P63 Innovation Step-By-Step An Overall Success Plan Steps 3-6.

 

Listen to the podcast

  • This podcast provides proven, practical, and step-by-step elements from start to finish for an innovation program. A successful innovation program is a series of steps. Innovation programs need to meet certain criteria and objectives at the completion of a step before going onto the next step. Many people refer to this as the stage gate process, with the gate being the need to meet objectives before moving on.
  • Generally speaking there are about six steps. In some cases, some businesses will combine steps and others will split a single step into multiple steps. Some companies may also skip a step if they do not have the capabilities or need for a specific step – you need to recognize that, in most cases, this means that you take on more risk.
  • The six steps are: deep dive, vision and strategy, idea generation, concept learning, proof of concept, and introduction into the marketplace.
  • Having completed the deep dive step you already have a good understanding of the dynamics of your business – both a detailed and big picture view. You have used these insights to craft a vision of what success looks like for your innovation program. To that you have harnessed a strategy statement that clearly articulates how you will achieve the vision.
  • With that completed let’s get started with step three – idea generation for your innovation program.
  • Step three is idea generation. This is essentially conducting a quantum idea generating session to produce the ideas potentially capable of helping you achieve your vision and consistent with your strategy. During the course of the session, there will absolutely be vectors of idea generation that tend to wander from the vision and the strategy. All of this is fine. When I’m facilitating a session, getting to the finish line can be a zig zag path, but it’s ultimately my responsibility to help the group get to that finish line where we deliver the needed ideas.
  • Podcast episodes P1 through P6 provide you with a great introduction into the quantum idea generating process.
  • The previous work on the deep dive and vision/strategy provides some very valuable material and insights into the best way of constructing and executing your particular quantum idea generating session.
    • Regarding stimulus, all of the previous work leading up to the session is a potential source of great and relevant stimulus. You probably want to start the session sharing the vision and strategy and how this was arrived at. In doing this, you want to backup to the deep dive and in various places during the session consider sharing the 5-10 major dynamics and insights. The scheduling and sequencing of these really depends upon the roadmap you construct for a session lasting anywhere from one day up to four days. Having said that, the stimulus is really foundational stimulus to get everybody on the same page – at least for a moment. There will need to be many other forms of stimulus that follow these examples. Go back and review the podcast on stimulus to deepen your understanding of this path.
    • Regarding diversity, your previous work will reveal where you really need more expertise than is available within the company. As mentioned in the diversity podcast, this can be people with highly specialized expertise in the direction you are exploring and/or it can be people with a very big picture view of cultural megatrends, for example. Any time your vision calls for an outcome that is dramatically better than some/most/all of competitive products, you absolutely need the right external expertise working in combination with your best internal experts to get the needed results.
  • Let’s move on to the fourth step – concept learning. Coming out of the quantum idea generating session, the group identified the ideas they think have the highest potential – in most cases this is about ten – forty ideas.
    • Following the session you want to take this group of ideas and make some further groupings of similar or related ideas and give further consideration to the relative potentials of all the ideas you have. You want to be very careful not to make too many hard and fast decisions that would cut a significant number of ideas coming out of the session.
    • You can give consideration to conducting some qualitative learning. For example, focus groups can be conducted to share your rough draft concept statements for most or all of the ideas. You can supplement the statements with visuals as appropriate. You are not using the focus groups to make decisions about which ideas have the highest potential. Rather you’re looking for how clearly people understand the concepts from what you’ve written, especially your communication about the products’ benefits and how they meet customer needs.
    • You then want to consider moving to quantitative research. This can be research with a fairly limited scope of just evaluating the concept on a series of proven and reasonably predictive criteria. You can also go an additional step of getting concept evaluation in combination with additional feedback. For example, Merwyn technology provides diagnostics on the strength of your benefit, reason to believe, and dramatic difference. It also provides a year one sales estimate based on criteria you specify.
    • In evaluating these results, you want to establish ahead of time the criteria ideas need to meet before they can move onto the next step. This can be a certain concept score or year one sales estimate – they can also be other criteria that are right for your type of business. Nonetheless, at the end of the concept learning step, you want to be making decisions. These are not necessarily irrevocable decisions since an idea that gets put on hold now may come forward later when there are new learnings or developments.
  • Next we move to the fifth step – proof of concept.
    • In this step we take the few ideas coming out of the previous step – typically one – three ideas – and take them to a deeper learning stage.
    • Most often this involves developing various forms of product prototypes. If it’s a beverage, the R&D organization works on a variety of formulations. If it is a new tool for a specific industry, the first step might be developing illustrations, followed by a looks like prototype that is not fully functional, to finally developing a fully functional prototype.
    • As prototypes are developed, they are shared with potential customer groups, usually on a small, qualitative scale. You’re looking for quick feedback on what’s working and what’s not working. This quick feedback turns into rapid prototyping followed by additional feedback from potential customer groups.
    • At the point that you have one or two product prototypes that have received generally positive feedback, you want to move into an actual product use research step. In consumer products, this is often referred to as in-home product testing in either monadic or paired comparison versus a major competitor testing. With B2B products this can be giving some of your lead users and biggest users of the product a prototype so you can learn in their actual environment working on actual products of theirs.
    • This can often require more than one round of this kind of testing. But there is a developing and learning cycle that you use that’s right for your type of business. At the end of the stage, there again needs to be a decision-making methodology, usually including reliable quantitative research. The product needs to achieve a certain score and/or a minimum year one sales potential to be considered as a candidate for production and introduction into the marketplace.
    • As a part of this decision-making process, there usually is an early on feasibility study involving all parts of the company that would be involved in manufacturing and distributing the product. You want to determine such things as potential manufacturing costs, raw material sources, and economics. Regarding economics, you want to develop preliminary cost and selling price models that are then combined with the year one sales estimates from separate research to determine the financial attractiveness of the idea.
    • I have covered this very quickly and only from an overview perspective. There are many unique variations with specifics that are right for your type of product and business. Having said that, the overall thinking flow here is appropriate in most situations.
  • When a product has met all of the criteria that each of the steps and is ready to move on to the next step, the last step is to move into the marketplace in some way. There are a variety of ways of moving into the marketplace and I will mention a few to illustrate some major options.
    • Prior to moving into the marketplace there needs to be a major team effort to manufacture and distribute the new product. This typically requires multifunctional teams, capital expenditures, and a variety of new processes that can increase the risk of the project.
    • When the product is ready to move in the marketplace here are some of the major options about how that can proceed.
      • You can make a full national introduction. You go into all your markets at the same time.
      • On the other end of the spectrum, you can go into some markets as a test market. Often the primary purpose of a test market is to test volume and price assumptions and the effectiveness of your marketing plan. Again, there are criteria that need to be achieved for the product to expand beyond the test market.
      • You can move the product into carefully chosen markets, maybe with particular types of customers that can be especially supportive and helpful. This can be part of an overall phased rollout program. This can help reduce risk by learning and incorporating changes phase. Most often these are going to be improvements to the marketing program instead of the product itself.
    • These three podcasts have covered the step-by-step innovation process from an overview perspective. As noted several times, there can be significant modifications to the steps outlined here based on the type of business and capabilities an enterprise has.
    • My hope is that you get a general understanding of the steps you need to go through that tend to optimize the product, gather critical learning, and manage risk when done properly.

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