible for people on the mat or on the benches?

In innovation, we also make blueprints of our ideas.  We often use tools from design thinking to ensure we understand customer needs.  Instead of shuffling cut-outs of equipment on graph paper, we share prototypes with potential customers to test the “lay-out” of our products.  What do they think of the different features?  Is the form complementary to the function?  What’s missing?  Which function is just too much?

We formally call this exercise product concept testing because we are validating various concepts with potential customers.  A key output of the product concept test is to clearly understand customer needs and their emotional reactions to the various ideas for a new product.  We want to eliminate the bad ideas at this stage – like not being able to see the tv while you’re lifting weights.

Further, an important result of product concepts tests is to understand which functions are crucial to a customer.  These are the ones that draw intense emotion, such as “I couldn’t live without it.”  Or, “Well, that’s okay, but…”  Qualitative responses to features in a product prototype lead the new product development (NPD) team to the deepest insights about a new product.  Build this, add that, eliminate those.

How to Make an Innovation Blueprint

In mapping the best layout of gym equipment, we can expect a lot of trial and error.  Putting the bench press too close to the fly machine may introduce a usability issue.  Putting the rowing station too close to the free weights rack can cause a clearance issue for users.  Likewise, making a product too complicated with too many features or too many functions can cause adoption issues.

We must test multiple concepts with potential customers to fully understand their needs and challenges.  Sometimes what looks like a good solution might not be validated in testing.  It is okay to fail a product concept test and far less expensive to sketch a new plan than make adjustments after the product is commercialized.

Learn More

There are two ways to learn more about creating an innovation blueprint.  First, New Product Development Professional (NPDP) certification addresses best practices in innovation from devising a business strategy to idea generation and to market research for product concept testing.  Second, CIOs, NPD leaders, and R&D managers who are committed to taking their innovation program to the next level must participate in the Innovation Master Mind (IMM).  IMM is a 6-month peer coaching group that allows you to extend your NPD knowledge beyond NPDP certification and to collaborate with other CIOs and innovation managers.  You will realize improved efficiency and growth from LDMM, IMM, or through NPDP certification which entails a deep dive into strategy and NPD processes, including design thinking.  Feel free to contact me at info@simple-pdh.com or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

The Product Post-Launch Review

Every new product development (NPD) should have a post-launch review.  In fact, I normally recommend three separate reviews to ensure various learning perspectives for innovation.  But, before we get into how often a post-launch review is held, let’s first discuss three important characteristics of innovation lessons learned.

What is a Post-Launch Review?

Post-launch reviews are lessons learned audits of new product development projects.  The goal of a post-launch review is communication.  NPD teams need to communicate successes, so they can institutionalize process and practices that build project efficiency.  Teams also communicate financial results of projects to senior management.  Finally, NPD project leaders communicate best practices among themselves to share learnings and to improve project planning for the next initiative.

In the case of communicating among NPD project leaders, a post-launch review report may not provide sufficient detail.  Often, Chief Innovation Officers (CIOs), NPD managers, and R&D leaders need on-going support and communication beyond their internal ranks.  For rapid learning and best practice transfer I recommend that NPD project leaders participate in peer discussions with others in similar roles.  Peer-coaching through a master mind group allows NPD mangers and CIOs to quickly learn and translate best practices and to benchmark NPD processes across a variety of industries.

While the goal of a post-launch review is communication, the objective is learning, especially learning from failure.  While failure doesn’t always feel good, innovation success is built on the lessons learned from ideas and concepts that didn’t work.  NPD processes are designed to gain early customer feedback so that features desired by consumers are included in new product designs.  Other features, functions, and attributes are not incorporated into product designs if customer feedback is negative.  Learning is fundamental to long-term NPD success.

Characteristics of a Post-Launch Review

So, with the definition of a post-launch review to drive feedback, learning, and communication to support continuous improvement, what are the characteristics of this lessons learned audit?  First, it must be prompt.  Next, it should be periodic.  And, finally, the post-launch review must be propelling.

Prompt

There are three key times to hold a product post-launch review (PLR).  The first post-launch review (PLR‑1) is held as the new product is commercialized.  At this point, the goals of communication and learning focus on how the NPD process worked.  Are there special practices that allowed the team to work together more effectively or enhanced team productivity?  Were there any policies, forms, or templates that created bureaucracy and could be eliminated from future projects?  How long was each NPD process phase and what were the associated costs?

In my work, I have observed that team cohesiveness is often discussed during the PLR‑1.  Team members who are familiar with their counterpart’s working style typically generate results quicker.  Some variation in team composition helps drive creativity through diverse perspectives as well.

Periodic

The first post-launch review is held promptly as the new product is launched.  Next, there are periodic lessons learned reviews held to monitor the product and the response of the market.  Whereas the PLR‑1 focuses on communication among team members and improvement for NPD processes, PLR-2 and PLR‑3 also add emphasis on customer acceptance and the financial performance of the product.

PLR-2 is optional, yet I highly recommend this lessons learned audit step if the product sales cycle is long.  The NPD team and senior executives attain early sales information to determine the acceptance of the new product in its intended market.  Typical measures include sales volume, revenue, and market penetration.  Other variables to consider are degree of product cannibalization, competitive response, and market share.  Quality issues and marketing messages are adjusted as necessary, depending on the PLR‑2 feedback vs. expectations at product launch.

All projects must undergo a PLR‑3 audit.  This lessons learned review is conducted one year after commercialization or at the completion of a full sales cycle for the new product.

Like the PLR‑2, the PLR‑3 focuses on customer satisfaction measures and financial metrics.  If both are positive, NPD teams begin investigating potential product improvements for next generation products, derivatives, and enhancements.  If either customer satisfaction or financial results are less than expected, senior executives make a decision to revamp the product or to pull it form the production schedule.

I have worked with some companies that do not perform periodic lessons learned reviews.  Bad products with poor customer acceptance and unattractive cost-benefit ratios live on.  This is mostly due to the lack of a decision rather than making the wrong decision.

Propelling

In addition to learning and communication, the purpose of the post-launch reviews is to keep the organization looking forward.  Results, data, and outcomes of the three post-launch reviews will propel the firm to future innovations.  These next generation NPD projects may branch from the earlier successes of product launches.  Or the next NPD project may result from learnings of what didn’t go well during a prior project.

In propelling the organization forward, the post-launch review must drive focus on the customer and the internal processes for innovation.  Companies that regularly conduct post-launch reviews for all NPD projects are more efficient and productive in time-to-market because of best practice transfers.  Again, you can benchmark and speed innovation implementation by participating in an industry master mind, benefiting from facilitated peer-coaching.

The 3Ps of a Post-Launch Review

Post-launch reviews are often neglected in the busy-ness of post-commercialization activities.  Yet, the lessons learned that are communicated and transferred among NPD project leaders are of infinite value to long-term innovation success.  Post-launch reviews must be prompt, periodic, and propelling.

To Learn More

There are two ways to learn how to conduct effective post-launch reviews and drive speed-to-market.  Please join us in the Innovation Master Mind (IMM) group or a New Product Development Professional (NPDP) certification workshop.  IMM is a 6-month peer coaching group that allows you to extend your NPD knowledge beyond NPDP certification and to collaborate with other CIOs and innovation managers.  You will realize improved efficiency and growth from LDMM, IMM, or through NPDP certification which entails a deep dive into strategy and NPD processes, including design thinking.  Feel free to contact me at info@simple-pdh.com or 281-280-8717.  At Simple-PDH.com where we want to help you gain and maintain your professional certifications.  You can study, learn, and earn – it’s simple!

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

What We Can Learn from Failure

Any project, product, or engineering manager knows that we can learn from failure. Sometimes it is painful, but the learning often outweighs the misery of a lost opportunity. Learning new approaches or alternative ways of doing things is how we advance over professions, personal growth, and even technology.

In “Designing Your Life,” by Bill Burnett and Dave Evans, three types of failures are described. The authors argue – and I agree – that we should approach “learning from failure” differently depending on the category of the missed opportunity.

Screw-Ups

The first type of failure is a simple screw-up. This is also known as a mistake or error. We know what to do to be successful in the situation, but something just happened to prevent the right thing from happening.

We don’t really learn from screw-ups because we know the right thing to do already. Just this one time, something prevented us from acting in the normal way we would. Maybe you missed your spouse’s birthday because you were swamped at work and travelling across the globe. While the excuse might not pacify your spouse, you have never missed a birthday in over 20 years of marriage. It’s just a screw-up and won’t happen again. You can put a reminder on your calendar or design checklists to prevent future screw-ups.

About a year ago, I had a large-sized screw-up. I was stressed over the impacts of Hurricane Harvey and my father-in-law who had entered hospice care at the time. So, I accidentally copied the wrong course materials into one of the college classes I teach online. Immediately, students swamped my email asking if they had enrolled in the wrong course and why were all the assignment due dates for last semester. Some were accusatory, indicating that the Chapter 1 material had literally changed (it hadn’t). Unfortunately, some students didn’t even notice the error (but that’s a story for another day).

At first, I agonized over how to correct my mistake. I tried of a variety of technical solutions and realized there was not going to be an easy fix. More importantly, I let go of the emotion attached to making a big screw-up and acknowledged that it was a just a one-time error. In the future, I now know that I need to double-check before I double-click!

And I really can’t learn anything from this screw-up that will improve my performance as a professor or enhance my knowledge about becoming a better project, product, or engineering manager. We need to be forgiving of ourselves when we screw-up and then move on.

Blind Spots

Burnett and Evans call the second type of failure a “weakness”. These are errors and lost opportunities that we recognize occurring over and over again but are arenas in our lives in which cannot (or will not) improve. Like a screw-up, we know the right action to take but the task is not viewed as important enough to change our behavior. Continuing to make the same mistake may cause us a headache yet we (stubbornly) do so again.

Because blind spots do not cause us long-term emotional or physical distress, we don’t learn from these failures. There really isn’t any opportunity for growth through correcting these weaknesses, either. For example, I tend to put off bookkeeping until the credit card bill arrives. I know that a more effective strategy is to do bookkeeping on a weekly basis (which would also keep my desk clear of papers, invoices, and receipts), but I have a blind spot. I don’t like doing bookkeeping and because the task gets completed anyway, there is no long-term pain that will force me to change my behavior. The worst-case scenario is a small headache as I rush to input revenue and expense data when the bill arrives in the mail.

Growth Opportunities

The failures that we value as project, product, and engineering managers are growth opportunities. These are the reason why we do lessons learned reviews to identify how we can improve future activities to yield better performance. The growth opportunities are the times when we see errors, mistakes, and failures from different perspectives – and when we can calmly and clearly identify a better approach to solving a problem.

During my career, I supported marketing and maintaining customers for a chemical catalyst material. Luckily, I had the opportunity to learn from a failed communication. A client from an Asian country was sending frequent emails asking for a specific technical solution to a problem their plant was facing. There were a half dozen or more names on the cc: list of the email. I didn’t know these folks at the customer’s plant, but I assumed that since my contact had included them on the email, my response should also include these people.

So, I carefully explained the operational adjustment that was necessary and hit the “send” button. The next day, I found the same question in my email inbox with an added statement that implied I had not addressed their problem. I rephrased my response. And the next day, the question re-appeared. I could sense the customer’s growing discontent and frustration. I, too, was puzzled why the plant wouldn’t implement my solution.

After a few rounds of emails that went no place, I decided to reply only to my contact with no one else on the distribution list. This resulted in a new response. He was grateful for the solution offered and it worked perfectly! I learned from this failure.

First, in his cultural context, my contact need to retain “face” in the situation. He could achieve this by providing the solution on his own to his colleagues. With my “reply to all,’ I was robbing him of the chance to demonstrate technical competence in an emotionally-charged environment.

Next, and more importantly, I learned that communication is sensitive to each independent situation. My German customers would have been annoyed had I not used “reply to all”. Today, I like to consider each name on an email list to determine whether its of value to the individual. I also like to consider the social and cultural environment of the communication. And, instead of “assuming,” I will ask.

In short, I learned a lot from this failure that has given me opportunities for both personal and professional growth.

Learning from (Some) Failures

When we take a look back at our, we should categorize the failures and learn from the growth opportunities. There’s no use in losing sleep over a screw-up. It’s just that – a mistake. The right approach is to recognize and acknowledge the error, sincerely apologize, and move on.

Likewise, with blind spots or weaknesses, we should use scheduling tools, checklists, reminders, and other time management tools to help us be more efficient. Yet, it’s okay to acknowledge that changing our behavior in these situations is of limited value in advancing a career as a project, product, or engineering manager. Eliminating the blind spot might free us of minor headaches but won’t necessarily make us better people.

Instead, as you review your performance throughout a day, examine the failures for growth opportunities. These failures, errors, or mistakes take you by surprise. You observed an outcome you didn’t expect. Why? What could be done differently if you encounter a similar situation tomorrow? How would a trusted friend or mentor approach that same situation?

In our on-line tutorial on Design Thinking and in our Agile NPD course, we discuss failing fast and failing often to drive learning. However, we must first categorize the type of failure to benefit from lessons learned. Not all failures offer a growth opportunity, but we must be open and honest when we do encounter such circumstances. Join us for the Agile NPD course or check out our self-study and other NPDP Workshops. Feel free to contact me at info@simple-pdh.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!

 

Reading Recommendation

We discuss different customer insight methodologies in NPDP Certification Prep: A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.  Some other books you might enjoy:

 

Speaking on Design Thinking

  • 25 July 2018 at PMI-Houston Energy Corridor Lunch and Learn
  • 15 August 2018 at Houston Organizational Development Network Meeting
  • 7 September 2018 at Texas Association of Change Management Professionals Conference

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

 

 

Lean Innovation

Many entrepreneurs come up with great ideas. They decide to sell these new products and services into a market yet are often disappointed at the customers’ responses. Sales revenues do not generate adequate income to cover costs and so, the business shuts down.

Corporations, likewise, struggle with innovation. A grand technical breakthrough is converted to a commercial product. But, existing customers don’t really seem all that interested in the new features and few new customers are drawn to the brand through the new offering. The product may linger in inventory for months or years while R&D moves on to the next cool technical invention.

Study after study shows that new products fail to achieve sales targets or meet customer satisfaction goals. This is not an issue with strategic objectives but rather a matter of implementation. New product development (NPD) is not simply a matter of great ideas. New product success is a matter of meeting customer needs.

The Lean Startup Method

The Lean Startup has its roots in the lean manufacturing movement, pioneered by Toyota. In lean manufacturing, quality is baked into the product by operating with small batch sizes. If a quality issue arises, fewer products are wasted to scrap or rework. Changes can be implemented quickly to improve the products as a quality issue is resolved. In essence, learning and continuous improvement are the real products of lean manufacturing.

Similarly, learning and continuous improvement are the core concepts of the lean startup method of innovation. “The goal of a startup is to figure out the right thing to build” (pg. 20). Entrepreneurs have the initiating idea, but ideas are not perfect at birth. They need to be nurtured and groomed to grow into marketable products.

However, just as every parent claims their baby is the most beautiful and most intelligent of all children ever, entrepreneurs and new product development practitioners have blinders when first testing their new products. We tend to dismiss negative feedback by saying that those weren’t really our target customers (Chapter 3 of The Lean Startup). And we sue our optimism bias to continue to build the feature we like when potential customers give any sign of neutral or positive feedback on the feature selections.

Therefore, it is imperative that entrepreneurs and NPD teams capture and assess all potential and existing customer feedback. Consider if an automobile manufacturer knows that there is a quality defect on the assembly line. Will it cost them more or less to allow the defect to continue? Likewise, will it cost the entrepreneur more or less to continue to design and build a product that is ‘defective” (not meeting a customer’s needs)?

Steer

At the heart of the lean startup method is the “Build-Measure-Learn” feedback loop. Early, frequent, and small product concept and feature tests validate the vision for the new product. But, to grow a business, entrepreneurs must test a bevy of assumptions. These assumptions cover how we perceive customers will access and purchase the product, how they will use the product, and how they expect next generation products to be designed and integrated into their ecosystem.

In The Lean Startup, Ries gives a running example of his company IMVU, founded for the purpose of computer user to create movable avatars. The entrepreneurs assumed users would bring along their friends and by increasing the number of users, increase revenue. When they honestly assessed how people were using their product, the discovered that people really wanted to connect and make new friends.

These enlightening moments allow for a company to “pivot”. A pivot is a change in the strategic direction for a new product that is linked to the existing offering. Consider a pivot in basketball – the player can turn and change direction, as long as he keeps one foot stationary.

Product pivots should not be wholesale remodels and reinventions. The NPD team, at this point, has learned what works and what features customers value. A pivot is designed to capture new value based on what customers need for continuous improvement. And the pivot is supported by lean thinking as features that are not meeting customer needs are discarded, thus reducing waste.

Accelerate

Business growth is imperative whether you are a startup, entrepreneur, or an established firm. Clayton Christensen’s seminal book on disruptive innovation, The Innovator’s Dilemma, demonstrates that incremental (or sustaining) innovations provide profit for a limited time period. New technologies, new markets, and new business models are constantly being created that will disrupt existing markets. Lean thinking demands that growth actions do not stall with sustaining innovations.

In Chapter 9 of The Lean Startup, Ries tells a story of stuffing and addressing envelopes. It is counterintuitive to learn that doing the task one-at-a-time is more productive than filling all the envelopes in one step, addressing them in the next step, and sealing and stamping in a final step. When we consider any probability of errors, mistakes, or defects, the small batch (one-at-a-time) operation is best to reduce waste. Companies can use small batches to ensure that new products are meeting customer demands; and if not, they are in a situation to make rapid changes.

When – and not if – growth begins to stall, entrepreneurs and NPD practitioners can borrow another quality tool: the 5 Whys. Drilling down to the root cause of a problem reduces the risk of repeated errors and can eliminate waste. The 5 Whys can also be used as a brainstorming tool to create ideas for next generation product categories when coupled with customer insights.

Lessons from Lean Startup

By definition, innovators must be flexible and adaptive to new information and new situations. Too often entrepreneurs and new product development practitioners are blinded by their faith and optimism in an idea. They create a marketing and production plan but are disappointed (emotionally and financially) when things don’t work out how they had hoped.

The lean startup methodology championed by Eric Ries focuses on an agile approach to new product development using a continuous feedback loop: build-measure-learn. This framework supports innovation best practices with frequent and deep customer interactions, eliminating “waste” or features that don’t add value, and continuous improvement. Innovation is most successful when we test our assumptions and make honest, data-driven assessments. The results of each experiment inform us and lead us to the next product design which we will proactively test with existing and potential customers.

To learn more about innovation processes, please check out our self-study and other NPDP Workshops. In particular, the Agile NPD course builds on the lean startup method and reducing waste in development. Feel free to contact me at info@simple-pdh.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!

 

Reading Recommendation

Some important references for lean innovation include two books by Eric Ries: The Lean Startup and The Startup Way. Also, every innovator, entrepreneur, and new product developer should own and read a copy of Clayton Christensen’s The Innovator’s Dilemma and the follow-up text, The Innovator’s Solution. I also like Being Agile by Ekas and Will, a book that gives tips to truly move from waterfall to agile methodologies in product development.

We also discuss different NPD methods in NPDP Certification Prep: A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

Principles of Integrated Product Development

Integrated Product Development (IPD) is a framework to help management and active project teams reach innovation goals. Originating in government systems, IPD is a management theory that promotes simultaneous integration of multi-disciplinary teams and concurrent engineering. By utilizing the life cycle concept of development and involving all team members early in the design phases, products are more customer-focused and achieve operability objectives with less rework and waste.

When new product development (NPD) processes are characterized in two dimensions – management philosophy and team structure – IPD is considered an integrated waterfall system. IPD processes, such as systems engineering, rely heavily on documentation and formal reviews. These gateways must be passed before a project can move to the next phase. Thus, IPD systems are typical examples of waterfall processes.

On the other hand, because IPD processes take advantage of cross-functional teams, they are characterized by integrated team structures. Team members from purchasing, maintenance, and other services participate in early design phases alongside the R&D, development, engineering, and marketing departments.

There are eleven principles supporting IPD.

#1 – Understand Customer Needs

As in any product or process development system that is successful, customer needs must be determined upfront. Most IPD processes, like systems engineering and project management, place emphasis on gathering complete customer requirements early in the development effort. Customer requirements include desired functionality and quality.

#2 – Plan and Manage the Product Development Effort

Planning any product development project should address overall, long-term strategic goals. IPD adds a focus to the specific business and innovation plans as well as longer range technology acquisition and development.

#3 – Use Integrated Teams

It should be apparent that in a rapid development environment that cross-functional teams better serve project efficiency. Manufacturing and maintenance participation during development of product specifications can smooth the transition to production and facilitate quality implementation. Empowered project teams will take ownership of the product goals, resulting in a more successful commercialization.

#4 – Integrated Process Design

As indicated, manufacturing, purchasing, and customer service personnel should be involved with product design. Excluding support disciplines when setting requirements and design specifications can reduce the product’s performance and result in costly delays. Worse yet, problems encountered post-launch are more difficult to resolve if the support staff is unfamiliar with the product. By integrating all disciplines in the design effort, product performance is optimized over its life cycle.

#5 – Manage Cost from the Beginning

An additional advantage of using integrated teams (principle #3) and integrated process design (principle #4) is that a product’s life cycle cost is more accurate. Target new product costs should be set early in the requirements phase and the project should be managed within this constraint. Early phase design changes are less expensive and effective planning can help to manage non-recurring development expenses.

#6 – Involve Stakeholders Early

Products are not commercialized without external project participants. IPD stresses that by involving vendors, suppliers, distributors, and other stakeholders early in the design process can reduce cost and development schedules. Understanding vendor limitations and capabilities enhances the team’s ability to predict cost and time-to-market.

#7 – Develop Robust Designs

One of the reasons an IPD system is successful in product development is that the process drives toward optimized and robust designs. Many tools are available for the teams, such as design of experiments, failure mode and effects analysis, and lessons learned reviews. Risk in product development is minimized by applying knowledge from past experiences and by tapping into the broad backgrounds of the cross-functional team members.

#8 – Integrated CAD/CAM Tools

Today much of product development and design can be done digitally. These tools, like computer-aided design (CAD) and computer-aided manufacture (CAM), should be utilized fully in cross-functional product development efforts. IPD systems emphasize modeling not only for the product but also for construction, manufacturing, engineering, and maintenance. Computer-aided design tools can streamline development processes.

#9 – Simulate the Product Performance and Manufacturing

Building on the use of computer-aided engineering tools (principle #8), IPD processes utilize simulation for quality control and performance validation. Checking for variations in digital mock-ups can save cost in construction and maintenance. Today, 3D printing models are relatively inexpensive to produce and can help to validate product and operational variables early in the design process as well as to garner customer feedback.

#10 – Create an Efficient Development Approach

One rule of project management teaches us that as the number of team members grows, the number of communication channels can nearly double. Efficient development teams should be limited to the required number of participants to make decisions. Policies, procedures, and paperwork ought to be minimized for the team to focus on the product development goals. Empowered teams (principle #3) can reach higher performance levels when unencumbered by bureaucracy.

#11 – Continuously Improve the Design Process

IPD systems encourage improvement by re-engineering the design process to eliminate activities that do not add value. Benchmarking other NPD processes and industry participants sets objective goals for life cycle development and time-to-market standards. Team members should be trained in innovation and these IPD principles to recognize waste and opportunities for improvement.

IPD Principles

The goal of IPD is to minimize later stage design changes, reduce project risks, and keep costs low. By incorporating these 11 principles into an IPD process, a company can realize the benefits of full life cycle design alongside the efficiency of multi-disciplinary teams.

To learn more about innovation processes, please check out self-study and other NPDP Workshops. Feel free to contact me at info@simple-pdh.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!

 

Reading Recommendation

One of my favorite new books on innovation is The Power of Little Ideas by David C. Robertson and Kent Lineback. Another good book focusing on customer perspectives is Strategy from the Outside In by George Day and Christine Moorman. We also discuss application of strategy via disruptive innovation in NPDP Certification Prep: A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC  

 

 

4 Types of Innovations

Most of us imagine innovation occurring by a lone genius, in his garage, creating the next great technological must-have invention. Yes, Hewlett and Packard, Jobs and Wozniak, and Zuckerberg and his classmates did indeed create billion-dollar businesses from primitive starts in garages and dorm rooms. However, most successful innovation follows business steps and processes rather than rags-to-riches stories. Most successful innovations require understanding markets, technologies, and customers.

While the fantasy of garage-created innovation inspires us, the real work of new product development (NPD) must identify acceptable opportunities that will result in customer satisfaction and grow the business. Innovation, then falls into four typical categories:

  • New offerings,
  • New markets,
  • New customers, or
  • New business models.

New Offerings

New product offerings are often a boon to product sales. These types of innovations create brand new products or product categories that involve new technologies or new customer experiences. Companies can build on these platforms for a long period of time to create derivative products and enhancements. A first-mover advantage further benefits the life cycle economics of a new offering.

Volvo recently introduced its 2019 entry into the compact SUV market (XC40). This vehicle is built on a new platform that Volvo will extend to a hybrid SUV, sedan, and even a convertible car. The new offering involves new technologies but is appealing to a growing customer base that may be currently dissatisfied with competitive products.

New Markets

Designing and developing a product for a new market can be hugely successful for companies. These innovations address currently underserved customers or introduce new technologies to solve previously intractable customer problems. Again, first-mover and fast-follower strategies build sales advantages for new market innovations. We can look to the health care industry for an example.

As the population ages, the demographic is creating (by default) new markets ripe for innovation. The elderly often have better health outcomes when cared for in their own homes. Yet, recovery from injuries or surgery may take longer with an elderly patient. Moreover, these people frequently experience loss of confidence in their ability to complete simple personal care and housekeeping takes, for fear of a repeat injury.

Home health care nurses and lay people are addressing this new market with a variety of services. In some instances, the new market is simple housekeeping while in others, the degree of care including administering medicines and assisting with bathing or dressing.

Companies can take advantage of new markets for innovations that are simple or complex, involve new technologies, or take advantage of existing capabilities.

New Customers

Another way in which businesses grow and develop successful innovations is by identifying new customers. Often a product or service is well-known in one market arena but unknown by customers who may have similar problems in another arena. Adding customers through innovation can both increase sales and decrease overall operating costs. Consumer packaged goods and the food and beverage industries use many different marketing tactics to build expanding customer bases.

For example, I used to drink only frozen orange juice. Honestly, this was a step up in my adult life from the powdered juice drink my mom served with breakfast while I was growing up. Years ago, the supermarket gave me a manufacturer’s coupon for non-concentrate orange juice. Since it was free, I tried it. And I much preferred fresh orange juice over frozen concentrate. A new customer (me) was created and I am a customer with significant repeat purchase behavior.

While it might feel like adding new customers is only a marketing ploy, new customers really do require innovation from a product development standpoint. Products need to be developed with enough variety and price points to appeal to larger, more diverse groups of customers. Likewise, packing may need to be altered to fit the needs of different customers – as an illustrative example, take a look at how many different brands, flavors, and mixtures of orange juice there are at the supermarket!

New Business Models

Finally, innovation also involves new business models (read more about business models here). Business models describe how a product or service reaches a customer as well as key processes, capabilities, and financial formulas for a company. Of course, new technologies often play an important role today in delivering products and services to customers to solve their problems.

An important example of a new business model is the subscription approach. Service providers offer a new smartphone every year if the customer subscribes to the cell service for an extended contract. Newspapers and magazines offer digital content via tiered subscription levels. Even arts and crafts manufacturers offer monthly kit club subscriptions to makers and creators.

Business models also can offer innovations in the profit formula for a firm by innovating around the supply chain, as Amazon was done, or by sharing manufacturing operations across platforms or competitors. Joint ventures offer an incentive for innovations to cross traditional boundaries yet yield advantages to both participants and end-users.

4 Types of Innovations

It is restrictive to view innovation as the proverbial light bulb moment that occurs to a lone genius. Occasionally, great ideas are born this way, but more often successful innovations are produced through collaboration and focused understanding of customers, markets, and technical capabilities.

Instead of hoping for lightning to strike, companies can cultivate NPD teams to recognize and groom innovations involving new product offerings, new markets, new customers, and new business models. These approaches need more user research and integration with manufacturing, sales, marketing, and supply chain. HR, IT, and training functions also must support new approaches to innovation, focusing on customer needs assessments, and growth of core competencies.

Innovation is fun and exciting, and tremendously rewarding when delivering a new product, service, or business model to customer and market needs.

To learn more about innovation and strategy, please check out self-study and other NPDP Workshops. Feel free to contact me at info@simple-pdh.com or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!

 

Reading Recommendation

One of my favorite new books on innovation is The Power of Little Ideas by David C. Robertson and Kent Lineback. Another good book focusing on customer perspectives is Strategy from the Outside In by George Day and Christine Moorman. We also discuss application of strategy via disruptive innovation in NPDP Certification Prep: A 24-Hour Study Guide, and you can find additional references at https://globalnpsolutions.com/services/npd-resources/.

 

Study. Learn. Earn. Simple.

© Simple-PDH.com

A division of Global NP Solutions, LLC