Fred and I met at a Product Management conference. At the time, he was the Senior Vice President of Innovation at Experian. Fred is now moving on to other exciting innovation and Product Management projects but before he gets busy and right back into solving market problems, I nabbed him for a quick interview.
An Accidental Discovery
Although Fred always had an interest in technology, he studied medicine. Of course, clinical medicine is all about working with customers to understand and meet their needs. Patterns in these needs lead you to products that are combined and customized for a particular customer. This is Product Management, but Fred didn’t know this at the time. While working in medical research, Fred saw a gap in how information and data was shared and soon realized the need for a research network. This is how he found computer programming as a hobby. Over time his interest in programming grew and after successfully creating a medical research network he was keen to develop other programs. The challenge was, however, finding something useful to build that is worthwhile to users and customers. He worked on an open-source mailing list manager (ezmlm-idx) writing code, documentation, packaging, and supporting the package via a mailing list. He soon found suggestions, needs, bug-fixes, questions coming in from people who actually used the programs. Delightful and exciting! Here was market research, product strategy, customer support, and much more, yet he thought he was only programming.
Based on this work, Fred was offered a job as CTO at a New York City internet startup (CheetahMail). It was a chance for him to turn this hobby into a full-time job and:
- Work with a group of smart people towards a shared goal
- Work with customers to understand their business and their needs
- To see patterns and directions in those needs
- To learn what the market did and didn’t value
- To design products that use these insights to profitably meet the market needs
This is where he was formally introduced to Product Management by John Hindman. It suddenly became clear that the fun part wasn’t just about helping people with their problems, coding, and engineering, but it was Product Strategy, Product Marketing, and Technical Product Management.
Product Management and Innovation
An opportunity was recently presented to Fred to design a corporate structure and process for innovation at the enterprise level. This was a new corporate way of thinking and fresh new ground for offering disruptive innovation at the company. I asked Fred to tell me more about his thoughts and strategy for achieving such an important project.
Fred believes disruptive innovation requires process and people different from the more sustaining management of existing products. Whether or not this fits within or next to Product Management for existing products depends on the organization. Traditional Product Management is about growing products and meeting customer expectations in knowable markets. Disruptive innovation is the management of new ideas and the prioritization of unknowns, with the goal to inexpensively as possible separate out and evolve the ideas that in the end will be financially successful. In many companies there already are efficient processes in place for Product Management. There are established working value chains in the business for existing products. Disruptive innovation should have it’s own separate, repeatable process for new product and service development.
An innovation division would consist of a team of people who would collate ideas, facilitate ideation, develop criterion for funding, encourage prototyping and experimentation, and manage potential directions for a portfolio that manages risk. They would facilitate ideation but not act as a think tank for new products. Their purpose is to find unmet needs by collaborating with staff, customers, partners, outsiders, and then develop and support the launch of good ideas into their own sustainable businesses.
The innovation division itself should also run like its own business, being accountable for getting ideas tested, prototyped, and eventually generating revenue from the launch of good ideas. Although the credit for the innovation belongs to the inventors and launch teams, the innovation division plays a significant role in initiating and managing the innovation process.
Finally, the innovation team would ideally have these competencies: market research, knowledge management, sales and marketing, and technical capability.
- Market research to find unmet needs consistent with the company’s long-term vision. This is where ideation will be focused. Collaborates with main market research function, but has new markets as its goal.
- Knowledge management to organize the growing amount of information and extract insights. Collaborates with marketing and also helps drive thought-leadership.
- Sales and marketing for connections inside and outside the company, understanding of value chains, compensation, sell-ability.
- Technical capability to understand what can be done and how as well as connect with and/or lead technology prototyping resources.
You can see that this is a small highly networked mini-company optimized to produce a particular product: new businesses that meet new needs. For most companies that start an innovation division, it’s unlikely there will be a dedicated innovation team. It’s usual that staff will be holding an additional role to their regular full-time positions until a self-sustainable innovation division is established. However, for better results and accountability, Fred suggests companies commit to selecting a few full-time staff to focus on innovation instead of dividing the work part-time between a greater number of staff.
Key Points for Implementing Innovation at Your Company
I asked Fred whether he had any advice on how to establish an innovation culture at a company. He described that innovation should be:
- A part of the corporate strategy and vision. Disruptive innovation takes time. Your company needs to have a clear vision and strategy for at least as long as it takes for your innovations to be financial successes.
- Be outward, customer-facing, networking, listening
- Focused around clearly defined market and business problem areas
- Communicated to the company at large
- A commitment. Participation must be career-promoting, even where ideas are abandoned early because of assumptions not met. Showing early that something won’t work is a success!
Companies serious about innovation need to include it in their long-term corporate strategy and vision. Their strategy and vision should also be expressed in customer value generation terms (i.e. what is your company going to be for your customers) and then communicated to the entire company to excite, inspire and to gain the support of staff. For example, Google’s corporate strategy is “organizing the world’s information and make it universally accessible and useful”. From this strategy you can define problem areas around the organization of information and develop ideas for solutions.
Furthermore, the biggest impediment for a corporation when adopting a culture of innovation is the fear of taking risks. Most leaders run a successful business unit so when there is a hint of potential failure anxiety rises. Companies need to reward or recognize people for having good ideas that may or may not work; they need to celebrate the fact that ideas may not be launched. The goal for innovation is not to make an idea successful but to find out as fast and cheaply as possible whether an idea will ultimately be successful. For corporations this can be a tremendous shift in corporate culture and business thinking.
What are some trends in innovation?
Innovation is impacted with consumer empowerment through social media and community networks. Collaboration, ideas development, and customer feedback is easier and more accessible to companies more than ever.
There are now organizations, such as InnoCentive and NineSigma that connect you with subject-matter experts so you can post your problems and ideas and receive solutions. There are other organizations like Cambridge Consultants that will solve specific product and technical problems for you.
More and more software designed for innovation is readily available for corporations to use. For example, ideation software is great to get staff involved in submitting and developing ideas. If you’re planning to use ideation software, a tip is to use the software for non-product related items as well so staff can post ideas about other aspects of work that they may be more interested in, such as the work environment, parking stalls, etc. Use software that allows interaction like comments and voting. This generates interest, improves ideas, and decreases the initial filtering work. Focus around strategic areas and needs. Be transparent. Reward ideas and participation. Remember, the biggest reward is not money but success and making a difference for the customer, the company, and the team!
Innovation, like any other process, needs to be managed and well structured but it’s clear from the interview that it won’t happen overnight. It takes long-term planning and commitment for an innovation culture to be established in any corporation. Fred, thanks so much for your time and insight into innovation management.
We encourage you to ask questions or submit comments on how innovation takes place at your company. You can reach Fred by posting your comments here, or if you would like to get in touch with Fred directly, please email email@example.com. We’ll be happy to pass on any messages.