One of the most subtle and recurrent traps that organizations fall into repeatedly when launching new innovation is an over commitment of resources to those things they know how to do, as well as an under commitment to those areas that are truly new to the firm. The dismal 25% success rate we talked about in the third post of this series can be largely attributed to management pulling the plug when the resource “burn rate” exceeds perceived value.
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One of the hard-won lessons a mentor shared with me as I was assuming responsibility for a product design, is that the hard problems remain the hard problems. What he meant by this, is that even on product extension programs, when a product and service is first tested, an issues list is drawn up with A’s, B’s and C’s. Problems that are in the wheelhouse of a firm are picked off in a predictable way, but every product or service has that one stubborn issue that needs to be dealt with. Yet many, many groups live in a zone of denial, where they assume that somehow a solution will be found in the last moment and all will be well.
When implementing something new to your organization (which you are already doing if following my recommendation for higher risk/reward innovation programs), this problem is much more subtle and potentially deadly to your success. The reason it’s so subtle, is that it takes a great deal of discipline to do the work to find those pieces of the new product or service that have embedded risk when you are doing things that the tests and filters in your firm are not used to evaluating.
The system you use for product extensions, with its emphasis on stage gates and launch plans, is usually ineffective for surfacing issues in new offerings.
The savvy innovation leader takes his team through a macroscopic FMEA for the new offering, which includes all aspects of the business model. Early in the process, this will highlight the areas of highest risk and allow resources to be applied to de-risking those areas prior to a full-scale ramp of project resources. Ranking these issues by impact is where the focus belongs, even though it is easy for the organization to fall in love with the promise of the new offering. By making these areas of risk, the “main events” that the team is working on keeps the attention focused on removing roadblocks, not scaling prematurely.
Starting at the macro level with guided work on the business model canvas, followed up with good analytics, is key to surfacing the deep innovation tasks needed to make the new project come alive in your firm.
The key here is to make it good before you make it big
- Early in a program, the leader needs to be “de-risker” in chief, and keep the focus on the weakest aspects of the new product or service. This will keep the spending on the program in check and allow the deeper issues to take the spotlight.
- It is very important for ego and career preservation to build this phase into your programs. It is one thing to sign on leaders to meet the objective come hell or high water, but this can lead to emotion filled, rather than fact-based, schedules and budget commitments. In short, keep promising careers promising and allow them to be brilliant by exposing and solving risk.
- One of the main ways those really sticky issues get solved is getting outside the known boundaries of your firm and industry and borrowing from across typical boundaries; this is where deep and lasting advantage can be built. One of the early patents I collaborated on was using a simple flat, torsion spring in a filter cavity of a high-power transmitter.
- Technical staff rewards and recognitions are usually built around making contributions to programs with the largest business impact. By tilting this towards breakthroughs that allow innovation to progress, you can get your best talent thinking about these “gateway issues.”
An interesting observation on the above is that you will eventually have to apportion the resources to solve the issue, and when this happens late in the program, it will be much more costly in cash, human capital and time to market. Having an experienced set of outside eyes to provide insight through a different lens can shortcut this learning curve significantly.
I reserve time in my schedule to come alongside innovation teams and help them drill into these issues. If you’d like to have a 20-minute discussion to explore this, please email us and we’ll work out a time for discussion.
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