"If I had asked my customers what they wanted, they would have said a faster horse." - Henry Ford
Henry Ford hit upon one truism of product development, that disruptive innovation often involves thinking of things no one has thought of before. However, despite Ford's snarky observation to the contrary, organizations ignore customer desires and ideas at their own peril.
A recent survey of 280 product executives confirms that new product launches are a 50/50 proposition. The study, conducted among members of the Association of International Product Marketing and Management (AIPMM) and sponsored by Accept Corp., finds half acknowledging that 50 percent or less of their organization’s product launches over the last three years were successful in terms of attained profit, revenue, or market share goals.
Is this something to be concerned about?
It can be argued that employees and innovators be allowed to experiment and fail; that's the sign of a great company. For companies investing a lot of money in innovation and development, however, there needs to be greater assurance of return on investment. Too many misfires will inhibit the innovative spirit.
To that end, the study's authors cite four major causes of product innovation misfires:
1. Failing to incorporate the 'voice of the customer' into the process: This seems like an obvious requirement, but many companies seem tone-deaf to the customer's voice in the product design stage. One way to better capture customer input is by social media channels -- but at this point, only 25% are using Web-based methods for idea capture and engaging key stakeholders. In fact, customer feedback is collected by 75% of companies "in an archaic fashion such as at trade shows where business card are exchanged, and little if any organized follow-up ensues."
2. Failing to align product execution with company strategy. This may sound like consulting gobbledygook, but it all boils down to how well managers are communicating with innovation teams. Often, there's very poor efforts at communication. "Less than 50% of engineering resources are focused on the most pressing management priorities, according to 46% of executives. This statistic illustrates that there’s a high probability that companies are spending valuable resources developing the wrong products and features."
3. Failing to automate innovation processes. Time to market is everything, and things need to be turned around quickly. But paper-based and manual processes are only going to keep things on a slow track. "An increasing number of companies are beginning to recognize that by automating time-intensive and costly MS Excel and Word-based processes, they can increase their time to market and accelerate profitability. They are applying technology-based solutions to ideation, strategy and portfolio requirements management and development processes and enjoying the shorter innovation cycle times, reduced development costs and faster time to market that such solutions can deliver." Emerging ideation solutions can better systemize the innovation lifecycle, just as project management software has systemized project lifecycles.
4. Failing to mitigate planning and execution risk. "Mitigating planning and execution risk cited as the # 1 challenge in most companies. Specific risk areas mentioned include the inability to plan resources to match timing and constraints leading to missed market opportunities due to missing launch deadlines and the inability to manage product and execution dependencies across multiple teams and regions."
The study's authors offer these words of advice for improving the odds of product success:
- Strive for a better balance between product strategy and "the budget or resources available and assess for profitability, resources, risks, and other appropriate factors."
- Start connecting with stakeholders by facilitating collaboration among customers to generate better and more innovative ideas in a 24/7 idea community.Re-prioritize your innovation initiatives and determine roadmap for 2011 – invest in a product portfolio solution that will enable real-time market modeling and ‘What-If’ capabilities to rapidly and visually prioritize development against company goals and product strategies.
- Harness the wisdom of the crowds - Let customers decide what is most important by prioritizing ideas through a Web-based system to easily screen, rate and distill the most important ideas to focus on.
- Automate the entire innovation process - eliminate manual processes as much as possible. Consider automating the entire innovation process end to end: Ideation, Strategy and Product Portfolio Management, Requirements Management and Execution.
- Ensure you are always working on the most important thing.
- Integrate Innovation into your ecosystem – Integrate your innovation processes within other systems and third party applications that will enable the capture, prioritization, collaboration and execution on winning products like never before.