Whether you are starting out, or growing an existing business, all business owners and leaders need to invest in creating, growing and renewing the value that they provide to their customers through their products.
Now that might seem obvious for “start ups”, or businesses that have fallen on hard times, but not so for well known market leaders. But consider this: if you are reading this on a household brand smartphone you will know that we are living in an age where many great products are becoming technologically obsolete, or competitors are imitating at a cheaper price, or with additional features, within three or fewer years. So even the best businesses will probably need to renew their current product sales revenue by around 33% every year, just to maintain current order levels and (hopefully) market share.
Some business leaders then say: “my market leading business already produces “the industry standard”, and it isn’t possible for a competitor to improve on that. So we’re not worried.” We remind them of the disruption that comes through innovative substitution; for example, most users of landlines in the 1990s were reasonably happy with their features… but as soon as mobile phones became cheaper and smarter, landline telephone hardware and service contract sales started dying.
So the “renew or fade away” imperative requires your business to develop and follow a clear Product Innovation Strategy guiding your Product Innovation Plans. Having accepted that, your first practical challenges are: “where do I start, and how much time and money should I invest in these pursuits ?” As mentioned in my previous post in this series, your market research is your starting point - it will help you to narrow down your innovation options to those which resonate best with real customers. You can then apply “cost vs benefit” tests to determine which feasible product innovation options might deliver the best commercial returns within your various constraints - and then you can carry out product trials, to validate your thinking without incurring excessive time and cost risks.
Its now time to roll out your MVP - your “Minimum Viable Product”, not your most valuable player, although it might just be that in your innovation toolkit. This is a product version with just enough features to satisfy early customers and provide feedback for future product development, where you refine your MVP into something that might become a fully developed, regular offering to customers.
Here are some other important things to consider before you race off to your innovation lab:
1. Product Innovation Project Plan
This is more than just how you will design, launch and test a new or improved product - your plan should also map out how you will standardise and then further improve your products over say a 12 to 24 month period of time. Follow sound project management methodologies and monitor costs with a mini profit and loss worksheet. Identify and manage IP and other risks and decide how you will fund and account for development and marketing costs.
2. “Go to Market” Strategy & Plan
All product trials should integrate the work of your Sales, Marketing, Operations and Finance functions. You may need to rethink your sales channels, sales training, production processes and key supplier relationships.
3. Customer Feedback Loops
Before launching your MVP, determine:
- Where on the customer journey are the “moments of truth” where you require good or bad feedback ?
- What data and insights will you need to acquire and monitor
- How will you gather and maintain quality control over feedback, eg through standardised surveys, purchased test results or focus groups ?
- How will you evaluate, prioritise and execute follow up actions ?
4. Cyclical Reviews
Establish clear project milestones where you and your team look at the MVP test data together. Sometimes, you might actually need to stop, which is confronting when your gut tells you the product is good, but the customers are telling you its a product that's just not right or perhaps too early, or not aimed at the right market. Its also critical that your team is empowered to speak up if they disagree with the direction of a product innovation trial. And if you do suspend or cancel a project, see what you can salvage for your next project, where that great idea might find its correct time and application.
Start Small, and Keep it Sustainable
Here is a great case study from All Birds:
Tim Brown, the co-founder of All Birds, saw the need for a sustainable shoe product. Instead of trying to roll out several different types of shoes for different needs, they decided to stick with just their Wool Runner product ahead of officially launching Allbirds to the public.
“Sometimes, the assumption with innovation is it’s about adding lots of things — bells and whistles,” Brown says. “And, in the case of what we were asked often in the early days — ‘Why does the world need another shoe?’ — sometimes innovation can be about taking things away. It can be whispering when everyone else is screaming.”
And one final note of advice: don't overcommit your own time and focus. As the business owner or leader you will need to stay close to your Product Innovation Strategy and projects, but you also need to keep your existing business running well and profitably. Schedule, delegate and empower where you can - after all, you need to look after your own health and work life balance, even when you are busy changing the world, one great product at a time.