information need for paperWhy Is This ImportantProduc.docx
2016 FEI Article_Make Ideas a Reality
1. maddockdouglas.com
Make Ideas a Reality
®®
Maddock Douglas • Helping you anticipate, navigate and overcome the challenges of innovation.
Bring a Concept to Market
By Lauren Schwartz, Innovation Strategy Manager
The practice of innovation has changed
In a world where the pace of technology is accelerating faster than ever, few executives
deny the importance of innovation to their organization’s success. Gone are the days
when innovation was easily dismissed as a fad, seeming to be more about fun than work
and justified only with discretionary income. Over the past decade, corporate behemoths
such as Apple, Google and Amazon have proved these assumptions wrong. We now know
that innovation can and should be practiced as a core competency, since it is as much
about scarcity, focus and accountability as any other core business function. Also, instead
of being viewed as a discretionary expense, innovation is now viewed as a critical driver
of growth, making it an obvious investment for companies struggling to compete. In fact,
Accenture’s recent 2015 Innovation Survey reports that 74 percent of U.S. executives have
formal innovation processes, 63 percent are appointing Chief Innovation Officers, and
90 percent use emerging technologies to improve their products and services.
However, despite these valiant efforts, most executives struggle to implement innovation
programs that work. According to Accenture, 72 percent of executives expressed concern
over missed innovation opportunities, 60 percent admit that their companies don’t learn
from past mistakes, and 67 percent believe their organizations are risk adverse. This did
not come as a surprise, since one of the most common challenges we hear from our
clients is that, despite sizable investments in innovation-related initiatives, they struggle
to bring profitable innovations to market on a repeatable basis. In fact, we make this
diagnosis so often at Maddock Douglas that we’ve even developed a name for it:
Failure-to-launch Syndrome.
How to diagnose Failure-to-launch Syndrome
But in order to diagnose Failure-to-launch Syndrome, at least one of two symptoms must
be present. The first is a track record of failed market launches, characterized by continual
sprints to be first to market, only to learn upon arrival that consumers don’t want the now
fully developed product or service. Conversely, a history of no new product or service
launches is just as telling as a history of failed ones. This second symptom is characterized
more by risk aversion and decision paralysis than by a drive to be first to market, ultimately
resulting in good ideas getting trapped indefinitely within product development limbo.
2. Make Ideas a Reality
However, full recovery from a problem requires addressing its root cause rather than just
its symptoms. Yet, clients routinely mistake the symptoms of Failure-to-launch Syndrome
as its source, erroneously concluding that the issue is their organization’s speed to market.
Therefore, to start our treatment, we must start by helping clients reframe the root cause,
which has far more to do with speed to learning than it does with speed to market. In
fact, developing ideas faster or slower makes little difference if you’re using the wrong
innovation activities in the first place. And knowing which innovation activities to use
depends on knowing which types of learning you’ll need to reach market successfully.
Traveling the road to recovery
Consequently, whether your organization has rushed to launch an idea consumers don’t
want or, alternatively, killed an idea when unsure what consumers do want, the solution
is to test all idea-related assumptions with consumers as early and often as possible,
ensuring that every feature of an idea’s design is informed by consumer research. One
great tool for this is the Lean Canvas, created by entrepreneur Ash Maurya to help
designers frame their research more strategically. We recommend that clients use the
Lean Canvas to determine how confident their teams are in answering critical questions
related to an idea, ultimately exposing areas where further consumer research will be
required to reach adoption. For example: How much do you know about the attitudes,
behaviors, needs and desires of who will purchase your idea? What is the unique value
proposition that this segment would like you to deliver? What do they perceive as your
unfair advantage? What is their experience with the key problems your idea is meant to
solve, and how do they feel about the key features that address these problems? How
much are they willing to pay, and through what channels do they want to be reached?
Once alignment is reached on which questions require more research to address, the next
step is to determine which innovation activities can clarify the answers. In our experience,
this is the hardest part about bringing an idea to market, since there are many complexities
to discerning which innovation activities should be applied and when. It’s also worth noting
that this assumes you know which ideas are worth bringing to market in the first place
(a topic that I’ll save for another paper).
3. Make Ideas a Reality
A portfolio-based approach to
managing innovation
To better navigate this complexity, we encourage our clients to categorize ideas using the
four-quadrant innovation portfolio shown in Figure 1 below. By mapping an idea to one of
the portfolio’s four quadrants, clients can use the quadrant to inform which innovation
activities will be required to develop it. An idea is assigned to a quadrant based on how
certain the client is regarding the idea’s market maturity and how easy it will be for the
client to bring the idea to market with their current capabilities. For example, if the idea
meets a very clear consumer need that the organization is highly capable of addressing,
the types of learning and activities required are evolutionary in nature. However, if your
idea targets an unclear consumer need that would require new organizational capabilities
to address, then the types of learning and activities required are revolutionary in nature.
What clients begin to realize through this approach is that there are actually four different
types of innovation, each represented by a different quadrant, and each requiring very
different types of activities, funding strategies, management practices and performance
metrics to reach market successfully.
Market
Maturity
Certainty
Market
Maturity
Uncertainty
Business
Certainty
Business
Uncertainty
Evolutionary
Differentiation Revolutionary
Fast Fail
Market
Maturity
Certainty
Market
Maturity
Uncertainty
Business
Certainty
Business
Uncertainty
Evolutionary
60%
Uncertainty
Differentiation
20%
Revolutionary
5%
Fast Fail
15%
Figure 1: The Maddock Douglas Innovation Portfolio
Surprisingly, the majority of executives still manage these very different types of
innovation using an identical process. According to the Accenture survey, 82 percent of
executives do not distinguish between how they innovate and how they go about achieving
incremental performance gains, demonstrating just how sizable the need for a portfolio
approach to innovation really is. With so many companies failing to treat the different
types of innovation as separate, those who do stand to gain a sizable edge over their
competition. However, the time to take action is now.
